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IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
HALL, J.
TUESDAY 12 DECEMBER 2006
No. 30048 of 2006
No. 30050 of 2006
No. 30052 of 2006
No. 30088 of 2006
DAVID DARLEY DOWE v. COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR
ROBERT PAVAN v. COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR
GILBERT GEDEON v. COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR
JOE ZAITER & ANOR v. COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR
JUDGMENT
1 HIS HONOUR: The plaintiffs commenced proceedings in this Court by way of summonses filed on 11 April 2006 in which they sought to set aside or have declared void decisions of the Commissioner of the New South Wales Crime Commission (the first defendant) and seeking orders in the nature of certiorari quashing six authorities purportedly granted by the first defendant on various dates in February and March 2005 pursuant to the provisions of the Law Enforcement (Controlled Operations) Act 1997 (NSW) (the State Act).
2 Subsequently, amended summonses were filed on 19 July 2006 (Dowe), on 14 July 2006 (Pavan), on 17 July 2006 (Gedeon) and on 24 July 2006 (Zaiter). In the amended summonses the plaintiffs, inter alia, claimed a declaration in the following terms:-
“1. A declaration that Parts 2 and 3 of the Law Enforcement (Controlled Operation) Act 1997 (NSW) (‘the LECO Act’) or alternatively sections 6, 13 and 16 of the LECO Act is ultra vires or invalid as being inconsistent with laws of the Commonwealth within the meaning of section 109 of the Commonwealth Constitution to the extent that the said provisions purport to authorise and/or make certain conduct ‘not unlawful’ and not ‘an offence’ which conduct would otherwise be in breach of Commonwealth laws or would constitute serious criminal offences under Commonwealth law.”
3 The four amended summonses are in identical terms, apart from references to the individual authorities in respect of controlled operations relevant to each proceedings.
4 On 21 July 2006, notices pursuant to s.78B of the Judiciary Act 1903 (Cth) were served on behalf of the plaintiffs on the Attorneys-General for the Commonwealth, States and Territories in relation to the second defendant’s notice of motion dated 22 August 2006 seeking expedition of what was referred to as the “constitutional question” and the “jurisdictional question” raised in the proceedings on the summonses filed in this Court.
5 Copies of the six authorities were included in Exhibit B (documents numbered 8, 16, 24, 31, 39 and 47). Each Authority to Conduct a Controlled Operation is an authority purportedly granted by the first defendant as Commissioner and Chief Executive Officer of the New South Wales Crime Commission (referred to in this judgment as the “Crime Commission”). Each bore an operation number and an operation name and set out in paragraphs 1 to 5 the relevant matters required to be considered in terms of Part 2 of the State Act. The nature of the controlled activities are identified in the next paragraph. In general terms, the authorities purported to authorise “Tom” and named law enforcement officers to possess quantities of the said cocaine, to supply quantities of the cocaine to various people (alleged to have included the plaintiffs) and to deal with the money paid in exchange for the cocaine supplied. In reliance on the authorities, cocaine was alleged to have been supplied to the plaintiffs and money received in exchange for the cocaine supplied.
6 A question has been raised in the present proceedings as to whether the State Act is invalid on the basis that it is said to be inconsistent with certain provisions of the Customs Act 1901 (Cth), of the Criminal Code Act 1995 (Cth) and the provisions of Part 1AB of the Crimes Act 1914 (Cth) (Commonwealth controlled operations provisions) and by reason of the impact of s.109 of the Commonwealth Constitution.
7 The plaintiffs contended that:-
(a) the provisions of the State Act (which was assented to on 17 December 1997 and operative from 1 March 1998) are directly inconsistent with such laws of the Commonwealth.
(b) The provisions of the State Act “alter, impair or detract from” or “qualify, impair, undermine or negate” the operation of the above Commonwealth laws within the meaning of the tests enunciated by the High Court in the relevant cases.
(c) That the “controlled operations” provisions of Part 1AB of the Crimes Act 1914 (Cth) cover the field and that the State Act is, to that extent, inconsistent with the said provisions of the Commonwealth Act (Part 1AB was inserted into the Crimes Act 1914 (Cth) by Act No. 28 of 1996 and commenced on 8 July 1996).
8 The plaintiffs in the alternative, also submitted that the New South Wales Parliament does not have legislative power to make laws in respect of controlled operations that purport to make lawful that which would otherwise constitute a Commonwealth offence in the absence of a corresponding Commonwealth law that expressly permits it.
9 Mr. J. Stratton, SC., with Mr. M.A. Robinson of counsel appeared on behalf of the plaintiff, David Darley Dowe. Mr. Robinson of counsel also appeared on behalf of the plaintiffs, Robert Pavan and Joe Zaiter and with Mr. A. Djemal of counsel for the plaintiff, Gilbert Gedeon.
10 Mr. I. Temby, QC., with Mr. P. Singleton of counsel appeared on behalf of the New South Wales Crime Commission and its Commissioner, Mr. Phillip Bradley, whilst Dr. J. Renwick of counsel with Mr. C. Lenehan of counsel appeared on behalf of the Attorney General for New South Wales, intervening pursuant to s.78A of the Judiciary Act 1903 (Cth) in the proceedings.
11 On 22 August 2006, the second defendant filed a notice of motion for the separate determination of two questions. On 18 September 2006, I made orders the following questions be determined separately from the rest of the proceedings:-
(a) Are ss.5 to 20 of the Law Enforcement (Controlled Operations) Act 1997, or any of those sections, alone or in combination, ultra vires or invalid by reason of s.109 of the Commonwealth Constitution? (the “constitutional question”).
(b) Does the jurisdiction of this Court extend to determining whether or not any conduct proposed to be authorised (or that was authorised) pursuant to s.6(1)(a) of the Law Enforcement (Controlled Operations) Act 1997 is (or was) likely to seriously endanger the health or safety of any participant or any other person, or to result in serious loss or damage to property, within the meaning of s.7(1)(b) of that Act? (the “jurisdictional fact question”).
12 An order was made that the hearing of the above questions be expedited.
13 On 25 October 2006, an order was made for the solicitors for the plaintiff to file and serve notices under s.78B of the Judiciary Act 1903 (Cth). On 6 October 2006, the Crown Solicitor wrote to the Registrar of the Court advising that the Attorney General for New South Wales had instructed the Crown solicitor to intervene in the proceedings. On 25 October 2006, the solicitors for the plaintiff were directed to file and serve by 4.00 pm on Tuesday 24 October 2006 any amended notices under s.78B of the Judiciary Act. Such notices were provided by notices and covering letters dated 26 October 2006.
14 Pursuant to directions made on 19 September and 25 October 2006, extensive written submissions were filed on behalf of the parties. These submissions are identified and particularised in the schedule to this judgment.
15 On 21 November 2006, I granted leave to the second defendant to file a notice of motion seeking the separate determination from the rest of the proceedings of two further questions as follows:-
“(a) Is the report of Louisa Degenhardt (undated), being part of Annexure C to the affidavit of Stephen Dack sworn 18 August 2006, relevant to, and admissible in, the proceedings upon the Summons?
(b) Is the report of Louisa Degenhardt (dated 31 July 2006), being part of Annexure AC to the affidavit of Stephen Dack sworn 18 August 2006, relevant to and admissible in, the proceedings upon the Summons?”
16 An order was made on 21 November 2006 that these additional questions be separately determined together with the questions set out in paragraph [11].
17 The hearing of the separate questions proceeded on 2 and 21 November 2006.
18 In support of the orders sought, the plaintiffs relied upon two principal grounds.
19 The first ground asserted that the authorities impermissibly purported to authorise or make lawful conduct which would otherwise constitute serious criminal offences under Commonwealth law or was in breach of that Commonwealth law. Consequentially, Parts 2 and 3 of the Act or, alternatively, ss.6, 13 and 16 of that Act, were said to be ultra vires or invalid as being inconsistent with a law of the Commonwealth within the meaning of s.109 of the Commonwealth Constitution.
20 The second ground asserted that the first defendant failed to identify the fact that the proposed conduct was likely to seriously endanger the health or safety of another person or persons, namely, members of the public who purchased or were given the subject cocaine for personal use or consumption.
21 On 27 October 2006, a Statement of agreed facts, documents, issues and contentions on the separate questions was finalised between the parties. That document was subsequently tendered in the proceedings (Exhibit B). The introductory section of the Statement entitled “General”, set out relevant facts concerning the constitution of the Crime Commission, the office held by the first defendant as chief executive officer of the Crime Commission and the status and role of the Assistant Director of that Commission, who, at all relevant times, was a “law enforcement officer” within the meaning of s.3 of the Act, a “special member of the Australian Federal Police” (within the meaning of s.4 of the Australian Federal Police Act 1979 (Cth) and a “special constable” (within the meaning of Part 4 of the Police (Special Provisions) Act 1901 (NSW).
22 Mr. Robinson of counsel, in his oral submissions on 2 November 2006, stated that the only relevant facts before the Court in relation to this question were those concerning the issue of the six controlled authorities under the State Act. He contended that they were the only relevant documents on the constitutional question, the authorities being either a “statutory decision” or an “instrument” under that Act. The only other relevant facts, according to Mr. Robinson, was that the individual plaintiffs had been arrested, charged with a number of offences under the Drugs (Misuse & Trafficking) Act 1985 (NSW) and the fact that the criminal trials concerning each of them were pending in the District Court of New South Wales. Mr. Robinson contended that the balance of the evidentiary material was only relevant to the third question (discussed below).
23 On 8 October 2004, approximately 10 kilograms of cocaine was unlawfully imported into Australia. None of the parties to the present proceedings was involved in, or aware of, the importation at the time it occurred. A person code named “Tom” had the primary role of selling the cocaine and he took possession of it. Some time after 8 October 2004, “Tom” buried the cocaine in bushland near Wahroonga. Later, he sold three kilograms of the cocaine and re-buried seven kilograms of it.
24 In consequence of information provided to the Crime Commission by “Tom”, he, on 14 December 2004, was registered as a Commission informer. A joint taskforce of New South Wales Police, Australian Federal Police was then established and the Crime Commission investigated the information provided by “Tom” and sought to obtain evidence regarding offences against Commonwealth and State law.
25 On 2 February 2005, a meeting was held between officers of New South Wales Police and the Crime Commission to discuss the potential sale of up to seven kilograms of the cocaine through the informer “Tom”. It is a fact of some significance that this occurred in a context in which “Tom” had earlier advised the Commission of two planned importations of significant quantities of cocaine proposed for February 2005.
26 At the meeting on 2 February 2005, the Assistant Director of the Commission gave a briefing. No Australian Federal Police were present on that occasion. In order to advance the investigation and, in order to maintain “Tom’s” credibility with a particular person and with other subjects of the investigation, the meeting approved in principle the supply of up to seven kilograms of cocaine in circumstances in which it was unlikely that the cocaine would be recovered by law enforcement officers.
27 The Statement of agreed facts set out the circumstances in which the six authorities were purportedly granted pursuant to s.6 of the Act by the first defendant for the conduct of six controlled operations. The authorities were granted on 8 February 2005, on 22 February 2005, 24 February 2005, 25 February 2005, 4 March 2005 and 17 March 2005.
28 The statement of agreed facts also established that late on 6 February 2005, “Tom” was allegedly instructed by a person who was suspected of being both the importer and distributor of the cocaine to retrieve and supply two kilograms of it to a named person. On 7 February 2005, the joint taskforce officers from the Crime Commission, New South Wales Police and Australian Federal Police went with “Tom” to the bushland near Wahroonga and retrieved seven kilograms of cocaine. It was sealed in several Australian Federal Police evidence bags and taken to the National Measurement Laboratory at Pymble apparently for weighing and testing for analysis.
29 On that date and some days later, all of the cocaine was delivered to the Assistant Director of the Crime Commission who placed it in a safe.
30 The agreed statement also sets out the facts concerning supply of cocaine to “Tom” for the purposes of enabling him to supply it to others and the facts concerning transactions involving such supply. The statement also records the facts concerning money received by “Tom” in exchange for the cocaine.
31 Each of the first, second, third, fifth and sixth authorities purported to permit, according to their respective terms:-
(a) One or more specified “law enforcement officers” (within the meaning of the Act) to possess and supply stated quantities of cocaine.
(b) An “authorised civilian participant” (within the meaning of the Act) identified in the Authorities to possess and supply stated quantities of cocaine.
32 The details of the activities authorities are set out in paragraph [36]. The first authority related to the supply of the two kilograms of cocaine.
33 Each of the authorities listed the Assistant Director of the Commission as a law enforcement officer.
34 The first defendant, in each authority, identified by name the relevant law enforcement officer to conduct the controlled operation and the identity of the civilian participant by reference to an informer number. An authority was purportedly granted in each case for such persons to engage in the controlled activities specified in a table set out in paragraph 6.
35 The authorities purported to authorise “Tom” and named law enforcement officers to possess quantities of the said cocaine, to supply those quantities to the persons named in the authorities, and to deal with the money paid in exchange for the cocaine supplied. The Crime Commission alleges that the cocaine was supplied in accordance with the authorities and that money was received in exchange.
36 Reproduced below are the terms of the authorities, insofar as the particular controlled activities specified are concerned:-
(a) Authority (Operation No: 05/0056) granted on 8 February 2005
(i) Nature of controlled activities by law enforcement participant
Possession and supply of 2 kilograms of cocaine to Informer 719.
(ii) Nature of controlled activities by civilian participant
Possession and supply of 2 kilograms of cocaine to Gilbert Gedeon or any agent acting on his behalf in return for payment of $340,000 cash.
Hand $340,000 in cash, representing the proceeds of the sale of the cocaine, to Shane Hatfield or any agent of his.
(b) Authority (Operation No: 05/10038) granted on 22 February 2005
(i) Nature of controlled activities by law enforcement participant
Possess 1 kilogram of cocaine and supply the cocaine to Commission informer 719, code-named “Tom”.
(ii) Nature of controlled activities by civilian participant
Possess 1 kilogram of cocaine and supply that cocaine to Robert Pavan, and/or persons acting on his behalf or at his request, at Newtown, in exchange for $160,000.
Of the $160,000 received, hand $110,000 to Pavan, and the remaining $50,000 to Shayne Hatfield.
(c) Authority (Operation No: 05/01068) granted on 24 February 2005
(i) Nature of controlled activities by law enforcement participant
Possess 250 grams of cocaine and supply that 250 grams of cocaine to Commission informer 719, code-named “Tom”.
(ii) Nature of controlled activities by registered informer 719
Possess 250 grams of cocaine and supply that 250 grams of cocaine to Steve Sevastapoulos, Mario Alexandridis and another person known only as Joe, in return for the payment of $40,000.
Of the $40,000 received, hand $1,000 to Steve Sevastapoulos and hand the remaining $39,000 to Shayne Hatfield.
(d) Authority (Operation No: 05/01109) granted on 28 February 2005
(i) Nature of controlled activities by law enforcement participant
Possess one kilogram of cocaine and supply the cocaine to Commission informer 719, code-named “Tom”.
(ii) Nature of controlled activities by registered informer
Take possession of one kilogram of cocaine and supply this cocaine to Robert Pavan and/or persons attending with him or introduced by him, in return for payment of $160,000.
Retain the $160,000 received and hand it to Shayne Hatfield, at the time and place nominated by Hatfield.
(e) Authority (Operation No: 05/01373) granted on 4 March 2005
(i) Nature of controlled activities by law enforcement participant
Possess one kilogram of cocaine and supply the cocaine to Commission informer 719, code-named “Tom”.
(ii) Nature of controlled activities by registered informer
Take possession of one kilogram of cocaine and supply this cocaine to Robert Pavan and/or persons attending with him or introduced by him, in return for payment of sum of money expected to be $170,000.
Of the money received, Pavan is expected to retain $5,000 as a commission and the remainder is to be retained by Tom and handed to Shayne Hatfield, at the time and place nominated by Hatfield.
(f) Authority (Operation No: 05/01792) granted on 31 March 2005
(i) Nature of controlled activities by law enforcement participants
Possess 750 grams of cocaine and supply the cocaine to Commission informer 719, code-named “Tom”.
(ii) Nature of controlled activities by registered informer
Take possession of 750 grams of cocaine and supply this cocaine to Gilbert Gedeon and/or persons attending with him or introduced by him, in return for payment of $120,000 to be collected by Tom at a later date.
The $120,000 is to be retained by Tom and handed to Shayne Hatfield, at the time and place nominated by Hatfield.
37 On each of the occasions on which “Tom” supplied cocaine purportedly as a ”civilian participant” and as part of the controlled operations, he was visually observed by joint taskforce officers.
38 Subsequently, “Tom” was granted indemnities by both Commonwealth and New South Wales authorities covering all acts done by him under the Authorities.
39 It is agreed that the matters the subject of the authorities were not the subject of any permissions or authorisations under Part 1A of the Crimes Act 1914 (Cth) or of any order under s.39RA of the Drugs (Misuse and Trafficking) Act 1985 (NSW).
40 On various dates in May 2005, the five plaintiffs were arrested and charged in respect of alleged supply of a prohibited drug contrary to the Drugs (Misuse and Trafficking) Act. They were committed for trial in April 2006.
41 The criminal proceedings against each of the plaintiffs in respect of these matters were listed before the District Court on 27 October 2006 for the purposes of setting a trial date in 2007. The proceedings are due to be relisted before the District Court for the purpose of setting them down for trial.
42 All of the charges in relation to each of the plaintiffs concerning the cocaine referred to in the agreed statement resulted from the controlled operations undertaken pursuant to the Authorities.
THE COMMONWEALTH PROVISIONS: CRIMINAL LIABILITY
43 The issue concerning on the “constitutional question” in the present proceedings and discussed below is whether the State Act, by its terms and/or in its operation per medium of the authorities purportedly granted under it by the first defendant, conflicts with the abovementioned provisions of Commonwealth law that create criminal liability and/or with the provisions of Part 1AB of the Crimes Act 1914 (Cth).
44 The relevant Commonwealth laws that are said by the plaintiffs to lead to invalidity are identified in the statement of agreed facts and have been referred to in paragraph [21] above.
45 In that statement, the following is recorded:-
“The plaintiff contends (and the defendants deny) that ss.13, 16, 17 and 18 of the [State] Act were inconsistent with subparagraphs 233B(1)(a)(iv), (v) and (vi) of the Customs Act, and Part 1AB of the Crimes Act 1914, and thus invalid by operation of s.109 of the Commonwealth Constitution.”
46 The plaintiffs’ supplementary submissions additionally raised the question of claimed inconsistency arising by virtue of the operation of certain money laundering provisions in Division 400 of the Criminal Code (Cth). The relevant provisions are set out below.
(a) The Customs Act provisions
47 Section 233B, as it stood at the relevant period, provided as follows:-
“(1) A person commits an offence if:-
(i) possesses goods on board a ship or aircraft; or
(ii) brings goods into Australia; or
(iii) imports goods into Australia; or
(vi) possesses goods that are reasonably suspected of having been imported into Australia in contravention of this Act; or
(b) The goods are a prohibited import to which this section applies.
(1AAB) Subparagraph (1)(a)(i), (ii), (iv), (v) or (vi) does not apply if the person proves that the person had a reasonable excuse for doing the act referred to in that subparagraph.
48 Section 233B of the Customs Act 1901 (Cth) provided that the prohibited imports to which s.233B applies are “… prohibited imports that are narcotic goods and the prohibited exports to which this section applies are prohibited exports that are narcotic goods”.
49 “Narcotic goods” are defined in s.4 of the Customs Act as goods consisting of a narcotic substance. “Narcotic substance” is in turn defined by s.4 as any substance named in Schedule VI to the Act. That Schedule includes the substance cocaine.
50 The remaining provisions of s.233B are not relevant to the present proceedings.
(b) The Criminal Code Act (money laundering) provisions
51 Part 10.2, Money laundering, Division 400 of the Criminal Code Act 1995 (Cth) contains a number of provisions to be found in ss.400.1 to 400.16.
52 For the purposes of the present proceedings, attention may be confined to the following.
53 Section 400.2 deals with the meaning of dealing with money or other property. Attention may be confined to the provisions of s.400.2(1)(a)(i) and (b) of the Criminal Code:-
“400.2(1) For the purposes of this Division, a person deals with money or other property if:-
(a) the person does any of the following:-
(i) receives, possesses, conceals or disposes of money or other property;
…
(b) the money or other property is proceeds of crime, or could become an instrument of crime, in relation to an offence that is a Commonwealth indictable offence or a foreign indictable offence.
54 The expression Commonwealth indictable offence is defined in s.400.2(3) as follows:-
“Commonwealth indictable offence means an offence against a law of the Commonwealth, or a law of a Territory …, that may be dealt with as an indictable offence (even if it may, in some circumstances, be dealt with as a summary offence).”
55 The expression “deals with money or other property” is defined in s.400.2(2)(a)(i) and (b)(i) of the Criminal Code as follows:-
“400.2(2) For the purposes of this Division, a person deals with money or other property if:-
(a) the person does any of the following:-
(i) receives, possesses, conceals or disposes of money or other property;
…
(b) the person does any of the matters referred to in paragraph (a):-
(i) in the course of or for the purposes of importation of goods into, or exportation of goods from, Australia; or
56 Sections 400.3(1), 400.4(1), 400.5(1), 400.6 and 400.7(1) of the Criminal Code make it an offence (defined in the Dictionary of the Criminal Code to mean an offence against a law of the Commonwealth) for a person to deal with money (as defined in s.400.2) and the money is, and the person believes it to be, proceeds of crime or the person intends that the money will become an instrument of crime, and at the time of the dealing the value of the money is as specified in one or other of the last mentioned sections of the Code.
57 There are other provisions of the code that make it an offence for a person to deal with money and the money is proceeds of crime or there is a risk that the money or property will become an instrument of crime and the person is reckless as to the fact that the money is proceeds of crime or the fact that there is such a risk and at the time of the dealing the value of the money is as specified in the relevant provisions (ss.400.3(2), 400.4(2), 400.5(2), 400.6(2) and 400.7(2) of the Code.
58 It is also an offence for a person to deal with money and the monies either are proceeds of crime or there is a risk that the money or property will become an instrument of crime and the person is “negligent” (within the meaning of s.5.5) as to the fact that the money or proceeds is proceeds of crime or the fact that there is a risk that it will become an instrument of crime and at the time of the dealing the value of the money is as specified in the relevant sections (ss.400.3(3), 400.4(4), 400.5(3), 400.6(3) and 400.7(3) of the Code).
59 Other relevant provisions of the Code include those concerned with attempts to commit an offence, the offence of incitement, the offence of conspiracy to commit an offence and an offence in respect of aiding, abetting, counselling or procuring the commission of an offence by another person (respectively ss.11.1, 11.4, 11.5 and 11.2 of the Code).
60 Section 11.3 of the Code extends criminal liability for an offence where a person who has, in relation to each “physical element” (within the meaning of s.4.1) of an offence, a “fault element” within the meaning of s.5.1 (applicable to that physical element) and who procures conduct of another person that, whether or not together with conduct of the procurer, would have constituted an offence on the part of the procurer if the procurer had engaged in it, is taken to have committed that offence and is punishable accordingly.
(1) THE “CONSTITUTIONAL QUESTION”
61 Detailed written and oral submissions were made on behalf of the plaintiffs, the defendants and the Attorney-General for New South Wales. I set out in the paragraphs that immediately follow the essential contentions and submissions in summary form. They will then be considered in greater detail later in the judgment.
(a) The plaintiffs’ contentions on the “constitutional question”
62 The plaintiffs’ contentions may be summarised in the following terms:-
(a) That the possession and conveyance of some or all of the cocaine mentioned in the Authorities by the named “law enforcement officers” and/or the “authorised civilian participant” in accordance with the Authorities issued under the Act, amounted to the commission (whether as principals or accessories) by the particular officers and/or participants of breaches of s.233B(1)(a)(iv), (v) and (vi) of the Customs Act 1901 (Cth). (Section 233B was repealed and replaced by new provisions of the Criminal Code 1995 (Cth) relating to import – export offences (see ss.307.1 to 307.7 and 314.1 and 314.4). The new provisions commenced on 6 December 2005.)
(b) That the proposed and actual dealing with money paid for the said cocaine was capable of constituting or constituted offences under ss.400.3, 400.4, 400.5, 400.6(1) and (2), 400.7(1), 400.8 and 400.9 of the Criminal Code 1995 in the Schedule to the Criminal Code Act 1995 (Cth) (whether as principals or accessories).
(c) That the authorities could not have been authorised pursuant to Part 1AB of the Crimes Act 1914 (Cth).
(d) That in the premises stated in the agreed statement of facts, ss.6, 7, 13, 16, 17, 18 and 19 of the Act were inconsistent with s.233B(1)(a)(iv), (v) and (vi) of the Customs Act and with Part 1AB of the Crimes Act 1914 and thus invalid by operation of s.109 of the Commonwealth Constitution.
63 The plaintiffs relied upon five primary submissions:-
(a) Firstly, they contended that the State Act is invalid insofar as it is inconsistent with Commonwealth provisions as follows:-
(i) section 233B(1)(a)(iv), (v) and (vi) of the Customs Act (possession or conveyance of narcotic goods); and
(ii) sections 400.3, 400.4, 400.5, 400.6(1), 400.6(2), 400.7(1), 400.8 and 400.9 of the Criminal Code 1995 in the Schedule to the Criminal Code Act 1995 (Cth) dealing with money and property;
(iii) section 11.1 to 11.5 of the Criminal Code (ancillary offences);
(iv) Part 1AB of the Crimes Act 1914 (Commonwealth controlled operations provisions).
(b) Secondly, in the alternative, the relevant provisions of the Act “alter, impair or detract from” or “qualify, impair, undermine or negate” the operation of the abovementioned Commonwealth laws within the meaning of the test set out in Victoria v. Commonwealth (1937) 58 CLR 618 at 630 per Dixon, J.; Australian Mutual Provident Society v. Goulden (1986) 160 CLR 330 at 337.5 and 339.7; Telstra Corp. Limited v. Worthing (1999) 197 CLR 61 at 76 [27]-[28] and 78 [31]-[32] per Gleeson, CJ., Gaudron, McHugh, Gummow, Kirby, Hayne, Callinan, JJ. and Apla Limited v. Legal Services Commissioner (NSW) (2005) 79 ALJR 1620 at [41]-[43] per Gleeson, CJ. and Heydon, J., [192]-[209], per Gummow, J., [298]-[304] per Kirby, J. in dissent on application of the principles and [485] per Callinan, J.
(c) Thirdly, in the alternative, Part 1AB of the Crimes Act 1914 (“Controlled operations for obtaining evidence about Commonwealth offences”) “covers the field” (notwithstanding the declaration of an “intention” in s.15GA for the concurrent operation of State and Territory laws) in relation to:-
(i) “serious Commonwealth offences”;
(ii) “serious” State offences that have a federal aspect;
(iii) “commonwealth offences” within the meaning of those expressions in ss.15H and 15HB and s.3AA of the Crimes Act 1914.
(d) Fourthly, in the alternative, the New South Wales Parliament does not have legislative power to make laws in respect of controlled operations that purport to make lawful that which would otherwise constitute a Commonwealth offence in the absence of a corresponding Commonwealth law that expressly permits it.
(e) Fifthly, in the alternative, if the relevant provisions of the Act are not held invalid, they must be read down so as to avoid conflict with or detraction from any Commonwealth laws. The said provisions must be read as not authorising the undertaking of certain criminal conduct, which conduct would otherwise constitute a breach of Commonwealth laws or would constitute a Commonwealth offence.
(b) Submissions of the New South Wales Crime Commission
64 The Crime Commission responded first, on the aspects of claimed direct and indirect inconsistency and, secondly, that even if there could be said to have been a breach of the provisions of s.233B by reason of activities carried out during the controlled operations, the “reasonable excuse” provisions (discussed below) would apply.
65 Mr. Temby, QC., for the Crime Commission, submitted that the alleged inconsistency with Commonwealth law is not such that it would be concluded that the State Act (or any provision of it) must be invalid for all circumstances. There would, he noted, be many cases in which no Commonwealth law could have a role to play. An authority granted under the State Act in such cases could only provide authorisation for a breach of New South Wales law. Any inconsistency as claimed in the present proceedings could not result in invalidity in the State Act for all purposes. It was further contended that s.109 of the Constitution does not invalidate s.13 and s.19 of the State Act to the extent that those sections remove liability under New South Wales law.
66 The Crime Commission also relied upon a submission based upon the provisions of s.233B(1AAB) which provided that s.233B(1)(a)(vi), (v) and (vi) did not apply if the person in question proved that he or she had “a reasonable excuse” for doing the act in question. The Commission contended that in the present case, all relevant persons had a reasonable excuse for all of their actions regarding the cocaine from the time that it was dug up until the various times that it was supplied. This was said to have consisted of the execution of a policing operation calculated to gather evidence of serious offences. The existence of the authorities enhanced the excuse, but it was contended the authorities were not necessary for the excuse to be valid: Medina (1995) 84 A. Crim. R. 316.
67 In relation to the federal and State Act provisions regulating controlled operations, Mr. Temby also submitted that the fact that conduct may be authorised under two pieces of legislation arising under two heads of power, or arising under statutes enacted by different Parliaments, does not, in light of the nature of the provisions, give rise to an inconsistency. He submitted that on no reasonable construction could the State Act be construed as providing for the authorisation of breaches of Commonwealth laws. Even if it could, s.31 of the Interpretation Act 1987 (NSW) would require the State Act to be “read down” so that any such construction would be avoided.
(c) Submissions of the Attorney-General intervening
68 Dr. Renwick submitted that the only constitutional issue before the Court was whether the provisions of the three Commonwealth statutes in question, the Customs Act, the Crimes Act 1914 and the Criminal Code 1995 were directly or indirectly inconsistent with the State Act such that, by operation of s.109 of the Constitution, the provisions of the latter Act were invalidated. Dr. Renwick emphasised that the case was to be decided on the basis of the agreed facts and for the purposes of answering the separate questions.
69 The Attorney-General submitted:-
(a) “In relation to sub-section 233B(1)(a)(iv), (v) and (vi) of the Customs Act 1900 (Cth)
(i) There is no direct inconsistency between the Act and the above provisions of the Customs Act as, properly construed, the State Act simply immunises the controlled operation from New South Wales law (relevantly the Drug Misuse and Trafficking Act 1985 (Cth)) and not Commonwealth law: Interpretation Act 1987 (NSW); Love & Peters v. Attorney-General (NSW) (1990) 169 CLR 307. The authorities granted under the State Act will not be construed as authorising anything which would be beyond State constitutional power.
(ii) Even if that were not so, acts done pursuant to the authorities confer a ‘reasonable excuse’ within the meaning of the relevant provisions of the Customs Act so that there is no actual basis to argue inconsistency based on the asserted impossibility of dual obedience, nor a diminution or removal by the State law of a right, privilege or entitlement conferred by the Commonwealth law.”
(b) Part 1AB of the Crimes Act 1914 (Cth)
(i) There is no indirect inconsistency because, by s.15GA of the Crimes Act 1914 (Cth), the controlled operations provisions of that Act expressly do not “cover the field”, and that statement of intention should be treated as determinative: Re Credit Tribunal; ex parte General Motors Acceptance Corp. (Australia) (1977) 137 CLR 545 at 463-464 per Mason, J.
(ii) There is no diminution or removal by the State law of a right, privilege or entitlement conferred by Part 1AB of the Crimes Act 1914 (Cth) as the State Act deems operations authorised under that Part of the Crimes Act to be authorised under the State Act.
(iii) It is irrelevant that there may be different pre-conditions to the granting of authorisations under the Crimes Act 1914 (Cth) as compared to the State Act.
70 In relation to the money laundering provisions in s.400 of the Criminal Code Act 1995 (Cth), Dr. Renwick submitted that those provisions were premised upon the establishment of an underlying criminal offence and that the only one nominated in these proceedings was s.233B of the Customs Act.
Analysis of the “constitutional question”
71 The issues in relation to the “constitutional question” are considered below in terms of the following:-
(a) The statutory federal and State schemes for the authorisation of controlled operations.
(b) The issue of “direct inconsistency”:-
(i) Customs Act 1902 (Cth);
(ii) Criminal Code Act 1995 (Cth).
(c) The issue of indirect inconsistency.
(d) The “covering the field issue” and s.109 inconsistency.
(a) Statutory schemes for controlled operations
72 The enactment of legislation for controlled operations at the Federal level and, in some States (New South Wales, Queensland and South Australia) occurred as a direct response to the High Court’s decision in Ridgeway v. The Queen (1995) 184 CLR 19. Part 1AB of the Crimes Act 1914 (Cth), “Controlled Operations for Obtaining Evidence about certain offences relating to Narcotic Goods” was inserted by Act No. 28 of 1996 and commenced on 8 July 1996.
73 In Ridgeway (supra), Mason, CJ., Deane and Dawson, JJ. at 43-44, observed:-
“… if it be desired that those responsible for the investigation of crime should be freed from the restraints of some provisions of the criminal law, a legislative regime should be introduced exempting them from those requirements. In the absence of such a legislative regime, the courts have no choice but to set their face firmly against grave criminality on the part of anyone, regardless of whether he or she be a government officer or ordinary citizen. To do otherwise would be to undermine the rule of law itself.”
74 The provisions of Part 1AB (and the same observation may be made in relation to comparable State legislation) have a circumscribed field of operation. They do not prohibit law enforcement officers or agencies (or other participants) from engaging in undercover operations unless an approval under the provisions of Part 1AB is first obtained. See, in this respect, Regina v. Giaccio [1997] SASC 6103 (29 April 1997 at [49]). They are directed, inter alia, to establishing a legislative base for authorisations to be given to controlled operations (see discussion below).
(i) Part 1AB – Controlled operations for obtaining evidence about Commonwealth offences
75 In general terms, Part 1AB of the Crimes Act 1914 (Cth) establishes a scheme for the authorisation of law enforcement officers and, in some instances, civilian participants to engage in what otherwise would be unlawful conduct undertaken during the course of the investigation of serious offences. As the title to Part 1AB indicates, the scheme is directed to obtaining evidence in relation to Commonwealth offences. The provisions of s.15G state that the objects of Part 1AB are to exempt from criminal liability and to indemnify from civil liability law enforcement officers and certain other specified persons who, in the course of a controlled operation, take an active part, or are otherwise involved, in the commission of a Commonwealth offence or an offence against a law of a State or Territory: s.15G(1).
76 There are a number of similarities between the provisions of Part 1AB and those in the State Act, although there are also some significant points of distinction. Mr. Temby, QC. acknowledged that the federal scheme is somewhat more stringent one than that established under the State Act. He contended, however, that that does not carry any consequence so far as the question of inconsistency is concerned. I agree.
77 The submission made on behalf of the Crime Commission was that the provisions of Part 1AB and those in the State Act were so drafted as to be complementary – and not to conflict with one another. This position, as discussed below, is reinforced by reason of the provisions of s.31 of the Interpretation Act 1987 (NSW).
78 Given that Part 1AB envisages that the laws of a State or Territory should operate concurrently, unless any such laws are directly inconsistent with that Part, there is, at least prima facie, difficulty in accepting a contention that Part 1AB was intended as a complete statement of the law governing the establishment and conduct of controlled operations for law enforcement purposes.
79 Just as a Commonwealth statute may evince an intention to make exhaustive and exclusive provision on a subject, so a Commonwealth law may also provide that it is not intended to make such exhaustive or exclusive provision with respect to the subject with which it deals. In the latter case, Commonwealth law permits State laws that are not inconsistent with Commonwealth law to operate. Subject to what is said below, s.15GA may, in my opinion, be seen as a provision that makes it clear that Part 1AB is not intended to cover the field and that its provisions leave room for the operation of the State Act insofar as it does not conflict with that Part: see generally, Regina v. Credit Tribunal ex parte General Motors Acceptance Corporation (1976-1977) 137 CLR 545 at 562-563 per Mason, J.
80 In that case (at 563), it was held that the provisions of s.75(1) of the Trade Practices Act 1974 (Cth) (the “TPA”) which provides “except as provided by sub-section (2), this Part is not intended to exclude or limit the concurrent operation of any law of a State or Territory” was a provision which eliminated any suggestion of inconsistency otherwise arising. The Attorney General in the present proceedings submitted that the provisions of s.15GA, in providing that “it is the Parliament’s intention that a law of a State or Territory should be able to operate concurrently with this Part unless the law is directly inconsistent with this Part” is an even stronger statutory provision than are the provisions of s.75(1) of the TPA.
81 The wording of s.15GA, in my opinion, may be considered to be an affirmative statement of Parliament’s intention that Part 1AB is to have a significant measure of concurrent operation and in that respect it is more emphatic in its terms than s.72(1) of the TPA. It is to be observed that s.15GA was not inserted as or expressed to be an ancillary or miscellaneous provision in Part 1AB. Instead, it takes its place in Division 1 – Objects of Part – and is clearly intended to reflect that the concurrent operation of State and Territory laws was one of the objectives in the establishment of the federal controlled operations scheme. The requirement for and the increasing formation and use in recent times of federal and State law enforcement partnerships in the investigation of serious crime reflects the need for complementary rather than conflicting federal, State and Territory laws in this area of law enforcement.
82 Part 1AB, accordingly, in my opinion, may be seen as giving expression to a legislative intent to establish a framework of accountability and control for controlled operations authorised in accordance with the Act and to do so concurrently, within expressed limits, with statutory schemes of a similar nature established under State and Territory legislation.
83 The inconsistency claimed by the plaintiffs should also be examined by reference to the provisions of the State Act.
(ii) Law Enforcement (Controlled Operations) Act 1997 (NSW)
84 The Act is designed to facilitate investigative operations in the nature of controlled operations authorised either under its provisions or under the provisions of a law of the Commonwealth (see the definitions of “authorised operation” and “corresponding law” in s.3 of the State Act). The expression “authorised operation” is defined in s.3 as meaning “a controlled operation for which an authority is in force and, in Part 3 and 5, includes any operation in the nature of a controlled operation that is authorised by or under the provisions of a corresponding law”.
85 The expression “corresponding law” is defined in s.3 as meaning “a law of the Commonwealth or of another State or Territory, referred to in Schedule 1”.
86 The State Act provides, in Part 2 (in particular in ss.6 and 8) for the granting of an authorisation for a controlled operation, including the engagement by law enforcement participants and/or civilian participants in “controlled activities” which are defined in s.3 of the State Act as including activities that, but for s.16, would be unlawful.
87 The exemption provided for in s.16 of the State Act is expressed to apply to an “authorised operation” and operates so as to apply to New South Wales agencies as identified in s.3 of that Act and to prescribed federal law enforcement agencies (the Australian Federal Police, the Australian Crime Commission and the Australian Customs Service – see the definition of “law enforcement agency” in s.3 of the State Act) in respect of activities that would otherwise constitute an offence under “… any other Act or law …”: s.16.
88 The latter provision is in the nature of a statutory exemption. It operates to immunise from criminal liability the authorised participants in a controlled operation who undertake activities in accordance with an authority granted under the State Act.
(b) The direct inconsistency issue
89 The constitutional question requires consideration of two matters:-
(i) Whether inconsistency is manifested by the provisions of the State Act.
(ii) Whether an authorisation granted under the State Act is itself capable of giving rise to an inconsistency for the purpose of s.109 of the Constitution.
90 The provisions of the State Act do not, in terms, expressly authorise the doing of an act rendered unlawful by Commonwealth law including the Customs Act or the Crimes Act 1914 (Cth). At most, it could only purport to have that effect indirectly through the medium of an authority granted under the provisions of Part 2 of the State Act.
91 I have proceeded upon the basis that the contentions and arguments advanced on behalf of the plaintiffs embraced both an alleged inconsistency arising from the terms of the State Act and indirect inconsistency through the medium of the authorisations granted under the State Act, the subject of these proceedings.
92 Although, on their face, those authorities could be interpreted as purporting to authorise what could otherwise be a breach of Commonwealth law, consistently with the High Court’s approach in Love & Peters v. Attorney-General (1990) 169 CLR 307, it is necessary to construe each of them by reference to the terms and width of the enabling statutory provisions in the State Act.
93 Mr. Robinson placed reliance upon what he referred to as the actual and practical operation of the Commonwealth laws referred to in paragraphs [47] and [49]. Each of those Commonwealth created offences are punishable by periods of imprisonment or monetary penalties or both. The submission was that one cannot, at the same time, “obey” a purportedly valid controlled operation authority granted under the State Act (which it was said allows one to “act with impunity”) and at the same time seek to “obey” the Commonwealth criminal laws by not breaching them.
94 Accordingly, so the argument ran, the possession or conveying of illegally imported cocaine within Australia would contravene ss.233B(1)(a)(iv), (v) and (vi) of the Customs Act 1901 in the absence of a “reasonable excuse” for doing such acts within the meaning of that expression in s.233B(1AAB).
95 It was contended that conduct that would constitute a contravention of these last mentioned provisions “may”, however, be undertaken within New South Wales under the purported cover of a controlled operation authority under the State Act. It was asserted that the State Act is not in terms limited in its expressed scope or operation so as to exclude such conduct in its “practical or legal operation”. Reliance was placed upon the provisions of s.7 of the State Act which purportedly “authorises” the conduct and s.16 which declares it “not unlawful” and that it “does not constitute an offence”. Reference was also made to the provisions of s.18 of the State Act which make lawful “ancillary activities” such as aiding and abetting. (The plaintiffs also relied upon the fact that there did not exist appropriate authorities in respect of the conduct in question granted under the provisions of Part 1AB of the Crimes Act 1914 (Cth)).
96 The argument put on behalf of the plaintiffs, accordingly, was that the State Act purports to, in effect, declare “lawful” the same conduct declared to be unlawful by the abovementioned Commonwealth laws. There being a direct and impermissible inconsistency, according to the submission, the State Act must be held to be invalid to the extent of such inconsistency. Alternatively, it was contended, the State Act must be read down so as to hold that it does not cover conduct which would otherwise constitute a breach of Commonwealth laws (if such a reading down were possible).
97 The Crime Commission’s response was essentially two-fold:-
(a) By reason of the “reasonable excuse” provisions in s.233B(1AAB) of the Customs Act, on the relevant facts in the proceedings, there was and could be no breach of s.233B by any participant named in the controlled operation authorities, they all having a reasonable excuse for all actions taken concerning the cocaine from the time that it was dug up until the time it was allegedly supplied to the plaintiffs. That reasonable excuse was described as “the execution of a policing operation calculated to gather evidence of serious offences (the existence of the authorities enhances the excuse, but the authorities were not necessary for the excuse to be valid”: Medina (1995) 84 A. Crim. R. 316.
(b) That on no reasonable construction could the State Act be construed as providing for the authorisation of breaches of Commonwealth laws. Even if the provisions of the State Act taken alone could be so construed, then s.31 of the Interpretation Act 1987 (NSW) would require a “reading down” of the State Act, so that such a construction would be avoided.
98 It was submitted on behalf of both the Crime Commission and the Attorney General that, properly construed, the State Act establishes a scheme whereby breaches of New South Wales law can be authorised for the purposes of a controlled operation. In the context of the present matter, it was implicit in the submission that the State Act and the authorities in question exempted the authorised participants in the controlled operations from the operation of the Drug (Misuse and Trafficking) Act 1985 (NSW). The Crime Commission contended that on no reasonable construction could the State Act be construed as providing authorisation for breaches of Commonwealth laws, as did the Attorney General. The Attorney submitted that the authorities granted under the State Act could not be construed as authorising anything that would be beyond State constitutional power.
99 Alternatively to the submission that the State Act provisions do not authorise the breach of any Commonwealth laws, it was contended that, even if they could lend themselves to such a construction, s.109 of the Constitution would only invalidate the State Act “to the extent of any inconsistency”, leaving intact the authority to breach State laws, in particular, the Drug (Misuse and Trafficking) Act 1985 (NSW) (which is the Act under which the plaintiffs have each been charged), and ensuring that evidence obtained pursuant to such authorities was not unlawfully obtained.
100 It was, accordingly, submitted that the actual authorities granted and in question in these proceedings, were “instruments” within the meaning of s.32 of the Interpretation Act (but not s.109 “laws”) and were to be construed as authorising nothing more than activities that fell within the scope of the provisions of the State Act.
(i) The Customs Act 1901 (Cth) - the provisions of s.233B(1AAB)
Reasonable excuse
101 Section 233B(1AAB) of the Customs Act was inserted by the Crimes Legislation Amendment (Telecommunication Offences and Other Measures) Act (No. 2 of 2004) (No. 127 of 2004). That section was inserted by Schedule 5 to the amending Act. The date of assent to the amendment was 31 August 2004 and the same became effective on 28 September 2004.
102 Whilst s.233B contains statutory defences as, for example, in s.233B(1A) and s.233B(1C), the provisions of s.233B(1AAB) are not expressed to constitute a defence provision as such. That subsection simply states that sub-paragraph (1)(a)(i), (ii), (iv), (v) or (vi) “does not apply” if the person proves that the person had a reasonable excuse for doing an act referred to in that sub-paragraph. Accordingly, wherever a reasonable excuse is established, the provisions of s.233B have no application whatsoever to the conduct that could otherwise have fallen within the conduct referred to in any of the abovementioned provisions of s.233B(1)(a).
103 There is no definition in the Customs Act 1901 as to what, for the purposes of s.233B, constitutes “a reasonable excuse” for the doing of an act referred to in s.233B(1)(a)(i), (ii), (iv), (v) or (vi).
104 Relevant authorities in which the concept of “reasonable excuse” has been considered have established a number of propositions and principles. Although these have arisen in a variety of statutory contexts, they may be taken as providing a guide to what was comprehended by that expression in s.233B(1AAB). They may be summarised as follows:-
(a) A “reasonable excuse” provision, being cast in general terms, is one, which in accordance with orthodox canons of construction, should not be given a narrow meaning: Ganin v. NSW Crime Commission (1993) 32 NSWLR 423, 435 and 436 per Kirby, P. (as he then was); Regina v. Tawill [1974] VR 84 at 88.
(b) The wide import of the phrase “without reasonable excuse” which, for present purposes may be taken as sufficiently similar to the phrase “a reasonable excuse”, has been held to be sufficiently wide to embrace defences, answers, justifications or excuses recognised by the established principles governing criminal responsibility, such as an absence of mens rea, mistake, insanity, infancy or duress: Tawill (supra) at 84.
(c) A “reasonable excuse” may also be taken as including cases involving the possession or conveying of prohibited goods where there is legitimate justification for doing so. In the context of the former provisions of s.233B(1)(c) of the Customs Act, Gibbs, CJ. in He Kaw Te v. The Queen [1984-1985] 157 CLR 523 at 539 provided illustrations or examples when he stated:-
“… since possession imports knowledge, ‘a reasonable excuse’, which falls to be considered only after possession has been proved, does not include mere lack of knowledge. Such a construction does not make the reference to ‘reasonable excuse’ meaningless or nugatory. A person may have narcotic goods in his possession because he has taken them from an addict and is about to destroy them, or because he has found them and is taking them to the police, or because he is an officer of Customs who has confiscated them, and these circumstances may provide him with reasonable excuse …”
In the same case, Brennan, J. (as he then was) observed at 588:-
“The third factor mentioned is the provision for proof of a reasonable excuse. Such an excuse is needed to exempt, inter alia, police and customs officers who have such prohibited imports in their possession from time to time in the course of their duty and innocent people who find themselves in possession of narcotic goods either by accident or in consequence of the actions of others.”
Later in the same judgment (at 589), Brennan, observed:-
“It follows that an exempting provision is needed to protect persons who, in the course of duty or otherwise acting with innocent motives, would have the mental state required to convict them of an offence under part (c) …”
(d) Where legislatures enact defences such as “reasonable excuse” it has been held, at least in some statutory settings, that they effectively give, and are intended to give, to the courts the power to determine the content of such defences. Defences in that form are categories of indeterminate reference that have no content until a court makes its decision: Taikato v. The Queen [1996] 186 CLR 454 at 466 per Brennan, CJ., Toohey, McHugh, Gummow, JJ. As observed above, however, whilst s.233B(1AAB) is not strictly a “defence”, the last mentioned observations are, in my opinion, instructive in its application.
105 Before dealing with the issue of “reasonable excuse” in the context of the present proceedings, I will separately state my conclusions with respect to the issues of inconsistency. In determining those issues, it is necessary to bring to account the evident policy behind the State Act, the Ridgeway “background” to which reference has earlier been made and to the actual terms of the legislation.
106 By reference to all of these matters, I am of the opinion that, properly construed, the State Act does not purport to authorise breaches or contraventions of the Commonwealth laws as claimed by the plaintiffs. The provisions of that Act do not, by their express terms, authorise such contraventions.
107 The same conclusion, in my opinion, may also be reached by application, as necessary, of the provisions of s.31 of the Interpretation Act 1987 (NSW) which would require a “reading down” of the State Act to the extent necessary to avoid the construction contended for on behalf of the plaintiffs.
108 In the application of s.31 of the Interpretation Act 1987 to the construction of the provisions of the State Act (including, in particular, those in s.6, determination of application, and s.16, lawfulness of controlled operations), it is necessary to identify indicia within the statute itself, the legislative purpose and the historical background to the legislation: Sportodds Systems Pty. Limited v. New South Wales (2003) 133 FCR 63.
109 I am of the opinion that the provisions of s.31 of the Interpretation Act 1987 (NSW) would require and operate such that the State Act is construed as operating to the full extent of, but so as not to exceed, the legislative power of the New South Wales Parliament. It would, of course, be beyond power for a State statute to purport to directly authorise the contravention of a Commonwealth Act or to make lawful the very thing that a Commonwealth Act stipulates as a criminal offence: see, by way of example, Love & Peters v. Attorney General (NSW) (1990) 169 CLR 307.
110 In particular, s.16 may, in accordance with the provisions of s.31 of the Interpretation Act, be construed as restricting exemption from criminal liability to that which could otherwise arise under any New South Wales Act or law. Such a construction would achieve the evident intention of Parliament in enacting the State Act, namely, the establishment of a statutory scheme that has as one of its objectives the protection of participants in an authorised controlled operation from criminal responsibility arising under State law concerning conduct undertaken in accordance with an authority granted under the State Act.
111 The subject matter of the State Act, as so understood, in my opinion, undoubtedly is one within the power of the New South Wales Parliament. It is legislation that clearly can be regarded as made for the peace, order and good government of the State. There is no difficulty in limiting it by construction so as to treat it as applying only to that part of its subject matter which is within power and with which Parliament clearly intended to deal as it could lawfully do so: Pidoto v. Victoria (1943) 68 CLR 87 at 110 per Latham, CJ. See also Sportodds Systems Pty. Limited v. New South Wales (2003) 133 FCR 63.
112 Alternatively, the provisions of s.233B(1AAB) may, depending upon the facts of a case, ensure that no conflict arises. In the present proceedings, the grounds relied upon in the amended summonses include allegations of “bad faith” and “impropriety”. In those circumstances, it would not, in my opinion, on an application for separate determination of particular questions, be appropriate to seek to determine, on the facts in evidence, whether or not a reasonable excuse in fact and in law existed in respect of the actions or conduct said to have been carried out pursuant to the relevant authorities.
113 The Crime Commission, as earlier noted, submitted that all relevant persons had a reasonable excuse for their actions concerning the cocaine. Whether, as a matter of final determination, that is so, is a question that may arise for later determination, either in the proceedings in this Court or during the course of the criminal proceedings that have been instituted in the District Court of New South Wales. On the basis of the analysis to which I have referred concerning the concept of “a reasonable excuse”, it is sufficient to state that in my opinion activities involving possession or supply of prohibited substances undertaken pursuant to and in accordance with a controlled operation authority granted under the State Act is capable of constituting a reasonable excuse within s.233B(1AAB), that is, if the authorised activities in question were established as:-
• activities that were engaged in by participants in an “authorised operation”;
• the activities were undertaken in the course of, and for the purposes of, the operation;
• the activities were authorised by and were engaged in, in accordance with, the relevant authority for the operation;
• the authority was one properly granted in accordance with the provisions of Part 2 of the State Act.
114 By reason of the plaintiff’s submissions on the role or conduct of “Tom”, I note that, if all the matters referred to in the preceding paragraph were established, then, by reason of the definition of “participant” and “civilian participant” in s.3 of the Act, s.16 would apply to activities covered by the relevant authorities.
(ii) The Criminal Code Act 1995 (Cth)
115 The plaintiffs assert s.109 inconsistency by reason of the claimed operation of s.400.3, s.400.4, s.400.5, s.400.6(1), s.400.6(2), s.400.7(1), s.400.8 and s.400.9 of the Criminal Code (Cth) in the Schedule to the Criminal Code Act 1995 (Cth) (the money laundering provisions) upon the basis of the facts contained in the statement of agreed facts, documents etc.
116 In relation to this submission, it is necessary to have regard to the provisions that govern the operation of Part 10.2 – Money laundering in Chapter 10 of the Criminal Code.
117 In order for there to be a breach of the provisions relied upon, it is necessary, inter alia, that the money in question be the “proceeds of crime” within the meaning of s.400.1(1). That provision defines “proceeds of crime” as follows:-
“… means any money or other property that is derived or realised, directly or indirectly, by any person from the commission of an offence that may be dealt with as an indictable offence (even if it may, in some circumstances, be dealt with as a summary offence).”
118 In the dictionary to the Code “offence” means an offence against a law of the Commonwealth. It is, alternatively, necessary that it be established that the person in question intends (or is reckless or negligent regarding the risk) that the money will become an “instrument of crime”. That expression is defined in s.400.1(1) of Part 10.2 as:-
“… money or other property is an instrument of crime if it is used in the commission of, or used to facilitate the commission of, an offence that may be dealt with as an indictable offence (even if it may, in the circumstances, be dealt with as a summary offence).”
119 Accordingly, it is necessary in either case that there be established an offence against a law of the Commonwealth.
120 The plaintiffs in their “supplementary submissions on the constitutional question” identify the relevant “offence” as that said to arise under s.233B(1)(a)(iv), (v) and (vi) of the Customs Act 1901 (Cth).
121 The conclusions earlier expressed, namely, that on the basis of the agreed facts it has not been established, for the purposes of present proceedings, that there was a breach of s.233B of the Customs Act authorised by authorities issued under the State Act, the plaintiffs’ contention that there has been a breach of one or other of the money laundering provisions referred to above cannot be sustained. The reasons set out earlier in relation to “direct inconsistency” accordingly are relevant to this issue and need not be repeated. The agreed facts utilised for the purposes of the present proceedings would, in my view, if ultimately accepted by a tribunal of fact, constitute the authorities as authorising New South Wales and not Commonwealth offences.
122 I should add that the plaintiffs did not identify any specific offences of which the money might have become an instrument within the meaning of the money laundering provisions.
I have, accordingly, also concluded that neither the State Act nor the authorities issued pursuant to that Act were inconsistent with the abovementioned provisions of the Criminal Code concerned with dealing with money and property.
(c) Indirect inconsistency
123 Many of the observations made in relation to direct inconsistency have application to the claim of indirect inconsistency between the State Act and Commonwealth law. Additionally, the Commonwealth laws that create criminal offences and that are here in question do not cover the same field as State laws. Further, as discussed below, the provisions of Part 1AB of the Crimes Act 1914 (Cth) do not, in my opinion, purport to “cover the field” with respect to controlled operations.
124 The possession and conveying of a prohibited substance such as cocaine could constitute federal and State offences under the former provisions of s.233B of the Customs Act 1901 (Cth) and as well offences under s.25 and s.26 of the Drug Misuse and Trafficking Act 1985 (NSW) which criminalise possession and use of such drugs. The plaintiffs, in the present proceedings, as noted earlier, have been charged with offences under the last-mentioned Act.
125 In Regina v. Stevens (1991) 23 NSWLR 75, the New South Wales Court of Criminal Appeal (Lee, CJ. at CL., Carruthers and Sharpe, JJ.) held that the Customs Act 1901 (Cth), in particular, former s.233B, and the provisions of the Drug (Misuse and Trafficking) Act, s.25 and s.26, may, in some instances, overlap and apply to the same set of circumstances. The clear purpose of s.233B was stated to be to facilitate the prohibition of the importation of narcotic goods into Australia whereas that of s.25 and s.26 of the Drug Misuse and Trafficking Act 1985 was to control the use of prohibited drugs and plants within New South Wales irrespective of their origin. It was held there was, accordingly, no inconsistency between the enactments. (See, in particular, Lee, CJ. at CL. at 82). Section 233B at the material times in these proceedings was not materially different to the form that the section took when considered by the Court of Criminal Appeal in that case.
126 The State Act is plainly intended to facilitate the investigation of State offences, including offences under the Drug Misuse and Trafficking Act 1985 (NSW). There is no prima facie presumption that a Commonwealth statute, by making it an offence to do a particular act, evinces an intention to deal with that act to the exclusion of any other law: Regina v. Winneke ex parte Gallagher (1982) 152 CLR 211, 224 per Mason, J. (as he then was). Just as it has been established that there is no inconsistency between the Commonwealth and State law with respect to the possession of a prohibited drug such as heroin, so in my opinion, there is no inconsistency between the State Act, which facilitates the investigation of offences of possession and conveyance of cocaine and such Commonwealth law.
127 Insofar as, contrary to the conclusion I have earlier stated, the authorities granted by the first defendant could themselves be construed as authorising contraventions of s.233B, any suggested inconsistency would be resolved by the application of the “reasonable excuse” provision, on the same assumption earlier stated, namely, that the evidence established the necessary facts to support such an excuse in each case.
128 I, accordingly, am of the opinion that it has not been established that activities of the law enforcement and civilian participants in the possession and/or conveyance of prohibited goods that had been imported into Australia for the purposes of a controlled operation would necessarily constitute contraventions of the provisions of s.233B(1)(a)(iv) or (v) of the Customs Act. Accordingly, the claimed direct or indirect inconsistency has not, in my opinion, been established.
(d) “Covering the field” – s.109 of the Constitution
129 In relation to the contention made on behalf of the plaintiffs that Part 1AB of the Crimes Act 1914 (Cth) “covers the field”, the following general matters are noted:-
(a) Where the Commonwealth Parliament’s intention to cover the field is in issue, it is to be resolved as a matter of statutory construction: Re Credit Tribunal; ex parte General Motors Acceptance Corp. (Australia) (1977) 137 CLR 545, 562 per Mason, J.
(b) In that respect, it is necessary to consider any provision in the relevant Commonwealth statute which throws light on the intention of the statute to make exhaustive or exclusive provision on the subject with which it deals: Re Credit Tribunal (supra) at 562 per Mason, J.
(c) It is necessary, in particular, for the Court in the course of such examination as to whether this Act manifests an intention to cover the field, to evaluate the significance to be attached to a provision such as s.15GA of the Crimes Act 1914 (Cth) (Concurrent operation of State and Territory laws). Such a provision is, at least, consistent with the fact that it is Parliament’s intention that the State Act should operate concurrently with the provisions of Part 1AB unless it is shown to be “directly inconsistent” with that Part.
130 The following general observations are noted at this point:-
(a) The provision of Part 1AB and the State Act both represent legislative responses to the High Court’s judgment in Ridgeway.
(b) Each is directed to similar ends – the provision, inter alia, of a legislative base for controlled operations by specified law enforcement agencies for the investigation of major or serious criminal activity and, for that purpose, to confer a statutory exemption upon participating law enforcement officers and other authorised persons from criminal responsibility for conduct undertaken in the course of an operation as well as an indemnity in respect of any civil liability.
(c) The provisions of the State Act (enacted later in time) in many respects mirrors or reflects the provisions of Part 1AB.
(d) The federal provisions and the State Act contain provisions (referred to in paragraphs [79] and [84] to [87]) which reflect a legislative intent by both federal and State (New South Wales) Parliaments that the two statutory schemes should operate in a complementary or harmonious fashion. This is to be expected, given the inter-jurisdictional nature of much organised crime, including the illicit trafficking in prohibited drugs and other multi-jurisdictional offences.
(e) Provisions in the State Act which reflect the policy adverted to in the preceding paragraph include:-
(i) The abovementioned provisions of s.15GA in Part 1AB, concurrent operation of State and Territory laws:-
“It is the Parliament’s intention that a law of a State or Territory should be able to operate concurrently with this Part unless the law is directly inconsistent with this Part.”
(ii) Section 16 of the State Act in that it applies, inter alia, to controlled operations under a law of the Commonwealth (see definitions in s.3 of “authorised operation”, “corresponding law” and to Federal agencies (the Australian Federal police, the Australian Crime Commission and the Australian Customs Service in the definition of “a enforcement agency”).
131 The plaintiffs submitted that Part 1AB of the Crimes Act 1914 (Cth) covers the field in relation to authorities for “controlled operations” relating to:-
(a) “serious Commonwealth offences”;
(b) “serious State offences that have a federal aspect”; or
(c) “Commonwealth offences” (within the meaning of those expressions in s.15H and s.15HB and s.3AA of the Crimes Act 1914 (Cth)).
132 Mr. Robinson, in his written and oral submissions, supported the Part 1AB “covering the field” submission by reference to a number of interlocking provisions to be found in Parts 1 and 1AB of the Crimes Act 1914 (Cth). In this respect, s.15H expressly provides that a controlled operation is one, the purpose of which is the obtaining of evidence that may lead to the prosecution of a person for a “serious Commonwealth offence or a serious State offence that has a federal aspect”: s.15H(b).
133 Section 15H(b)(2) defines, for the purposes of Part 1AB “serious State offence that has a federal aspect” as meaning “… a State offence that has a federal aspect and that has the characteristics of a serious Commonwealth offence”.
134 Mr. Robinson then referred to certain provisions in Part 1 of the Crimes Act 1914 (Cth), including, in particular, the provisions of s.3AA, State offences that have a federal aspect. The stated object of that section is to identify State offences that have a federal aspect either by reason of the fact that they potentially fall within Commonwealth legislative power by reason of the elements of the State offence, or the circumstances in which the State offence was committed or by reason of the fact that the Australian Federal Police were investigating such offences as incidental to the Australian Federal Police investigating an offence against a law of the Commonwealth or a Territory: s.3AA(1A).
135 Attention was also drawn, in particular, to the provisions of s.3AA(1)(c) and, in this respect, s.3AA(3) of the Crimes Act 1914 (Cth).
136 By reference to these provisions, Mr. Robinson submitted that, in the field of illegally imported cocaine, the Commonwealth Act covers the field of regulation of potential criminal activity to the extent that such conduct involves a Commonwealth offence or a State offence that has a federal aspect or in relation to “serious Commonwealth offences” (the latter, it being submitted, covering offences under to s.25 of the Drugs (Misuse and Trafficking) Act 1985 (NSW) (the supply of prohibited drugs)).
137 Mr. Robinson submitted that, in the present proceedings, the six authorities issued under the State Act, against the background of the scope and operation of Part 1AB, revealed “a real conflict between the schemes” and he relied, in particular, in this respect on the fact that there were more “checks and balances” under the Commonwealth scheme than the State. The two particular aspects emphasised were, firstly, the more stringent conditions in s.15I(2A)(b) (whereby the exemption from criminal responsibility under s.15I(1) does not apply to a person who is believed to have been involved, other than for law enforcement purposes, in the criminal activity in respect of which the controlled operation was authorised). Secondly, the provisions of s.15M(e) of Part 1AB whereby the authorising officer must, inter alia, be satisfied that:-
“(e) The operation will be conducted in a way that ensures that, to the maximum extent possible any illicit goods involved in the operation will be under the control of an Australian law enforcement officer at the end of the operation.”
138 The agreed facts in the present proceedings, it was said, involved controlled operations involving “Tom” selling in large quantities cocaine to seek to have his standing in the alleged criminal community established or improved, but that was not a purpose but was a lawful purpose under the Commonwealth controlled operation provisions. Additionally, the operations in question could not have been issued under the Commonwealth scheme in circumstances in which it was envisaged that the cocaine supplied would not be recovered at the end of the operations.
139 In summary, Mr. Robinson contended that the provisions of s.15I in Part 1AB which apply to a Commonwealth offence or an offence against the law of a State or Territory are extremely broad. He also emphasised the onerous reporting conditions under the federal scheme for controlled operations, emphasising that these aspects were distinctive and significant matters in the “covering the field” argument. I do not, with respect, consider that the more stringent conditions in Part 1AB of themselves in context of the other provisions of the Crimes Act 1914 (Cth) provide support for the contention that the federal Parliament thereby has evinced an intention to provide exhaustively for the authorisation of controlled operations.
140 As to the “constitutional question”, I have, accordingly, concluded:-
(a) Section 16 of the State Act is directed to providing a statutory exemption from criminal liability that would otherwise arise under State law to participants authorised to undertake controlled activities under an authority granted under the State Act.
(b) The terms of the State Act do not directly or expressly purport to make lawful contraventions of Commonwealth law.
(c) The terms of s.16 of the State Act must be construed as operating to the full extent of, but not to exceed the legislative power, of the State Parliament: s.31 Interpretation Act 1987 (NSW). Section 31, accordingly, ensures that s.16 of the State Act is to be construed and restricted to apply to State law. As the State Act does not purport to nor has the effect of authorising breaches of Commonwealth law it does not purport to operate to remove liability under Commonwealth law. Accordingly, there is no inconsistency.
(d) Insofar as the above stated position in (a), (b) and (c) were held not to be so, I am of the opinion that, an authority duly granted under the State Act for controlled operation activities undertaken in accordance with such an authority, is capable of being or constituting a “reasonable excuse” within former s.233B(1AAB) of the Customs Act. Whether an authority and activities purportedly carried out in accordance with that authority do constitute a reasonable excuse in a particular case will fall to be determined on the facts of that case.
(2) THE “JURISDICTIONAL FACT” QUESTION
141 The second question for separate determination is set out in paragraph [11] above.
142 The relevant statutory provision arising in respect of the “jurisdictional fact” question is s.7(1)(b) of the State Act. The plaintiffs stated that they will contend at the final hearing together and, in the alternative, that:-
(a) section 7(1)(b) is a jurisdictional fact and the Court must determine the factual question for itself on the evidence adduced before it; and
(b) in any event, the decision made by the first defendant Commissioner was not reasonably open to him on administrative law grounds.
143 The plaintiffs, in particular, contended in their respective summonses, that the relevant authorisations, each of which involved the sale of cocaine to the plaintiffs, was in excess of the powers of the first defendant to authorise pursuant to the State Act or, at all, as they were said to be issued in breach of the prohibition contained in s.7(1)(b). This was argued on the basis that the proposed operations involved a civilian participant in the controlled operations engaging in conduct that was likely to seriously endanger the health or safety of another person or persons, namely, members of the public that were to purchase or were to be given the subject cocaine for personal use or consumption.
144 The “jurisdictional fact” question was therefore advanced as a threshold question to be separately determined.
145 In terms of jurisdiction, it was contended on behalf of the plaintiffs, that it cannot be doubted that the Court’s judicial review or, supervisory jurisdiction pursuant to ss.65 and 69 of the Supreme Court Act 1970, has been properly invoked in the proceedings. Additionally, declaratory relief has been sought. It was contended that the Court should be permitted to exercise that supervisory and general law jurisdiction.
146 Section 7(1)(b) of the State Act is said to be properly characterised as a statutory prohibition on the “chief executive officer” (as defined in s.3 of the Act) lawfully granting an authority pursuant to a s.5 application to conduct a controlled operation.
147 In these proceedings, it was contended that s.7(1)(b) commands that a controlled operation must not be granted in relation to a proposed operation that involves any participant in the operation engaging in conduct that is likely to seriously endanger the health or safety of that or any other participant, or any other person. This was said to be a “jurisdictional fact”.
The structure of the State Act
148 The provisions of Part 2, Authorisation of Controlled Operations, prescribe the procedure to be applied and followed for applications for authorities to conduct controlled operations on behalf of a law enforcement agency. That Part also contains provisions concerning the matters governing the determination of such applications as well as the restrictions or prohibitions on the conduct to which an authority relates (s.7). It is necessary to construe the provisions of s.7(1)(a) and (b) but this should be done, with due regard to the provisions of the Act as a whole, including, in particular, those in Part 2.
149 Section 5(1) of the State Act provides that a law enforcement officer for a law enforcement agency may apply to the chief executive officer of the agency for an authority to conduct a controlled operation on behalf of the agency. The application must provide particulars in relation to matters referred to in s.5(2)A. Section 6 and s.7 are key provisions and, accordingly, are reproduced in full:-
“(6) Determination of applications
(1) After considering an application for authority to conduct a controlled operation, and any additional information furnished under section 5 (3), the chief executive officer:-
(a) may authorise a law enforcement officer for the law enforcement agency concerned to conduct the operation, either unconditionally or subject to conditions, or
(b) may refuse the application.
(2) An authority to conduct a controlled operation on behalf of a law enforcement agency may not be granted unless a code of conduct is prescribed by the regulations in relation to that agency.
(3) An authority to conduct a controlled operation may not be granted unless the chief executive officer is satisfied as to the following matters:-
(a) that there are reasonable grounds to suspect that criminal activity or corrupt conduct has been, is being or is about to be conducted in relation to matters within the administrative responsibility of the agency,
(b) that the nature and extent of the suspected criminal activity or corrupt conduct are such as to justify the conduct of a controlled operation,
(c) that the nature and extent of the proposed controlled activities are appropriate to the suspected criminal activity or corrupt conduct,
(d) that the proposed controlled activities will be capable of being accounted for in sufficient detail to enable the reporting requirements of this Act to be fully complied with.
(4) In considering the matters referred to in subsection (3), the chief executive officer must have regard to the following:-
(a) the reliability of any information as to the nature and extent of the suspected criminal activity or corrupt conduct,
(b) the likelihood of success of the proposed controlled operation compared with the likelihood of success of any other law enforcement operation that it would be reasonably practicable to conduct for the same purposes,
(c) the duration of the proposed controlled operation.
(5) The chief executive officer must keep a written record of the reasons for which the chief executive officer is satisfied as to the matters referred to in subsection (3) (a).
(7) Certain matters not to be authorised
(1) An authority to conduct a controlled operation must not be granted in relation to a proposed operation that involves any participant in the operation:-
(a) inducing or encouraging another person to engage in criminal activity or corrupt conduct of a kind that the other person could not reasonably be expected to engage in unless so induced or encouraged, or
(b) engaging in conduct that is likely to seriously endanger the health or safety of that or any other participant, or any other person, or to result in serious loss or damage to property.
(2) A person must not be authorised to participate in a controlled operation unless the chief executive officer is satisfied that the person has the appropriate skills to participate in the operation.
(3) A civilian participant:-
(a) must not be authorised to participate in any aspect of a controlled operation unless the chief executive officer is satisfied that it is wholly impracticable for a law enforcement participant to participate in that aspect of the operation, and
(b) must not be authorised to engage in a controlled activity unless it is wholly impracticable for the civilian participant to participate in the aspect of the controlled operation referred to in paragraph (a) without engaging in that activity.”
150 Parts 2, 3 and 4 of the State Act are directed to the three objectives of the legislation – the authorisation of controlled operations (Part 2), the conduct of controlled operations (Part 3) and monitoring of controlled operations (Part 4).
151 The stated purposes of the State Act are to be found, not in any of these parts of the legislation but in the definition of “controlled operation”. That expression is defined in s.3 as meaning an operation which is conducted for the purpose of:-
(a) obtaining evidence of criminal activity or corrupt conduct; or
(b) arresting any person involved in criminal activity or corrupt conduct; or
(c) frustrating criminal activity or corrupt conduct; or
(d) carrying out an activity that is reasonably necessary to facilitate the achievement of any purpose referred to in paragraph (a), (b) or (c);
being an operation that involves, or may involve, a controlled activity.
152 The expression “controlled activities” is defined in s.3 as meaning “… an activity that, but for s.16, would be unlawful”.
153 As to the provisions of Part 2 of the State Act concerned with the authorisation of controlled operations, it is necessary to examine in some detail the provisions of ss.5, 6 and 7.
154 The legislature has determined that applications for authorities under the Act are to be determined by “the chief executive officer of the agency”. “Chief executive officer” is defined in s.3 as meaning a person for the time being holding office or acting as:-
“(a) in relation to New South Wales Police, the Commissioner of Police; and
(b) in relation to the Independent Commission Against Corruption, the Commissioner for that Commission; and
(c) in relation to the New South Wales Crime Commission, the Commissioner for that Commissioner; and
(d) in relation to the Police Integrity Commission, the Commissioner for that Commission; and
(e) in relation to a law enforcement agency prescribed by the regulations, the Chief Executive Officer (however described) of that agency,
and, in relation to an authorisation operation, means the Chief Executive Officer of the law enforcement agency on whose behalf the operation has been, is being, or is proposed to be conducted.”
155 It is apparent from these provisions that the legislature has determined that, unlike much legislation concerning the issue of search warrants and listening device warrants, under which it is common to find that an “authorised justice” is the issuing authority for such warrants, the legislature has determining that applications under Part 2 of the State Act are best granted by the chief executive officer of the law enforcement agency on whose behalf the operation is proposed to be conducted. The chief executive officer is taken as the person who holds the necessary operational experience for the making of such determinations. The importance or significance of the chief executive officer in question being satisfied as to the existence of “reasonable grounds to suspect” is emphasised by the provisions of s.6(5) which state that the chief executive officer must keep a written record of the reasons for which he or she “is satisfied” as to the matters referred to in s.6(3)(a).
Section 5 – applications for authorities
156 Section 5 of the State Act prescribes important procedural and other matters in relation to applications for an authority to conduct a controlled operation. The section is clearly directed to ensuring the establishment of a system that ensures that informed assessments of applications are made and accountability exists with respect to those applying for and those who approve such applications.
157 Section 5(2) deals with the initiating process whereby an authority may be made and s.5(2A) provides, with some specificity, the requirements for an application for such an authority. These are all matters antecedent to (and in the nature of conditions precedent) to any consideration of an application for authorisation of a controlled operation by the relevant chief executive officer of the agency in question.
158 It is evident that non-compliance with s.5(2) and s.5(2A) would carry the consequence that no authority could be validly granted. In that sense, the requirements set out in those sections may be seen as essential matters that precede any inquiry or examination and more readily construed as being jurisdictional facts. Mr. Temby, on behalf of the Crime Commission, also submitted that the provisions of s.8 of the Act were of a qualifying nature but prescribed the matters with which an authority issued under the Act must comply. Absent compliance, he contended, there can be no lawful authority.
159 The matters specified in s.5(2) and s.5(2A) are plainly matters of objective fact that are preliminary to the decision-making process. In that sense, they are of an extrinsic nature and depend upon establishing objective facts. They are to be contrasted with the factual references arising in, or in relation to, the conduct of the decision-making processes arising under s.6 and s.7 of the State Act.
160 In the contention of the Crime Commission, the provisions of s.6 and s.7 of the State Act provide directions by the Parliament as to how or as to the way in which the relevant chief executive is to exercise the power to grant or not to grant an authority under the State Act or whether to grant an authority only upon specified conditions.
161 The power to authorise an application for an authority to conduct a controlled operation arises under the provisions of s.6 of the Act. By reason of the significance of this section, it is necessary to examine its provisions.
Section 6 – determination of applications
162 Section 6(1) states that an application for a controlled operations authority may be granted, either unconditionally or subject to conditions or it may be refused.
163 Section 6(3) contains provisions that are fundamental to the statutory scheme. The matters to which they are directed are all matters that the chief executive officer of the relevant law enforcement agency is required to consider and who must in relation to each form the requisite state of mind as indicated by the phrase “is satisfied as to the following matters”. Section 6(3) then identifies four specific matters:-
(a) The first is the requirement for there to be a proper basis for the conduct of a controlled operation. This is expressed in terms of there being, to the satisfaction of the chief executive officer, “… reasonable grounds to suspect that criminal activity or conduct, is being or is about to be conducted in relation to matters within the administrative responsibility of the agency”. Such a statutory formulation requires the existence of facts which are sufficient to induce that state of mind in a reasonable person: George v. Rockett (1990) 170 CLR 104, 112.
(b) The second concerns the justification for the conduct of a controlled operation in terms of “… the nature and extent of the suspected criminal activity or corrupt conduct …”. This provision plainly directs attention to the need for the suspected criminal activity or corrupt conduct to be of such a nature that it warrants investigation by means of a controlled operation.
(c) The third requires that the chief executive officer be satisfied that the controlled activity (meaning an activity that, but for s.16, would be unlawful) is appropriate to, that is, suitable, proper or fitting to the suspected criminal activity or corrupt conduct. This also involves an issue as to proportionality.
(d) The fourth is directed to ensuring accountability in that the proposed controlled activities must be capable of being accounted for “… in sufficient detail to enable the reporting requirements of this Act to be fully complied with”.
164 The decision-making to be undertaken by the chief executive officer of the relevant law enforcement agency under s.6(3) in relation to each of the above four mentioned matters is not an unstructured exercise. Section 6(4) directs that in respect of all of the matters referred to in s.6(3), the chief executive officer is required to have regard to the matters in s.6(4)(a), (b) and (c). The provisions in (a) in requiring the chief executive officer to consider the reliability of any information as to the nature and extent of the suspected criminal activity or corrupt conduct would require an evaluation of the reliability of available information, having regard, inter alia, to the source and quality (including the specificity) of the information, corroborative material and other matters that bear upon the level of confidence that may be placed in it.
165 The provisions in (b) require an assessment to be made of the proposed controlled operation in terms of the likely prospects of success based upon a comparison with the likelihood of success of any other law enforcement operation that would be reasonably practical to conduct for the same purposes. Such an assessment will be relevant to, in particular, the issue of justification under s.6(3)(b) and to the appropriateness of the proposed controlled activities.
166 The provisions in (c) indicate the need for a finite and not an indefinite period for the proposed controlled operation and for an assessment to be made as to what is considered to be reasonably necessary in terms of duration.
167 It is clear that an authority to conduct a controlled operation may not be granted unless the chief executive officer has given consideration to each of these matters in s.6(4)(a), (b) and (c) and, in light thereof, he or she must be satisfied as to the matters in s.6(3)(a),(b), (c) and (d). The provisions of s.6, in other words, are first order issues that are foundational to the exercise of the power conferred by the Act. That does not, however, mean that that constitutes them jurisdictional facts (as to which see below).
Section 7 – certain matters not to be authorised
168 Section 7 is more confined in its focus and subject matter than s.6(3). That section focuses upon the type or nature of activity or conduct that may be authorised under s.6. Its terms prohibit the granting of an application that involves activity or conduct amounting to entrapment in the terms stated in s.7(1)(a) and, also prohibiting in terms of s.7(1)(b), conduct that “… is likely to seriously endanger the health or safety of that or any other participant, or any other person, or to result in serious loss or damage to property”.
169 The provisions of s.7(2) and (3) each require the chief executive officer to undertake an evaluation or assessment (denoted by the phrase in each subsection “… the chief executive officer is satisfied …”). Section 7(2) is directed to the requirement for a person to have the appropriate skills to participate in the operation whilst s.7(3) states the conditions to be satisfied before civilian participants may participate in a controlled operation.
170 Section 7(1)(a) and (b) employ the language of prohibition but do not contain references to the mental state of the decision-maker as found in s.7(2) and (3). This raises a question as to whether the different form in which s.7(1) is expressed is significant in determining whether the matters arising under s.7(1)(a) and (b) are jurisdictional in nature.
Are matters in s.7(1)(b) jurisdictional facts?
171 Mr. Stratton, SC. with Mr. Robinson on behalf of the plaintiff, Mr. Dowe, and Mr. Robinson on behalf of the plaintiffs, Messrs. Pavan, Zaiter and Gedeon, contended that s.7(1)(b) refers to “a jurisdictional fact” and that, accordingly, this Court should determine the factual question for itself on the evidence adduced before it. It was contended, accordingly, that the “jurisdictional” fact question is a threshold one and hence appropriate to be separately determined. Considerable reliance was placed upon the argument that s.7(1)(b) is properly characterised as “a statutory prohibition on the chief executive officer lawfully granting an authority pursuant to a s.5 application to conduct a controlled operation”.
172 Mr. Stratton and Mr. Robinson also contended that s.7(1)(b) is a necessary pre-condition to the valid exercise of power under s.6(1)(a) to grant an authority for a controlled operation. They contended that this must be so by reason of three matters:-
(a) the mandatory language of the section;
(b) the structure of the section in the context of Part 2 of the Act and the Act as a whole; and
(c) the scope and objects of the Act as evidencing Parliament’s intention.
173 They also argued that the Crime Commission’s position on the issue effectively seeks to render the issue under s.7(1)(b) immune from judicial review. On this approach, it was emphasised the Court would be limited in its ability to review or go behind the decision-maker’s decision so as to exercise its supervisory role over the lawfulness of executive decisions.
174 Before embarking on an examination of the detail of the arguments presented on behalf of the parties, it is, as well to examine two separate matters. The first concerns the relevant principles that determine what is a jurisdictional fact in relation to the exercise of a statutory power. The second concerns the nature of the provisions in s.7(1) of the State Act and the particular import of the subject matters with which they are concerned.
Jurisdictional facts: relevant principles
175 A primary proposition in resolving the question as to whether s.7(1)(b) raises a jurisdictional fact is that the answer to that question is essentially to be ascertained by a proper construction of its provisions in its statutory setting.
176 In the joint judgment of the High Court in Corporation of the City of Enfield v. Development Assessment Commission [1999] 199 CLR 135 (Gleeson, CJ., Gummow, Kirby and Hayne, JJ.), the High Court observed:-
(a) The term “jurisdictional fact” (which may be a complex of elements) is often used to identify the criterion, satisfaction of which enlivens the power of the decision-maker to exercise a discretion (at [28]).
(b) It is important to assess the position which the particular statutory provision in question occupies in the relevant statutory scheme and to determine its nature, having regard to that occupied by other provisions (at [32]).
(c) A provision which mandates circumstances in which, for example, an authority must either give or refuse a consent (as distinct, in that case, from issues that go to planning merits) is likely to be jurisdictional in nature (at [32]).
(d) The text of a particular provision may also indicate that the relevant criteria specified in the provision is not a matter for the relevant authority itself to determine as a matter of opinion (at [33]).
177 In Woolworths Limited v. Pallas Newco Pty. Limited (2004) 61 NSWLR 707, the following principles and propositions were formulated by Spigelman, CJ:-
(a) The case law and legal literature contains a great deal of terminological confusion about the concepts of “jurisdiction” and “jurisdictional facts”. The issue is one of statutory construction. What is required is a careful analysis of the statute which confers the jurisdiction. Consideration must be given to the language of the power under consideration and to the total context of the legislative scheme in which the power is conferred, including the scope and nature of the jurisdiction and of the fact said to be jurisdictional (at [5] and [6]).
(b) The Court is required to determine whether the repository of a statutory power has acted, or proposes to act, in a manner which transgresses the limits upon the exercise of the power that Parliament has conferred (at [9]).
(c) It is necessary to identify, in a particular case, the “indicators” of jurisdictional facts, including the scope and purpose of the legislative scheme and the terminology of “prohibition”.
(d) There is a distinction to be made between a fact that is an “essential preliminary to the decision-making process” and a “fact to be adjudged upon in the course of the inquiry”: Colonial Bank of Australasia v. Willan (1874) LR 5 PC 417 at 442-443. The Chief Justice identified as examples, Amalgamated Society of Carpenters and Joiners v. Haberfield Pty. Limited (1907) 5 CLR 33 at 53; ex parte Hulin; re Gillespie (1965) 65 SR (NSW) 31 at 32.
(e) The word “preliminary” does not, in this context, refer to a chronological sequence of events, but to a matter that is legally antecedent to the decision-making process. A decision-maker may well determine whether or not he or she has jurisdiction at the same time as he or she carries out the substantive decision-making process (at [47]).
(f) The extrinsic or ancillary or preliminary nature of the relevant fact makes it more likely that the fact is jurisdictional (at [48]).
(g) Particular facts and matters may exist which determine whether a matter is within power but do not inevitably arise in the course of considering the exercise of the discretionary power in question. The matter may be both distinct and also extrinsic to the decision-making process and be properly therefore regarded as jurisdictional in nature (at [50]).
178 Spigelman, CJ. in Pallas Newco (supra) at 719 identified the indicators that were relevant in that case – which involved a zoning provision in an environmental planning instrument made under the Environmental Planning and Assessment Act 1979 (NSW) – to a determination as to whether particular facts were jurisdictional in nature. In this respect, the propositions may be identified from the Chief Justice’s analysis:-
(a) Where issues of fact and degree arise, it will often be the case that these are matters which a decision-maker is intended by Parliament to determine and, accordingly, any error is an error within jurisdiction rather than an error going to jurisdiction (at [56]).
(b) However, it is not always the case that matters of judgment involved in determining the existence of facts, let alone matters of fact and degree, mean that the fact is not jurisdictional (at [60]).
(c) The overall statutory context may be determinative as to whether or not Parliament intended the existence of the fact in question to both objectively exist and be essential, notwithstanding the existence of elements of fact and degree, or even of judgment, that was required in the process of determining whether or not the relevant fact existed (at [61]).
179 In Timbarra Protection Coalition Inc. v. Ross Mining NL (1999) 46 NSWLR 55, Spigelman, CJ. referred to the concepts of “objectivity” and “essentiality” as two inter-related elements in the determination of whether a factual reference in a statutory formulation is a jurisdictional fact. In that context, the Chief Justice stated that Parliament can make any fact a jurisdictional fact in the relevant sense, namely, that it must exist in fact (objectivity) and that the legislature intends that the absence or presence of the fact will invalidate action under the statute (essentiality).
180 The Chief Justice stated (at p.65):-
“The authorities suggest that an important, and usually determinative, indication of Parliamentary intention, is whether the relevant factual reference occurs in the statutory formulation of a power to be exercised by the primary decision-maker or, in some other way, necessarily arises in the course of the consideration by that decision-maker of the exercise of such a power. Such a factual reference is unlikely to be a jurisdictional fact. The conclusion is likely to be different if the factual reference is preliminary or ancillary to the exercise of a statutory power …”
181 In that case, Spigelman, CJ. also observed that a factual reference in a statutory formulation relating to the instigation of a statutory decision-making process, is more likely, by reason of its extrinsic nature, to turn on an objective fact, than is a factual reference arising in, or in relation to, the conduct of the decision-making process itself.
The contentions of the parties on the “jurisdictional fact” question
182 Mr. Temby, QC., on behalf of the Crime Commission, adverted to and relied upon the enactment of the State Act as having occurred in the wake of Ridgeway (supra) and that it was designed to facilitate the fight against crime and corruption by the statutory scheme which it establishes.
183 In his oral submissions, Mr. Temby formulated the issue arising as to whether the judgment to be made pursuant to s.7(1)(b) of the Act is a judgment that is reserved for the chief executive officer of the agency in question, which is reviewable by this Court only on administrative law grounds (the Crime Commission’s submission) or whether it is a judgment which this Court may, in the event of challenge, make for itself on the basis of evidence, including fresh evidence, which is admitted before it.
184 Mr. Temby formulated a number of “points” enunciated by Spigelman, CJ. in Timbarra (supra) and contended that the important principle referred to by the Chief Justice in that case (at p.65, [44]) strongly militated in favour of concluding that the factual reference in s.7(1)(a) of the Act is a reference to a non-jurisdictional fact.
185 He also submitted that, unlike the reference in s.5(1) which he asserted related to a jurisdictional fact, namely, that there be an application by a law enforcement officer - a matter “preliminary” to the exercise of the power conferred by s.6 - the factual reference in s.7(1)(b) was a matter that occurs as part of the “statutory formulation of [the] power to be exercised by” the chief executive officer. The submission was that in this respect the evaluation of the likelihood (or otherwise) of serious danger to health or safety was “integral to the task that must be performed by the chief executive when making a decision pursuant to s.6” (written submissions, 9 October 2006, [16]). It was submitted in this respect that the decision necessarily arises in the course of the consideration of the relevant power and was, accordingly, a non-jurisdictional fact.
186 In further submissions, Mr. Temby contended that other considerations which support this conclusion include:-
• The fact that the issue posed by s.7(1)(b) must be addressed by the chief executive and is unlike that contained in s.5 (which is directed at the applicant).
• The fact that the factual issue raised by s.7(1)(b) is intrinsic to the chief executive’s decision and cannot be avoided by him or her also suggests that the fact is non-jurisdictional.
• The fact that the issue as to whether a proposed operation would be likely to endanger health and safety is located in s.7 rather than, for example, s.5, indicates that it involves a non-jurisdictional fact being part of the decision-making process rather than a part of the application process or otherwise antecedent to the decision-making.
187 Reliance was also placed by the Crime Commission in its submissions upon the purpose of the legislative scheme and of s.7(1)(b), in particular, and the nature of controlled operations and the role or function of controlled operation authorities. The Commission also placed reliance upon the proposition that unnecessary inconvenience would flow from a finding that s.7(1)(b) refers to a jurisdictional fact. The submission as to “inconvenience” will be addressed separately below (paragraph [212] to [213] and [219]).
188 In the extensive written submissions on behalf of the plaintiffs dated 24 October 2006 and in oral submissions, Mr. Stratton, SC. and Mr. Robinson relied, inter alia, upon the structure of the section in its immediate statutory context in Part 2 of the Act submitting that s.7(1) was in terms “… in stark contrast to s.6(3) & (4) and 7(2) & (3) …”.
189 Reliance was placed upon the fact that the last-mentioned provisions provided for the decision-maker to be “satisfied” as to certain matters. Section 7(1), on the other hand, as noted above, makes no such reference. In this respect, it was contended there was no need for the decision-maker to be satisfied as to anything. If the relevant facts exist (as to entrapment or risk to health and safety), then an authority cannot be granted.
190 Whilst the plaintiffs’ written submissions acknowledged that the decision-maker “may have to have regard to the s.7(1)(b) question, it is notably not a factor that was provided for in the legislation as to whether an application should be granted. It is specially absent as such a factor. If the factor exists, the decision-maker must not grant an authority. It is a “compliance issue” (paragraph [17] of the written submissions).
191 It is not possible to do justice to the very detailed and well-constructed submissions made on behalf of the plaintiffs in providing, as I have, reference to some only of the principal aspects of the submissions. I have, of course, closely examined the submissions in their entirety. I do, however, specifically record the substantive submission in paragraph [31] of the written submissions as follows:-
“Parliament’s intention as to the Act and, in particular, s.7, was therefore plain. The s.7 mandatory prohibition was to operate as a blanket prohibition on the valid grant of any authority in circumstances of entrapment or health and safety. They are dealt with as paramount matters and were expressly not included as part of the decision-making or determination process of the chief executive officer. There is no provision for a ‘balancing’ of these considerations by the chief executive officer. Parliament has already undertaken that task in the Act, and in respect of these two matters, it has provided for a prohibition. The chief executive officer is simply prevented from granting a certificate. He is bound to comply with the Act.”
Analysis of the jurisdictional fact question
192 In order to determine the position the provisions of s.7(1)(b) occupy in the scheme of the State Act and their nature, attention should first be given to the nature and the content of the “matters” to which the prohibitions under s.7 relate. In that respect, the following are noted:-
(a) The nature of the “matter” specified in s.7(1)(b) (from engaging in conduct that is likely to seriously endanger the health or safety of specified persons) needs to be considered in light of the whole of s.7(1), that is both subparagraphs (a) and (b) of that section:-
(i) Section 7(1) is essentially concerned with marking out limits or boundaries on the proposed activities or conduct of participants under a controlled operations authority which a chief executive officer of a law enforcement agency otherwise considers should be granted.
(ii) The nature of the “matters” under s.7(1)(a) and (b) are not in the nature of self-evident facts. They necessarily involve and require an evaluation or assessment of a proposed controlled operation by a person (the chief executive officer of the relevant law enforcement agency) who is presumed to hold the requisite knowledge and operational expertise to undertake those tasks.
(iii) The assessment, in particular, under s.7(1)(b) involves matters of fact and degree when determining its application. As stated by Spigelman, CJ. in Pallas Newco (supra), at [56]:-
“Where issues of fact and degree arise, it will often be the case that these are matters which a decision-maker is intended by Parliament to determine and, accordingly, any error is an error within jurisdiction rather than an error going to jurisdiction.”
The fact that a judgment involving matters of fact and degree is not, of course, necessarily conclusive: Pallas Newco (supra) per Spigelman, CJ. at [60], [61]. However, in the present proceedings, apart from the prohibitory terms of s.7(1)(b), the overall statutory context does not, in my opinion, offset the point made by Spigelman, CJ. as quoted above.
(iv) A process of assessment is required under s.7(1)(a). That provision is not expressed in a way that employs a “reasonable person” test. The “person” referred to in s.7(1)(a) is to be taken as the person who is the or a target of a proposed controlled operation as part of a particular investigation. As discussed below, the assessment that is required to be undertaken under s.7(1)(a) in relation to the target or targets is necessarily both an informed and an expert one in order for a judgment to be made on whether or not authorised activities would induce or encourage that person or persons to engage in criminal activity or corrupt conduct “of a kind” that he or she could not reasonably be expected to engage in unless induced or encouraged.
(v) The provisions of s.7(1)(b) also involve and require an objective evaluation or assessment of procedural or operational risk and a judgment to be made in relation to it. That risk is to be assessed in terms of a likelihood “… likely to seriously endanger the health or safety …”). An assessment of a potential or future risk may be a matter upon which different minds may differ.
193 The power in a law enforcement officer for a law enforcement agency to grant an authority to conduct a controlled operation is to be found in s.6 and not s.7 of the Act. On the making of an application under s.5(1) (which application must conform to that section and provide the particulars specified including a plan of the proposed operation etc.) the chief executive officer of the agency in question may then proceed to undertake a “determination” of that application. The matters fundamental to such a determination are those earlier discussed – the need for reasonable grounds to suspect, justification for a controlled operation having regard to the nature and extent of the suspected criminal activity or corrupt conduct, the appropriateness of the proposed controlled activities to the suspected criminal activity or corrupt conduct and the capacity for reporting so that the requirements of the Act may be fulfilled.
194 All of these matters require consideration and determination before a chief executive officer can be “satisfied” as to each matter. In many, if not most cases, it is only by undertaking an inquiry of those matters that the issues in s.7(1)(a) and (b) will then, in light of such inquiry and not divorced from it, be capable of assessment.
195 An analysis of the decision-making process in relation to both s.7(1)(a) and (b) warrant close examination. That process requires an exercise of judgment built upon an analysis of material facts. The question ultimately to be resolved is whether s.7(1) is directed to matters that must objectively exist before the statutory power may be exercised or whether the legislature intended that s.7(1) matters were for the chief executive, as the relevant authority, to determine as a matter of opinion.
(a) The matter arising under s.7(1)(a) – entrapment
196 Section 7(1)(a), generally speaking, is directed to preventing what is commonly referred to as “entrapment”, a term, Gaudron, J. in Ridgeway (supra) noted, is not a term of art nor one with any precise meaning (at p.70). Her Honour also observed that the critical consideration in characterising police conduct as “entrapment” was whether an offence was in fact the result of the criminal acts of law enforcement agents or of those acting on their behalf (at p.77).
197 In Regina v. Sloane (1990) 49 A. Crim. R. 270 at 272, Gleeson, CJ., in a passage cited by Brennan, J. in Ridgeway (supra) at 49-50 stated:-
“The concept of entrapment involves as a necessary element the idea that an accused person has been induced to commit a crime which he or she otherwise would not have committed or would have been unlikely to commit …”
198 In contrast, Gaudron, J. observed that in cases of “mere opportunity”, the accused person is fairly regarded as wholly responsible for his own actions (Ridgeway (supra) at 77). Cases that went beyond the provision of mere opportunity involved state-manufactured crime:-
“There is a crucial distinction, one which is not easy to draw … between the police or their agents – acting on reasonable suspicion or in the course of a bona fide enquiry – providing an opportunity to a person to commit a crime and the State actually creating a crime for the purpose of prosecution. The former is completely acceptable …” (Regina v. Mack at 917)
199 The principle underlying s.7(1)(a) is not difficult to identify. Police conduct which brings about what has been referred to as state-created crime is unacceptable and improper. To prosecute in such circumstances would be an affront to the public conscience: Regina v. Latif [1994] 1 WLR 104, 112 per Lord Steyn referred to by Lord Nicholls of Birkenhead in Regina v. Looseley [2001] 1 WLR 2060, 2068.
200 Accordingly, s.7(1)(a) requires that there be an assessment, inter alia, as to whether the person or persons who is/are to be the target(s) of a proposed controlled operation, is/are a person(s) reasonably suspected of being ready to engage in a particular form of criminal activity.
201 It has been observed that, on the basis of the particular provisions of s.7(1)(a), evidence of a particular target’s criminal predisposition would be relevant: Controlled Operations, Controlled Activities and Entrapment by Professor Eric Colvin (2002) 14 Bond LR 227 at 238 (footnote 54). That, of course, must, with respect, be correct. Accordingly, an assessment under s.7(1)(a), requires a chief executive to evaluate, as earlier discussed, known facts about the “person”, the target of the proposed operation.
202 In the light of the evaluation made, an appropriate judgment must then be formed. In terms of s.7(1)(a), the relevant matters would include those concerning the issues of intent and predisposition of the target(s). As part of a predisposition based analysis, the chief executive would need to consider any information that indicated that the target(s) already possessed the intent to commit a crime of the same or similar kind to the criminal activity proposed for a proposed controlled operation or that the target(s) was/were already presently disposed to commit such a crime should the opportunity arise.
(b) The matter arising under s.7(1)(b) – conduct likely to seriously endanger health and safety
203 Mr. Stratton, in his oral submissions, referred to “features” of s.7(1)(b) which contrasted with aspects of s.6, emphasising that s.7(1)(b), unlike s.6, is not framed in terms of the chief executive officer being “satisfied” and that the former is framed in terms of absolute prohibition. Mr. Stratton suggested in this respect a parallel between the provisions of s.7 of the State Act and s.35(3) of the Development Act 1993 (SA) which was the subject of decision in Enfield (supra). He observed that s.35(3) was not framed in terms of a person’s satisfaction or belief and it also was expressed in terms of an absolute prohibition.
204 Mr. Stratton, contended between the provisions of s.7(1)(b) and the provisions of s.6(3) (which does refer to the satisfaction of the chief executive officer), must be taken as an indication that the legislature intended the difference in order to make it clear that there was a prohibition on the matters proscribed by s.7(1)(b).
205 It was also submitted on behalf of the plaintiffs that the matters to which s.7(1)(b) are directed are “extrinsic” matters, that is, not one of the matters to be considered in the “weighing up process”. He contended that it comes into operation “… before we get to the weighing up process because it is an absolute prohibition”.
206 He also contended that the structure of the Act favours the contention that s.7(1)(b) is directed to a jurisdictional fact. The relevant “dichotomy”, he contended, was not between s.5 and s.7, but between s.6 and s.7.
207 Mr. Stratton referred to the joint judgment in Enfield (supra) at [32], [33] and [34], it being contended that the observations in those paragraphs were supportive of the plaintiffs’ argument in relation to the jurisdictional fact question. The judgment in that case, it was contended, supported the submission that s.7(1)(b) related to a jurisdictional fact.
208 Mr. Stratton also relied upon the matters and the approach taken to them in Pallas Newco (supra). There, the provisions of s.76B of the Environmental Planning and Assessment Act 1979 (NSW) employed the terminology of “prohibition”. Particular reliance was placed upon the observations of Spigelman, CJ. at [32] and [44]. Reference was also made to the judgment of Handley, JA. in The Warehouse Group (Australia) Pty. Limited v. Woolworths Limited [2005] NSWCA 269, with the observation that clause 51 of the Local Environmental Plan there in question imposed a restriction on the granting of consent but in terms that were not as strongly worded as the terms of s.7(1)(b) of the State Act. In paragraph [6] of his Honour’s judgment, Handley, JA. referred to clause 51 as one which “imposes a condition precedent to the existence of the Council’s power to grant consent to a relevant development application and compliance with this condition is a jurisdictional fact …”.
209 Section 7(1)(b), plainly, requires an assessment be made as to the likelihood or otherwise of serious danger to the health or safety of participants by examining the nature of the proposed controlled activities and other matters that form part of the plan of the proposed operation. These are all matters in which information, expertise and judgment combine for the purposes of making a prospective assessment. Of their nature, issues of risk to matters of health and safety often can only be properly assessed once the matters referred to in s.6(3)(a), (b), (c) and (d) have been fully assessed. In this way, and for this reason, the s.7(1) “matters” can hardly be regarded as extrinsic to or ancillary to the inquiry to be undertaken as part of the assessment process.
210 In terms of the dichotomy identified by the Privy Council in Colonial Bank of Australasia v. Willan (supra), the matters arising under s.7(1)(b) should not, in my opinion, be considered to be matters that are “essential preliminary to the decision-making process” but rather as facts “… to be adjudicated upon in the course of the inquiry”. The fact that such matters are not of an extrinsic or ancillary or preliminary nature, makes it less likely that those facts are jurisdictional in nature: see Pallas Newco (supra) at [48], [49] and [50].
211 A degree of flexibility accorded by a particular statute to the relevant factual reference may be taken as an indicator against the relevant facts being regarded as jurisdictional. Retrospective authority may be granted for conduct as referred to in s.14 of the State Act. Such conduct, in a life-threatening situation, may, contrary to s.7(1)(b), seriously endanger a person but be considered by the chief executive of the relevant agency, acting on an application under s.14, to fall within the circumstances in s.14(5) – that is, as conduct engaged in for the purpose of protecting a participant or any other person.
212 However, I do not consider that the issue of inconvenience greatly assists in the resolution of the question as to whether s.7(1)(b) relates to a jurisdictional or non-jurisdictional fact. That is a matter better determined upon the factors referred to in the discussion in this judgment.
213 Mr. Temby relied upon principles whereby questions of inconvenience may be relevant to statutory construction. In this respect he cited the dicta of Spigelman, CJ. in Timbarra (supra) at 72 wherein the Chief Justice stated:-
“Another factor, relevant to determining the intention of parliament, is the inconvenience that may arise from classifying a factual reference in a statutory formulation as a jurisdictional fact. Statutes are construed on the basis that parliament did not intend to cause inconvenience, although it can do so, and often has. Was it the intention of parliament to validate a development application which was not accompanied by a species impact statement when, on an objective test, it should have been?”
214 Reliance was also placed upon the Warehouse Group (Australia) Pty. Limited v. Woolworths Limited & Anor [2005] NSWCA 269 wherein Basten, JA. at [134] referred to the same principle in the context of dicta of Dixon, J. in Parisienne Basket Shoes Pty. Limited v. Whyte (1938) 59 CLR 369 at 391, albeit in relation to the determination of a fact by an inferior Court. Basten, JA. observed that no doubt the strong presumption referred to in that case is significantly diminished in relation to administrative tribunals.
215 Emphasis was also placed in Mr. Temby’s submissions on the question of context. In the context of town planning legislation, matters are commonly done on notice with requirements as to advertising or dissemination of information. In the context of law enforcement, it was observed that questions often arise after the event by reason of the fact that what is done is done covertly, not leaving room for any contemporaneous challenge. The extent of inconvenience arising from the contemporaneous challenge was less than in those cases where there may exist scope for challenging long after the event. In the latter case, it was suggested very considerable inconvenience could arise from a relatively broad categorisation of jurisdictional facts.
216 A finding that the provisions of s.7(1)(b) relate to non-jurisdictional facts does not, of course, in any way diminish their importance in the statutory scheme for controlled operations. Where, as stated by Spigelman, CJ. in Timbarra (supra) at [41] the process of construction leads to the conclusion that Parliament has intended that the primary decision-maker authoritatively determine the existence or non-existence of the fact, then, whether as a rule or law of statutory construction as to the intent of Parliament, or as the application of a rule of the common law to the exercise of a statutory power, a Court with a judicial review jurisdiction will inquire into the reasonableness of the decision by the primary decision-maker (in a Wednesbury sense): Associated Provincial Picture Houses Limited v. Wednesbury Corporation [1948] 1 KB 223, but not itself determine the actual existence or non-existence of the relevant facts.
217 In the required analysis, the approach to be taken is that applied by Spigelman, CJ. in Pallas Newco (supra) by identifying the indicators that are for and those that are against the existence of the claimed jurisdictional fact. Further, in the statutory context of the State Act, it is necessary:-
• As in Pallas Newco (supra) to identify “the position”, s.7(1)(b) occupies in the statutory scheme and whether it operates as a precondition to the very power to grant an authority.
• To determine whether it could be said that the element or matter in s.7(1)(b) operates as a criterion that enlivens the power of the Commissioner to grant an authority or whether it was a condition that qualifies the way in which that power, the existence of which depends upon other criterion, could or could not be exercised.
• To bring to account the objects of the legislation and its evident purpose. An important primary objective of the statute is to facilitate the use of controlled operations as a method in particular investigations for the purpose of obtaining evidence of criminal activity and the other purposes referred to in paragraph [151] above.
218 In applying the above matters to this case and giving full weight to the terms of s.7(1)(b) including its prohibitory terminology, I am of the opinion that that provision is not a gateway criterion in a jurisdictional sense. It is, in other words, not a criterion satisfaction of which enlivens the power of the Commissioner to exercise the discretionary power under s.6 of the Act.
219 As to the “jurisdictional fact question”, I have concluded:-
220 The third question arises from the Notice of Motion filed in Court at the hearing on 2 November 2006. The motion was filed by the second defendant in the proceedings concerning Mr. Gedeon only. Mr. Robinson, in his oral submissions, stated that all of the plaintiffs wished to rely upon the expert evidence and that they all, in the judicial review hearing, also wished to rely on a report entitled “Illicit Drugs Reports”, particularly in respect of the jurisdictional fact issue.
221 Mr. Temby, on behalf of the Crime Commission, contended that there was no necessity for notices of motion to be filed on each of the proceedings raising the third question. The purpose of the notice of motion raising the question in the Gedeon matter was to have the issue determined upon the basis that the answer to the third question would be regarded as an answer for the purpose of the other proceedings. The third question has been dealt with on that basis.
222 The reports of Dr. Louise Degenhardt were admitted and marked as Exhibits C, D and E. In addition, a report entitled “Illicit Drugs Report” was tendered and marked as Exhibit F in the judicial review proceedings.
223 The Crime Commission applied for an order that the Court determine as a separate question whether or not the two reports of Louise Degenhardt dated 1 November 2006 are relevant and admissible in the proceedings on the plaintiffs’ amended summonses.
224 The authorities granted by the first defendant were given in circumstances in which it was anticipated and expected that the cocaine in question would likely not be recovered by the law enforcement officers involved in the controlled operations and therefore the cocaine (or some of it) could ultimately be consumed by either the persons to whom it was sold or other unknown persons.
225 Dr. Degenhardt’s reports essentially state that the consumption of cocaine can seriously endanger the health or safety of a person who consumes it. The question as to the admissibility of her reports, in turn, depends upon the construction of s.7(1)(b) and its application to the facts established on the agreed facts and agreed documents (Exhibit B).
226 In the written submissions on behalf of the Crime Commission dated 1 November 2006, it is asserted that the words of s.7(1)(b) are unambiguous. However, notwithstanding, reference was made to the historical context in which the Act was enacted, including, in particular, the High Court’s decision in Ridgeway (supra). Against the background of that case, it was submitted that the essential point for the purposes of the third question was that the State Act was calculated to allow, amongst other things, law enforcement officers authorised under an authority granted under that Act to engage in the illicit drug trade for the purposes of gathering evidence of drug trafficking offences. It was contended that s.7(1)(b) should accordingly be construed to facilitate that purpose.
227 The Crime Commission contended that in order to attract the prohibition prescribed by s.7(1)(b), the proposed operation must be one which involves conduct that is likely seriously to endanger someone’s health or safety.
228 For that purpose, it was submitted, it is essential that there be a precise identification of the conduct authorised under each authority and to then determine whether or not that conduct was likely seriously to endanger someone’s health or safety.
229 The relevant conduct was said, on behalf of the Crime Commission, to involve, firstly, the supply of cocaine by the law enforcement officer (Mark Standen) to “Tom” and, secondly, by way of specific example, conduct allegedly involving the supply of cocaine by “Tom” to the plaintiff Gedeon. As to the first, it is said that there was no likelihood whatever of any danger to anyone’s health or safety. The supplying of cocaine did not, of itself, endanger health or safety. Had “Tom” thereupon (or later) consumed the cocaine then his conduct (of consumption) may have endangered “Tom’s” health but the authorities did not purport to authorise “Tom” to engage in such unlawful conduct.
230 So far as the alleged supply by “Tom” is concerned, it is said again that there was no likelihood at all that that particular conduct would endanger anyone’s health or safety.
231 A similar argument was put that, had, for example, a person to whom “Tom” supplied cocaine later consumed it, then once again, whilst such consumption may have endangered that person’s health or safety, the authorities in question did not purport to authorise consumption of the cocaine.
232 It was further contended (written submissions, paragraph [10]):-
“The possibility, or even the probability, that some unauthorised, illegal conduct may occur after the completion of the controlled operation does not prevent the granting of an authority and does not attract the operation of s.7(1)(b) …”
233 It was also contended by the defendants that the legislative purpose and the history and the words of s.7(1)(b) could not be taken as indicating Parliament’s intention to give the provisions of that section such a wide meaning as to make Dr. Degenhardt’s reports relevant.
234 Finally, it was argued by the Crime Commission that s.6 required a variety of factors to be taken into account including the consequences of a controlled operation as part of the balancing exercise called for by s.6. Such matters were not relevant, however, to s.7. Accordingly, the evidence in Dr. Degenhardt’s reports could have been relevant if the authorities had in fact authorised a person to consume cocaine but it was emphasised none of the authorities did so.
235 On this basis, the Crime Commission argued, the evidence had no relevance to the prohibition contained in s.7(1)(b). Accordingly it was submitted the evidence being irrelevant, meant that the reports of Dr. Degenhardt were inadmissible.
236 The preliminary point raised on behalf of the plaintiffs was that, as the outcome of the notice of motion is necessarily tied to the outcome of the “jurisdictional fact” question, it is premature to the judicial review hearing and was unnecessary.
237 Mr. Stratton and Mr. Robinson submitted that the construction contended for on behalf of the Crime Commission was “impermissibly narrow”. The plaintiffs, in effect, submitted that the authorities were to be construed as not merely limited to the physical act of “handing over” cocaine to “Tom” and the handing over of that cocaine to a third person for money. It was submitted that the conduct envisaged by the “s.7 prohibition” was significantly wider than that when understood in the context of the powers in the Act and the regulations made under it and from the terms of the six authorities themselves.
238 It was put that, if the defendant’s construction of s.7 were to be accepted, then it would permit law enforcement officers pursuant to a controlled operation authority:_
“… to hand a ticking bomb over to a person or persons known or suspected to be terrorists. Similarly, it would be the equivalent of them handing over a loaded gun to a person they know or suspect to be a killer.”
239 I do not, with respect, see these examples as assisting the construction of s.7(1). Issues such as the physical handing over of a dangerous object could come within s.7(1)(b) if the object, in terms of the danger to which it could give rise, was a self-activating or self-executing one without intervening conduct by third persons. On the other hand, conduct involving the handing over of a loaded gun to a suspected killer in the second example would be a matter requiring careful consideration in the application, not in terms of s.7, but of s.6(3)(c).
240 A further example was advanced in the plaintiffs’ written submissions. It was said that on the defendant’s argument, had “Tom” cut the subject cocaine with a harmful or corrosive substance which could result in death if consumed, would mean that he would be protected. I consider, however, as was argued by Mr. Temby on behalf of the Crime Commission, that in that circumstance the danger to the health or safety of the persons consuming the substance would be properly considered to be the consequence of the unlawful activities of the person who added the harmful ingredient and not to the activity of handing over the cocaine before that occurred.
241 Mr. Robinson further contended that the terms of s.7(1) were unambiguous and that there was support for a broader construction to be given by reference to the second reading speech.
242 Mr. Robinson argued that the release of seven kilograms of cocaine in February/March 2005 where there was no provision whatever in the application or the authority or the operational plan to recover it meant that the plan involved the unrestricted release of the cocaine to members of the general public. Attention was drawn, in this regard, to Dr. Degenhardt’s opinion that such a release of cocaine would be likely to cause harm to “some members of the Australian public”.
243 Dr. Degenhardt, a clinical psychologist and a senior lecturer at the National Drug and Alcohol Research Centre, University of New South Wales, has conducted considerable research examining the use and harm related to the consumption of drugs in Australia. Her Ph.D. qualifications involved research into the associations of drug use problems and mental health problems in Australia.
244 There is, of course, no issue but that Dr. Degenhardt holds the requisite qualifications and experience and therefore, “specialised knowledge” within the meaning of s.79 of the Evidence Act and that the opinions expressed in her reports, Exhibits C and D, are wholly or substantially based on that knowledge. The real question is whether or not those opinions are relevant to the issue under s.7(1)(b).
245 In her report of 31 July 2006, Dr. Degenhardt states that it is “highly likely that harm would be caused to some members of the Australian public by the release of seven kilograms of cocaine onto the ‘market’”.
246 Dr. Degenhardt advances, inter alia, this opinion upon the basis of evidence which suggests that when drug supply is increased, so too does drug usage. She states that the release of seven kilograms onto the Australian market, which had already been removed from circulation by law enforcement operatives, would constitute such an increase in supply and usage. On that basis, Dr. Degenhardt expresses the opinion that the supply is likely to have had “the potential to cause increases in harms for some users” (p.2).
247 The admissibility of Dr. Degenhardt’s reports turns on the provisions of s.55(1) of the Evidence Act 1995 (NSW). That section provides that evidence is relevant in a proceeding if it is evidence which could “… rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceedings”.
248 The expression “a fact in issue”, it may be taken as one which refers to issues in the proceedings, defined by substantive law and the pleading. In determining the application of that expression, not only ultimate issues, but other issues as to facts that are relevant to facts in issue may be considered to be “relevant evidence”. See generally, Smith v. The Queen [2001] 206 CLR 650 at [6] per Gleeson, CJ., Gaudron, Gummow and Hayne, JJ.
249 The evidence of Dr. Degenhardt is sought to be relied upon as proof of the existence of a fact in issue in the proceedings, namely, as proof that the conduct authorised was “… likely to seriously endanger the health or safety …” of a participant or another person. As discussed earlier, that is a matter involving the proper construction of s.7(1)(b).
250 The phrase in s.7(1)(b) “… engaging in conduct that is likely to seriously endanger the health or safety …” is one, in my opinion, that involves the following concepts:-
(a) It is particular “conduct” within the meaning of s.3 of the State Act (which is defined to include any act or omission) to which the section relates.
(b) The conduct must itself be such that it is likely to produce a consequence, namely, to seriously endanger health or safety of persons referred to in the subsection.
(c) Conduct which carries only the potential or possibility of causing serious danger to health or safety depending upon the existence of other independent facts later in time is not conduct within s.7(1)(b). This is particularly so, given the inclusion of the phrase “likely to” in the expression “likely to seriously endanger …”.
251 Dr. Degenhardt’s report (Exhibit D) is principally directed to identifying the potential effects of cocaine usage and related issues such as the availability of cocaine in the Australian market, the epidemiology of cocaine use and the epidemiology of “harms”. Reference, in this latter respect, is referred to research into “the nature and extent of harms related to cocaine use” identifying issues related to cocaine dependency and overdose. The report, Exhibit D, also deals with the symptoms associated with sustained use of the drug as well as toxic reactions to it from short term usage.
252 An examination of the reports establishes that they together address the following:-
(a) The nature of cocaine and its capacity, when ingested, of producing “harms” (including cocaine dependence and overdose).
(b) The relationship between drug supply and drug usage.
(c) Methods of cocaine use – injecting cocaine and intranasal method of administration.
253 The opinion expressed, in essence, is to the effect that, to the extent that seven kilograms of cocaine represents an increase in supply, then it is likely to have the potential to cause an increase in “harms” for some users. This opinion, of course, takes as its premise that the seven kilograms of cocaine supplied (or part thereof) is, after supply, administered or ingested in one or other of the ways referred to in the reports.
254 On the ordinary construction of s.7(1)(b), I am of the opinion that the conduct proscribed by s.7(1)(b) is conduct which in itself, or of its nature, is likely to produce the result or consequence referred to, namely, to seriously endanger health or safety.
255 The construction which the plaintiffs contend for proceeds upon the basis that the mere supply of cocaine is, itself, conduct that is likely to seriously endanger health or safety. I am unable to accept that that is the correct interpretation of the provision. Something more is required than mere supply. If an authority granted under the Act to conduct a controlled operation authorised conduct in the course of an operation which involved the active encouragement or inducement or persuasion of a person to consume a prohibited drug or it involved conduct involving the administration of a prohibited drug, then such conduct, in my opinion, would more than likely fall within the terms of s.7(1)(b).
256 Serious danger to health or safety from a drug such as cocaine results from conduct involving the administration or ingestion of the drug. Whilst the supply of a drug such as cocaine may be a first step in a chain of events that could lead to danger to health and safety, supply alone is insufficient to fall within the terms of s.7(1)(b).
257 I, accordingly, am unable to accept the submission made on behalf of the plaintiffs as to the construction of s.7(1)(b) and that the authorities in question authorised conduct in contravention of that provision.
258 Section 7(1)(b), in my opinion does not in terms address the issue of the potential for the usage and harm resulting. The section addresses a direct relationship between the “conduct” and the concept of causing serious danger to health or safety to participants or any other person. The conduct authorised under the six authorities, as earlier stated, did not involve or envisage both the supply as well as the injecting or administration of the seven kilograms of cocaine or any part thereof.
259 The opinion in the reports, Exhibits C and D, accordingly are based not merely on supply, but are premised upon additional conduct involving the usage of the drugs. The authorities being limited only to the former, Dr. Degenhardt’s opinion goes well beyond the fact in issue (the authorised supply of cocaine) to express an opinion based on drug usage which was not the conduct authorised. On that basis, the opinions expressed in the reports do not, in my opinion, relate to a fact in issue within the meaning of s.55(1) of the Evidence Act and are therefore not relevant to or admissible in the proceedings.
Answers to the separate questions for determination
260 On the basis of the above stated reasons, I answer the questions for separate determination as follows:-
“Q1. Are ss.5 to 20 of the Law Enforcement (Controlled Operations) Act 1997, or any of those section, alone or in combination, ultra vires or invalid by reason of s.109 of the Commonwealth Constitution? (the “constitutional question”).
Q2. Does the jurisdiction of this Court extend to determining whether or not any conduct proposed to be authorised (or that was authorised) pursuant to s.6(1)(a) of the Law Enforcement (Controlled Operations) Act 1997 is (or was) likely to seriously endanger the health or safety of any participant or any other person, or to result in serious loss or damage to property, within the meaning of s.7(1)(b) of that Act? (the “jurisdictional fact question”).
Q3. Is the report of Louisa Degenhardt (undated), being part of Annexure C to the affidavit of Stephen Dack sworn 18 August 2006, relevant to, and admissible in, the proceedings upon the Summons?
Q.4 Is the report of Louisa Degenhardt (dated 31 July 2006), being part of Annexure AC to the affidavit of Stephen Dack sworn 18 August 2006, relevant to and admissible in, the proceedings upon the Summons?
Orders
261 The provisions of Part 28, Division 2 – Separation of Questions of the Uniform Civil Procedure Rules 2005, in particular, those in Part 28.4 allow for the making of orders or the granting of other relief consequent upon a decision of a question under that Division.
262 The questions posed for separate determination having been answered above, it remains to consider the nature of any other order the nature of the case requires in accordance with the provisions of Part 28 Rule 3(b).
263 The questions as answered substantially disposes of those parts of the proceedings in which the plaintiffs claim declaratory relief as set out in paragraphs [1] and [3] of the amended summonses and the grounds relating thereto.
264 The orders otherwise sought in the amended summonses rely upon additional grounds including those set out in paragraph [2(e)] thereof.
265 On 21 November 2006, leave was granted to the plaintiff Dowe to file a Notice of Motion dated 21 November 2006 in which leave was sought to further amend the Amended Summons in terms of a document entitled “Second Further Amended Summons”. That document seeks to raise, inter alia, additional grounds of substantive and procedural ultra vires (paragraphs (ca) and (cb)). The notice of motion was stood over pending the determination of the separate questions.
266 The appropriate order in the circumstances is to re-list the proceedings for the purpose of:-
(a) Enabling the parties to consider the judgment and to apply for any orders under Part 28 Rule 4(2).
(b) Issuing further directions.
267 The proceedings are, accordingly, to be re-listed on Thursday 14 December 2006 at 9.45 am.
(f) Plaintiff’s summary submissions on the “third question”
(g) Submissions for the New South Wales Crime Commission (in relation to the two reports of Louisa Degenhardt) dated 1 November 2006.
(h) Plaintiff’s summary submissions on the “third question” dated 30 November 2006.
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