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- 39 - THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40178/07
CA 40185/07
SPIGELMAN CJ
BASTEN JA
HANDLEY AJA
Friday 19 October 2007
David Darley DOWE v THE COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR
Gilbert GEDEON v THE COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION & ANOR
Judgment
1 SPIGELMAN CJ: Each Claimant faces prosecution for an offence under s25(2) of the Drug Misuse and Trafficking Act 1985 for knowingly taking part in the supply of a commercial quantity of a prohibited drug, namely cocaine. The conduct of each Claimant occurred in the context of controlled operations for the supply of the drug by the New South Wales Crime Commission.
2 Each Claimant instituted proceedings in this Court challenging the validity of the controlled operation authorities issued pursuant to the Law Enforcement (Controlled Operations) Act 1997 (“the LECO Act”). Justice Hall separated and answered certain questions and the Claimants appeal from his Honour’s judgments and answers. (See Dowe & Ors v Commissioner of the New South Wales Crime Commission & Anor (2006) 206 FLR 1; [2006] NSWSC 1312 and Dowe v Commissioner of New South Wales Crime Commissioner & Anor; Gedeon v Commissioner of New South Wales Crime Commission & Anor (2007) 169 A Crim R 43; [2007] NSWSC 166.)
3 Each Claimant challenges the validity of the controlled operation authorities issued pursuant to s7(1)(b) of the LECO Act. The validity of the authorities will be of significance in the future criminal trial, particularly with respect to the application of evidence at that trial of the judgment called for by s138 of the Evidence Act 1995 with respect to improperly or illegally obtained evidence.
4 Before Hall J the validity of the authorities was also challenged on the basis of alleged inconsistency with Commonwealth laws. That challenge was abandoned in this Court.
5 The issues raised by the Claimants are issues of substance and of potential significance to their criminal trials. Leave to appeal should be granted.
6 The following issues arise on the appeals:
(i) The effect on the validity of the authorities of the failure to obtain a certificate under the parallel Commonwealth provision for controlled operations in Pt 1AB of the Crimes Act 1914 (Cth).
(ii) Whether a particular stipulation with respect to the health effects of conduct in the execution of an authority under the State legislative scheme was a jurisdictional fact, which the Court had to decide and, accordingly, whether evidence on that matter was admissible.
(iii) Whether his Honour misconstrued the stipulation with respect to health effects and, if so, whether the decision to issue the authorities was irrational and/or unreasonable in the sense required for judicial review.
The Legislative Scheme
7 The LECO Act makes provision for controlled operation applications (s5), determination of an application (s6), the form of authority (s8), the duration of an authority (s9), the variation of an authority (s10), the cancellation of an authority (s12), the effect of the authority (s13), defects in an authority (s13A) and the lawfulness of controlled activities and ancillary activities (ss16, 17 and 18). The Act also expressly provides that certain activities cannot be authorised under the Act (s7).
8 The sections of particular relevance for present purposes as at the relevant time are:
3. Definitions
“authorised operation means a controlled operation for which an authority is in force and, in Parts 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.
controlled activity means an activity that, but for section 16, would be unlawful.
controlled operation means an operation 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.
5(1) A law enforcement officer for a law enforcement agency may apply to the chief executive officer of the agency for authority to conduct a controlled operation on behalf of the agency.
5(2A) In any application, whether formal or urgent, the applicant must provide the following particulars:
(a) a plan of the proposed operation,
(b) the nature of the criminal activity or corrupt conduct in respect of which the proposed operation is to be conducted,
(c) the nature of the controlled activity in respect of which an authority is sought,
(d) a statement of whether or not the proposed operation, or any other controlled operation with respect to the same criminal activity or corrupt conduct, has been the subject of an earlier application for an authority or variation of an authority and, if so, whether or not the authority was given or variation granted.
5(3) The chief executive officer may require the applicant to furnish such additional information concerning the proposed controlled operation as is necessary for the chief executive officer’s proper consideration of the application.
6(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(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.
12(1) An authority for a controlled operation may be cancelled by the chief executive officer, by order in writing, at any time and for any reason.
(2) Cancellation of an authority for a controlled operation takes effect at the time the order is made or at such later time as may be specified in the order.
(3) It is a sufficient defence to criminal or disciplinary proceedings arising from conduct that has been engaged in by the defendant in reliance on an authority that has been cancelled if the defendant satisfies the court or tribunal before which the proceedings are being heard:
(a) that the defendant engaged in the conduct in good faith for the purposes of, and in the course of, a controlled operation for which the authority had been in force, and
(b) that, had the authority been in force when the defendant engaged in the conduct, the conduct would have been lawful by operation of section 16, and
(c) that the defendant was unaware, and could not reasonably be expected to have been aware, that the authority had been cancelled.
13 While it has effect, an authority for a controlled operation:
(a) authorises each law enforcement participant to engage in the controlled activities specified in the authority in respect of the law enforcement participants, and
(b) authorises each civilian participant (if any) to engage in the particular controlled activities (if any) specified in the authority in respect of that participant.
13A An application for an authority or variation of authority, and any authority or variation of authority granted on the basis of such an application, is not invalidated by any procedural defect, other than a defect that affects the substance of the application, authority or variation in a material particular.
14(1) Aparticipant in an authorised operation who engages in unlawful conduct for the purpose of protecting that or any other participant, or any other person, from death or serious injury may, within 24 hours after engaging in that conduct, apply to the chief executive officer for retrospective authority for the conduct.
16 Despite any other Act or law, an activity that is engaged in by a participant in an authorised operation in the course of, and for the purposes of, the operation is not unlawful, and does not constitute an offence or corrupt conduct, so long as it is authorised by, and is engaged in in accordance with, the authority for the operation.
17(1) Despite any other Act or law, the following activities:
(a) the preparation of any false documentation (such as the preparation of a driver licence, credit card or identity card under an assumed name) in accordance with a request by the chief executive officer of a law enforcement agency,
(b) the inclusion of any false information in any record or register (such as that relevant to the issue of a driver licence, credit card or identity card under an assumed name) in accordance with a request by the chief executive officer of a law enforcement agency,
(c) the use of such documentation or information by any person in the course of, and for the purposes of, an authorised operation conducted on behalf of a law enforcement agency,
are not unlawful, and do not constitute offences or corrupt conduct, so long as the documentation or information is the subject of a certificate, signed by the chief executive officer of the agency, to the effect that the documentation or information is to be used for the purposes of this Act.
(2) Subsection (1) does not render lawful the preparation of false documentation, the inclusion of false information in any record or register or the use of such documentation or information in relation to matters of the kind recorded or registered under the Births, Deaths and Marriages Registration Act 1995.
18(2) This section applies to an activity that (but for this section) would be unlawful because (ignoring the operation of sections 16 and 17) the activity in connection with which it is engaged in is unlawful (such as an activity that would otherwise give rise to the offence of aiding and abetting the commission of an offence or of conspiring to commit an offence), and does not apply to any other activity.
(a) must inspect the records of each law enforcement agency at least once every 12 months, and
(b) may inspect the records of any law enforcement agency at any time,
for the purpose of ascertaining whether or not the requirements of this Act are being complied with.
(3) The Ombudsman may, at any time, make a special report to the Presiding Officer of each House of Parliament with respect to any inspection conducted under this section.
23(1) The Ombudsman must, as soon as practicable after 30 June in each year, prepare a report of the Ombudsman’s work and activities under this Act for the preceding 12 months and furnish the report to the Presiding Officer of each House of Parliament.
24(1) A report prepared under this Part must not include any information that, if made public, could reasonably be expected:
(a) to endanger the health or safety of any person, or
(b) to disclose the methodology used in any investigation (whether or not an authorised operation) that is being, has been or is proposed to be conducted by any law enforcement agency, or
(c) to prejudice any investigation (whether or not an authorised operation) that is being or is proposed to be conducted by a law enforcement agency, or
(d) to prejudice any legal proceedings arising from any such investigation.”
The Background Facts
9 Both cases proceeded before Hall J on the basis of an agreed statement of facts. It is sufficient to note the relevant facts in summary form:
· On 8 October 2004, approximately ten kilograms of cocaine were unlawfully imported into Australia. Neither of the Claimants was involved in, or aware of, the importation at the time it occurred.
· A person codenamed “Tom” had the primary role of selling the cocaine and took possession of it. Tom subsequently became registered as a Commission informer. A joint taskforce of New South Wales Police and the Federal Police was established and the Crime Commission investigated information provided by Tom.
· The law enforcement officers involved discussed the potential sale of up to 7 kilograms of the cocaine through the informer “Tom” and it is a fact of significance that this occurred in a context in which “Tom” had advised the authorities of two planned importations of significantly larger quantities of cocaine proposed for February 2005.
· The law enforcement officers approved in principle the supply by “Tom” of up to 7 kilograms of cocaine in circumstances in which it was unlikely that the cocaine would be recovered by law enforcement officers.
· Six authorities were purportedly granted pursuant to s6 of the LECO Act by the Commissioner of the New South Wales Crime Commission for the conduct of six controlled operations. The authorities were granted on 8 February, 22 February, 24 February, 25 February, 4 March and 17 March 2005. The amount of cocaine to be supplied pursuant to each of these six authorities was, respectively, 2 kilograms, 1 kilogram, 250 grams, 1 kilogram, 1 kilogram and 750 grams being a total of 6 kilograms.
· The authorities of 8 February and 17 March are relevant to the case against the Claimant Gedeon. The authority of 22 February is relevant to the case against the Claimant Dowe.
· On each of the occasions on which Tom supplied cocaine as part of the controlled operations, he was visually observed by law enforcement officers.
10 Provision is made in Pt 1AB of the Crimes Act 1914 (Cth) for the authorisation of controlled operations for obtaining evidence about Commonwealth offences. It was common ground that no authority for a controlled operation under the Commonwealth legislative scheme had been obtained. The Opponents can only rely on the State authorities and the exempting force of the State LECO Act.
11 It is now common ground that the Parliament of New South Wales did not purport to impinge in any way on the operation of a Commonwealth law and the LECO Act, specifically the protection under s16 of that Act, was not intended to apply to any Commonwealth offence.
The Commonwealth Legislative Scheme
12 Section 233B of the Customs Act 1901 (Cth) provides:
“(1) A person commits an offence if:
(v) conveys goods that have been imported into Australia in contravention of this Act; or
(vi) possesses goods that are reasonably suspected of having been imported into Australia in contravention of this Act;
(1AAB) Subparagraph 1(a) … (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.”
13 The submissions in this Court proceeded on the basis that the activity of handing over the cocaine during the controlled operation may be a contravention of one or other of s233B(1)(a)(v) or (vi). What the position of the Crown will be in the prosecutions, when the trial judge is asked to rule on the legality of this conduct for purposes of formulating the judgment in s138 of the Evidence Act 1995 was not the subject of any submission in this Court.
14 The submissions in this Court focused on the provisions of Pt 1AB entitled “Controlled Operations for Obtaining Evidence about Commonwealth Offences” of the Crimes Act 1914 (Cth). This scheme for controlled operations, like the parallel provisions in the LECO Act, was enacted as a result of the judgment of the High Court in Ridgeway v The Queen (1995) 184 CLR 19.
15 The Commonwealth Act makes express provision for the joint operation of the Commonwealth and State provisions for controlled operations as follows:
“15GA It is the Parliament’s intention that a law of the State or Territory should be able to operate concurrently with this Part unless the law is directly inconsistent with this Part.”
16 Part 1AB makes provision for the conduct of controlled operations pursuant to an application by an Australian law enforcement officer for a certificate authorising such an operation in accordance with the detailed requirements of the Commonwealth scheme. As I have indicated above there was no such certificate given in the present case. The law enforcement officers involved relied, and relied only, upon the authority under the State LECO Act.
17 The Claimant Gedeon’s submission adopted by the Claimant Dowe concentrates on the definition in the LECO Act of “controlled activity” which to repeat, is defined to mean “an activity that, but for section 16, would be unlawful”.
18 Although Mr M Leeming SC, who appeared for Mr Gedeon, accepted that a State Act could not directly immunise anyone from a Commonwealth offence, he submitted that where there is such an offence it was necessary to obtain a certificate under the Commonwealth regime “in order that section 16 is able to render lawful that which was unlawful”. His next step was to refer to the definition of “controlled operation” which, in its concluding words, requires there to be an operation that “involves or may involve a controlled activity”. He submits that there was no controlled activity, therefore, no controlled operation and, therefore, no valid authority pursuant to Pt 2 of the LECO Act.
19 This submission is based on the proposition that the word “unlawful” in the definition of “controlled activity” should be interpreted to encompass unlawfulness under Commonwealth law. In my opinion, there is no basis for such an interpretation.
20 The reference within the definition of “controlled activity” to “but for section 16” indicates clearly that the extent of the lawfulness to which the definition relates is intended to be coextensive with the excusing function of s16. In both respects the Parliament of New South Wales was concerned, and concerned only, with unlawfulness under State law. It could not and did not purport to impinge in any manner upon conduct that was unlawful under Commonwealth law. Section 16 of the LECO Act could not, as a matter of State legislative competence, of which the draftsman of the LECO Act would have been well aware, extend to rendering lawful conduct in breach of Commonwealth legislation. Accordingly, the definition of controlled activity did not encompass activity that would be unlawful under a Commonwealth law.
21 It is not necessary to rely on it, but this conclusion is reinforced by invoking s12 of the Interpretation Act 1987 which provides in s12(1)(b) that “a reference to a … matter … is a reference to such a … matter … in and of New South Wales”. The relevant “matter” being the ‘unlawfulness’ of “activity” is a reference to unlawfulness “in and of New South Wales” and does not extend to unlawfulness under Commonwealth law.
The Jurisdictional Fact Issue
22 Of central significance for the administrative law challenge to the validity of the controlled operation authorities, both with respect to the jurisdictional fact issue and also the Wednesbury unreasonableness issue to be considered in the next section of this judgment, is the express requirement in s7(1)(b) of the LECO Act that an authority “must not be granted” if the proposed operation involves a person “engaging in conduct that is likely to seriously endanger the health or safety” of participants or any other persons. The factual basis for the submission in each respect arises from the proposition that it was expressly known in advance that a substantial proportion of the cocaine to be supplied on each of the six occasions would never be recovered. In the event, in accordance with that expectation, some 1 kilogram of the 6 kilograms supplied in the six separate operations, was in fact recovered. This was the essential factual substratum of the submissions made on behalf of the Claimants and was not disputed.
23 The Claimants contend that the question posed by s7(1)(b) of the LECO Act with respect to whether or not any authorised conduct was “likely to seriously endanger the health or safety” of persons is a jurisdictional fact in the sense that it is a matter for the Court, on the evidence before it, to determine that question.
24 In his Judgment in Dowe & Ors v Commissioner of the NSW Crime Commission & Anor (2006) 206 FLR 1, Justice Hall set out in detail the provisions of the legislative scheme relevant to determining this question. His Honour also referred to relevant authority including Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135; Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55; Woolworths Limited v Pallas Newco Pty Limited (2004) 61 NSWLR 707.
25 In the course of his Honour’s analysis of the jurisdictional fact issue he said:
“[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.”
26 His Honour then proceeded to analyse s7(1)(a) and then s7(1)(b). His Honour concluded:
“[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.”
27 His Honour finally concluded:
“[219] As to the ‘jurisdictional fact question’, I have concluded:-
(a) The State Act specifies the essential prerequisites to the making of an application for a controlled operation authority in s.5 and the matters upon which a chief executive must be satisfied in terms of s.6.
(b) Although s.7 is not expressed by reference to the chief executive’s state of mind in terms of his or her ‘satisfaction’ or ‘opinion’, both s.7(1)(a) and s.7(1)(b) plainly require expert assessment and judgments to be made.
(c) On the particular question as to whether a proposed operation would or would not require a participant to engage in conduct that is likely to seriously endanger the health or safety of that participant, that is a matter that requires a close and detailed analysis of the particular facts of the proposal that are potentially productive of risk.
(d) The judgment on the matters referred to in s.7(1)(b) cannot be performed other than as an intrinsic part of the process of evaluation of an application for a controlled operation authority. In particular, the matter referred to in s.7(1)(b) can only be considered and determined in the light of s.6(3)(c) matters – the nature and extent of the proposed controlled activities.
(e) The fact that s.7(1)(b) is not framed in terms of the ‘satisfaction’ of the chief executive officer and the prohibitory terms of the section are matters, in my opinion, that are outweighed by those identified above which, in my opinion, plainly establish s.7(1)(b) as related to matters that are not jurisdictional in nature.
(f) Section 7(1)(b) does not, for reasons stated above, constitute a jurisdictional fact.”
28 The principal thrust of the submissions on the part of the Claimants on the jurisdictional fact issue turns on the text of s7, in particular the strength of the language of s7(1)(b), i.e. “must not be granted”. Furthermore, the emphasis on the objective nature of the provision of s7(1) is quite express in the case of par (a), in the reference to “could not reasonably be expected to”. It is also implicit in the formulation in par (b), i.e. “seriously endanger the health or safety …”. The objective nature of the terminology is in marked contrast with other provisions of the legislative scheme which make express provision for the relevant officer being “satisfied” of certain matters, for example s6(3) and s6(4) as well as s7(2) and s7(3)(a).
29 Furthermore, attention is drawn to s13A which is concerned with the validity of an authority and clearly distinguishes between procedural defects and defects that affect the “substance of the … authority … in a material particular”. The Claimants rely on s13A for its implicit suggestion that defects that do affect the substance of the authority have the consequence of invalidity.
30 The process of statutory interpretation which may lead to the conclusion that a particular factual reference constitutes a jurisdictional fact has two elements which it is often appropriate to consider separately: “essentiality” and “objectivity”. (See Timbarra supra at [38]-[39].) In the present case the element of “essentiality” is plainly made out. The language employed, i.e. “must not be granted”, is emphatic. Furthermore, there is a clear contrast between this emphatic language and surrounding sections which are explicit in terms of the use of the words “may” or “may not” and which invoke the language of ‘satisfaction’ on the part of a decision-maker.
31 That, however, is not sufficient to conclude that the interpretation of the essential pre-condition is a matter that must exist in the objective sense, so that its existence or non-existence may be determined, after the event, in the course of litigation challenging the decision-making process.
32 In my opinion, the pre-condition in s7(1)(b) operates as an emphatic instruction to the decision-maker but it is not a jurisdictional fact of a character which must exist in truth, and may be determined by a court on the basis of evidence adduced to the court but which was never before the decision-maker. This, in my view, is the correct interpretation on the basis of the scope and purpose of the legislative scheme considered as a whole.
33 The starting point must be s6(1)(a) which empowers the chief executive officer to authorise a controlled operation which, relevantly, may constitute a contravention of the law. I have set out above a number of provisions which indicate a detailed regulatory scheme both for the particular decision-making process and also for accountability after the decision is made. I refer particularly to the provisions for an Ombudsman’s review. This indicates that Parliament has paid attention to the regulation of the conduct to be permitted, being conduct which involves contravention of the criminal law in the course of investigation of criminal offences. I do not believe that there is any scope for judicial intervention on an ex post facto basis with respect to the mandatory provisions of s7(1). Those provisions operate as a directive to the chief executive officer and confine the power conferred upon him or her by s6(1)(a). They do not operate by way of a pre-condition to the exercise of the power.
34 The most important reason for this interpretation being preferred, notwithstanding the textual matters to which the Claimants direct attention, is the effect upon law enforcement officers of any level of uncertainty with respect to an authority which they execute. Such officers must be able to rely on the protection given to them by s16 from prosecution for any State criminal offence, and the similar protection given to them by s18 with respect to ancillary activities and the protection from civil liability for such conduct.
35 The general purpose and object of this scheme, reflected in the definition of “controlled operation” in s3, is to facilitate the course of criminal investigation. It is inconsistent with that purpose to expose law enforcement officers to criminal liability on the basis of factual findings in subsequent court proceedings, which findings may take into account evidence that was not before the primary decision-maker.
36 My conclusion is reinforced by the requirements for the provision of information, either with an application pursuant to s5(2A) or pursuant to a request for additional information by the chief executive officer pursuant to s5(3). Information to be supplied to the chief executive officer under these sections could encompass matters which, relevantly, enable the decision-maker to determine whether or not the prohibition in s7(1)(b) applies in the circumstances of the particular case. It would be quite invidious for such a process of decision-making, each step of which the legislature has expressly detailed, including the mechanisms of review of the relevant material by means of an Ombudsman report, to be subject to re-opening and redetermination on the basis of evidence adduced in court, being evidence which was never before the primary decision-maker.
37 This basis for appeal should be rejected.
38 In Dowe & Ors v Commissioner of the NSW Crime Commission & Anor (2006) 206 FLR 1, the Claimants sought to rely before Hall J on reports by Dr Louise Degenhardt in order to establish that the consumption of cocaine can seriously endanger the health and safety of persons who consume it. This was a matter which his Honour determined on the basis of the interpretation of s7(1)(b).
39 The matter arose before his Honour on a Notice of Motion by the Opponents seeking determination of the admissibility of the evidence. As the written submissions for the Claimant Dowe to Hall J stated, this matter was necessarily related to the decision on the jurisdictional fact issue.
40 It was not suggested that the evidence should be admitted for purposes of determining the irrationality/unreasonableness ground of review.
41 On the basis of my conclusion that s7(1) did not involve a jurisdictional fact, the evidence was not admissible.
The Irrationality Unreasonableness Issue
42 The other basis of challenge to the validity of the controlled operation authorities turns on the proposition that the decision to issue the authorities was either irrational or so unreasonable that no reasonable administrator could have reached that conclusion. This demanding test, in the latter respect often referred to as Wednesbury unreasonableness, would, if established, provide a basis for judicial review and the issue of orders in the nature of prerogative writs setting aside the authorities or, alternatively, a declaration of invalidity.
43 The Claimants express this ground in two alternative formulations because there is authority to suggest that “unreasonableness” is a term applicable to the exercise of a discretionary power and that the “irrationality” formulation is applicable in other contexts, such as the finding or judgment implicit in s7(1)(b). (See Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at [39]-[52], [122]-[127]; Re Minister for Immigration and Multicultural Affairs; ex parte Applicant S20/2002 (2003) 77 ALJR 1165 at [9], [20], [37], [52], [67]-[68]; Minister for Immigration and Multicultural Affairs v SGLB (2004) 78 ALJR 992 at [38].)
44 These cases have given rise to considerable debate into which it is unnecessary to delve. Judicial review of irrationality is only available if a high threshold or unreasonableness appears with pellucid clarity.
45 Two issues arise in this regard. First, whether the word “conduct” in s7 of the LECO Act is to be narrowly interpreted so as to refer only to the act of handing over the cocaine, without reference to the subsequent use of the cocaine. Subject to the answer to the first issue, the second issue that may arise is whether the demanding test of irrationality or unreasonableness is met in the particular circumstances of this case.
46 His Honour made findings in accordance with the uncontested evidence that, at the time the relevant authorities were issued, the decision-maker acted on the basis that the cumulative effect of all of the controlled operations would be that up to 7 kilograms of cocaine would be supplied and that it was unlikely that the cocaine would be recovered by law enforcement officers.
47 With respect to the issue of interpretation his Honour analysed s7(1) and said ((2007) 169 A Crim R 43):
“[60] In the construction and operation of this provision, I am of the opinion that the following are relevant matters:
(a) The provision is expressed in negative terms (‘ … must not be granted …’) in relation to specified activities or conduct set out in s.7(1)(a) and (b). It is, accordingly, a statutory prohibition to be construed in a way which gives effect to the evident legislative purpose behind its enactment.
(b) In ascertaining the meaning and intended operation of s.7(1)(b) (the phrase ‘engaging in conduct that is likely to seriously endanger the health or safety …’), it is important to observe that ‘conduct’ (which includes any act or omission: s.3, Definitions) refers to conduct or activities that can be said to be causative in the sense indicated by the particular words in the section.
(c) The initial step, accordingly, is to identify what are the various acts (or in some cases the omissions or both) that constituted the ‘conduct’ in a particular case for the purposes of s.7(1)(b).
(d) The relevant acts or omissions, having been identified, it then becomes necessary to determine whether the ‘conduct’ is of a nature, kind or quality that is ; … likely to seriously endanger the health or safety’ of the specified person or persons (where the issue is one of health or safety as distinct from damage to property).
(e) This last-mentioned aspect is not concerned with mere risk arising from ‘conduct’. It is directed to whether or not the relevant authorised ‘conduct’ is ‘likely to’ produce the stated harmful consequence. In this respect, it is clear that ‘the conduct’ must be assessed objectively in order to determine whether it has the requisite causative character.”
His Honour added:
“[63] In determining the question whether the conduct authorised by the authorities that are in question in these proceedings could be said objectively to be conduct that is ‘likely to seriously endanger the health or safety’ of specified persons, the answer depends upon whether the sale and the supply of the cocaine (being the relevant authorised ‘conduct’) constituted acts or activities that, in themselves, were likely to produce the stated consequence. Arriving at the answer to this question in a particular case may be aided by applying one or both of two tests well known to the criminal law, the natural consequence test and the reasonable foresight of consequence test.”
48 Furthermore, his Honour said:
“[68] Whether one applies what has been referred to above as the natural consequence test or whether one simply applies an objective test to the phrase ‘likely to seriously endanger the health or safety of specified persons’ the prohibition in s.7(1)(b) will only apply where it can be said that the authorised activities themselves are likely to result in or produce the deleterious consequences referred to in that provision. If harm to health and safety is dependent upon and will only arise through the separate voluntary act or acts on the part of a third person as by ingesting cocaine in quantities that can produce that result, then it cannot, in my opinion, be said the authorised activities of selling and supplying cocaine in themselves contravened s.7(1)(b).
[69] ‘Likely to endanger’ is not to be equated with or embrace mere risk or even material risk. See, for example, Aqua Vital Australia Limited v. Swan Television (1995) WASC (Wallwork, J.) BC 9503674 at 5. That phrase does not have the same meaning as ‘a risk to’. In its statutory context, ‘endanger’ carries the dictionary meaning ‘cause the danger of, make probable, (something untoward)’: Shorter Oxford English Dictionary, Volume 1, p.823. The phrase involves the notion of direct causation. The law in many areas has distinguished between events or circumstances that are conducive to or that facilitate an event from circumstances that can be said to be the cause of them. One person’s act may not be the cause of an event even though it was an essential condition of it: March v. Stramere (1990-1991) 171 CLR 506, 517 per Mason, CJ.
[70] Controlled operations may, depending upon circumstances, involve a risk to the health and safety of specified persons. But s.7(1)(b) is not, as I have indicated, directed to risk per se. The information provided in an application made under s.5 of the Act, including, in particular, that in the plan of the proposed operation, and any other relevant information known to the chief executive officer must be examined so as to ensure that the particular conduct (the acts and/or omissions) proposed for a controlled operation will not, inter alia, be likely to seriously endanger the health or safety of the specified persons.”
49 If the subsequent distribution to end users of the cocaine fell within the scope of the prohibited “conduct” in which a participant would engage pursuant to an authority, within the meaning of s7(1)(b), it was not, and could not be, contended that the health of those users was not ‘seriously endangered’. The only issue was whether his Honour was correct to confine the scope of the conduct so that it did not so extend.
50 The key textual indicator is the identification of the persons upon whom the effect is to occur. Section 7(1)(b) expresses that element by first referring to the particular “participant” who engaged in the conduct so that it should read “that participant or any other participant or any other person”. If the reference to “any other person” were to be held to apply to others far removed from the occasion or place at which the authorised conduct is to take place, then those words would have a qualitatively different operation to its application to the “participants”. Nothing in the text indicates any such distinction.
51 Furthermore, such an extended application would require the decision-maker to engage in a consideration of the consequential effects of any authorised conduct. Whilst such effects may be clear in the case of distribution of prohibited drugs, that will not be the case in many other situations. For example, on the Claimants’ contention, the decision-maker would be obliged to consider how criminals would escape from the crime scene and whether it is likely that someone will be injured along the escape route.
52 The object and purpose of the Act, identified in the s3 definition of “controlled operation”, would not be served by requiring the decision-maker to engage in speculation of this character. It is not required by the text.
53 In my opinion, the Act is not concerned with subsequent consequences. One of the basic mechanisms, for which the legislative scheme was designed, was to enable a criminal to incriminate his co-offenders. It is notorious that this can lead to retaliation by other criminals, even by those not associated with those incriminated, for example in the prison environment. Notwithstanding the ability to offer protection, for example by providing a new identity or ensuring segregation in prison, it could almost always be said that the participation in a controlled operation by a criminal associate would be “likely to seriously endanger the health or safety” of that person. Extending s7(1)(b) to such consequential effects would significantly compromise the attainment of the purposes of the legislative scheme as an aid to effective law enforcement.
54 The words “any other person” should be read ejusdem generis with the reference to “participants” in the controlled operation so as to be confined to persons proximate to, that is, in the physical vicinity of, the operation upon whom the authorised conduct directly impinges.
55 This basis for the appeal should be dismissed.
56 The Claimants have raised substantial issues and it is appropriate to grant leave to appeal.
57 The orders I propose are, in each case:
1 Grant leave to appeal.
2 Direct each Claimant to file a Notice of Appeal within 14 days.
3 Upon the filing of the Notice of Appeal, each appeal is dismissed.
4 The Claimant to pay the Respondents’ costs of each proceeding.
58 BASTEN JA: These proceedings, commenced in the Common Law Division, challenged the validity of authorities issued pursuant to the Law Enforcement (Controlled Operations) Act 1997 (NSW) (“the LECO Act”), as explained by the Chief Justice at [1]-[3] above. The proceedings raise an issue relevant to the conduct of forthcoming criminal trials involving the claimants. No doubt it was both convenient and desirable to resolve the question of the validity of the authorities as a preliminary matter. Nevertheless, that could have been done by way of collateral review by the trial judge: see Love v Attorney-General (NSW) (1990) 169 CLR 307; Ousley v The Queen (1997) 192 CLR 69; Criminal Procedure Act 1986 (NSW), s 130. One difficulty in relation to the present proceedings is that if the authorities were invalid, with the result that evidence tendered at the criminal trial or trials may have been improperly or unlawfully obtained, separate consideration will need to be given by the trial judge as to the gravity of the impropriety or contravention, and whether it was deliberate or reckless: see Evidence Act 1995 (NSW), s 138(3). There is a risk of some duplication and even possible doubt as to what precisely may have been determined in the earlier proceedings and on what basis. Further, there is, in form if not in substance, a disparity between the parties: the defendants in the present proceedings are the Commissioner for the New South Wales Commission and the Commission itself, whereas the other party in the criminal proceedings will be the Director of Public Prosecutions. Nevertheless, the proceedings having reached the present stage, I agree with the Chief Justice that there should be grant of leave to appeal so that the issues raised can be addressed.
Whether a “controlled activity”
59 The authority sought from the Commissioner was “to conduct a controlled operation” on behalf of the Commission: see s 5(1). A “controlled operation” is an operation that “involves, or may involve, a controlled activity”: s 3. The phrase “controlled activity” is also defined and means “an activity that, but for section 16, would be unlawful”.
60 The effect of s 16 (set out at [8] above) is to remove from any statutory or other prohibition an activity undertaken in the course of an authorised operation. It would thus render lawful the possession of prohibited drugs by any participant in the operation acting in accordance with the authority. It would not, however, affect any liability arising under Commonwealth law. So much was common ground. The parties differed, however, as to the scope of the unlawfulness referred to in the definition of controlled activity. On one view, the definition only referred to that which would, but for s 16, be unlawful under State law. On that view, the lawfulness or otherwise of the conduct under Commonwealth law would be irrelevant. The alternative construction, proposed by the claimants, was that the activity referred to was limited to one which would be unlawful only under State law and would be immunised by s 16 in relation to State unlawfulness. On the latter view, the definition of controlled activity in the LECO Act would not be satisfied in relation to conduct which was unlawful under Commonwealth law unless there were a certificate authorising the controlled operation in force under s 15M of the Crimes Act 1914 (Cth), being the Commonwealth equivalent to s 6 of the LECO Act.
61 In my view the claimants’ construction is to be preferred.
62 Commonwealth and State legislation may render unlawful the same conduct and each will be valid unless the Commonwealth statute demonstrates an intention to cover the subject matter and provide the exclusive law in the field. So long as the Commonwealth law was intended to be “supplementary to or cumulative upon” the State law no inconsistency would arise: see Ex parte McLean (1930) 43 CLR 472 at 483 (Dixon J). Possession of prohibited drugs which have been imported into Australia in contravention of the Customs Act 1901 (Cth) will also involve a contravention of the State Drug Misuse and Trafficking Act. In such circumstances, it is implausible that the State would seek not only to permit, but, where an authority is granted, require, its law enforcement officers to act in contravention of a Commonwealth law. It cannot immunise them from such unlawful activity and cannot intend deliberately to expose them to civil and criminal liability. The definition of “controlled activity” should thus be construed to mean ‘an activity that, but for section 16, would be unlawful, but would be rendered lawful by the operation of section 16, when engaged’. In other words, the definition implicitly embraces the effect of s 16, which is to render the activity lawful. If, because of a Commonwealth law, s 16 does not have that effect, and the activity remains unlawful, the definition of “controlled activity” is not engaged. It follows, to the extent that authority is purportedly given for a controlled operation that involves or may involve a controlled activity, the authority will be invalid.
63 The grant of a certificate under s 15M of the Crimes Act 1914 is not, however, the only mechanism for avoiding conduct which is in contravention of the Customs Act. The importation in question occurred after the commencement on 28 September 2004 of s 233B in the form set out at [12] above, as introduced by the Crimes Legislation Amendment (Telecommunications Offences and Other Measures) Act (No. 2) 2004 (Cth), Schedule 5 [3]. Possession of a prohibited import was an offence pursuant to sub-s (1)(a)(iv) of s 233B. However, that subparagraph “does not apply if the person proves that the person had a reasonable excuse for doing the act referred to in that subparagraph”: sub-s (1AAB). Accordingly, the conduct of the participants in the proposed controlled activity would not be unlawful under the Customs Act if each had a “reasonable excuse” for possessing the drug, for the purposes of that provision.
64 In the present case, the only basis for claiming a reasonable excuse was the authority granted under the LECO Act. While the authority could not have effect, pursuant to State law, to immunise conduct in contravention of the Commonwealth law, it could have that effect if the Commonwealth law in question gave it that effect. However, the claimants contended that “reasonable excuse” referred to factual circumstances and not to legal authority obtained under a different law.
65 Limited assistance is to be obtained from authorities considering the scope of the phrase “reasonable excuse” in other statutory contexts. Thus reference was made in the judgment below to remarks in He Kaw Teh v The Queen (1985) 157 CLR 523 at 539 (Gibbs CJ) and 588-589 (Brennan J). That case was concerned with an earlier form of s 233B(1) and the question was whether the burden of proving knowledge on the part of the accused lay on the prosecution or the burden of its disproof lay on the defence. The Court held that knowledge was an essential element of a charge of possession and therefore it was not for the accused to prove ignorance of the physical presence of the goods in his custody, as constituting a “reasonable excuse”. So much appears from the passage identified in the judgment of Gibbs CJ at 539:
“Plainly the words suggest that no question of reasonable excuse arises until it is proved that the accused had possession of the goods. Since possession imports knowledge, ‘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.”
66 To similar effect Brennan J stated at 588:
“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.”
67 In Taikato v The Queen (1996) 186 CLR 454 at 464, the joint judgment of Brennan CJ, Toohey, McHugh and Gummow JJ referred, obiter, to the concept of reasonable excuse in relation to a charge of possessing a spray canister containing an irritant substance. Their Honours stated:
“The term ‘reasonable excuse’ has been used in many statutes and is the subject of many reported decisions. But decisions on other statutes provide no guidance because what is a reasonable excuse depends not only on the circumstances of the individual case but also on the purpose of the provision to which the defence of ‘reasonable excuse’ is an exception.” (Footnotes omitted.)
68 In some circumstances reasonable excuse may need to be distinguished from lawful purpose or lawful excuse whereas in others it may encompass all three concepts. In some circumstances it may, as suggested in He Kaw Teh, cover the situation of a law enforcement officer who has prohibited goods in his or her possession whilst engaged in law enforcement activities. However, where the circumstances of lawful possession for law enforcement activities are regulated by statute, such possession may not constitute a reasonable excuse if the conditions prescribed by the statute have not been complied with. By way of analogy, the existence of a privilege may constitute a reasonable excuse for not answering questions or producing documents; whether in fact it does will depend upon the particular statutory context, which may be inconsistent with the existence of such a privilege: see, eg, Controlled Consultants Pty Ltd v Commissioner for Corporate Affairs (1985) 156 CLR 385 at 392; Ganin v New South Wales Crime Commission (1933) 32 NSWLR 423 and Bank of Valletta plc v National Crime Authority (1999) 164 ALR 45 at [46]-[47]. Accordingly it is necessary to consider the scope of the phrase in the present case by reference to its statutory context.
69 The relevant examples given in He Kaw Teh of possession with reasonable excuse involved possession in the course of removing the drugs from circulation, albeit in the absence of any particular legislative immunity. The deliberate release of prohibited drugs into circulation, even as part of a police controlled operation, could not involve possession with reasonable excuse. That conclusion was the unquestioned premise in Ridgeway v The Queen (1995) 184 CLR 19. Although the police officers were not charged, the fact that there had been an illegal importation was an essential element of the offence: 184 CLR at 25 (Mason CJ, Deane and Dawson JJ), at 62-63 (Toohey J). Against this background Part IAB of the Crimes Act 1914 now provides a precisely defined regime for possession of drugs in the course of controlled operations for law enforcement purposes; it cannot have been intended that possession of drugs for such purposes without complying with the regime would constitute a reasonable excuse. (It is not necessary to consider the situation where a participant has a bona fide but erroneous belief that the provisions had been complied with and that a relevant certificate is in operation, because that was not this case.)
70 If possession for the purposes of a police operation did not constitute possession with reasonable excuse prior to the enactment of Part IAB, it could not do so thereafter, where no certificate had been obtained under Part IAB. The only remaining question is whether involvement in a controlled operation with authority under the State Act could constitute a “reasonable excuse” under the Customs Act. Whatever may have been the position prior to the enactment of Part IAB, such a possibility must now be rejected. The detailed scheme of Part IAB is inconsistent with the achievement of the same result by a different mechanism, namely the combination of a State authority with the concept of “reasonable excuse” in s 233B(1). This is not, of course, a question of inconsistency between Commonwealth and State law: it is purely a question of construing the operation of two Commonwealth laws in order to determine their combined operation and effect.
71 These contentions involve matters of construction arising from the specific circumstances of controlled operations which would be sufficient to take the conduct outside the “reasonable excuse” defence, even if that defence would be available in other circumstances involving possession which was for law enforcement purposes. It follows that the State authorities did not provide a reasonable excuse and the relevant conduct of the participants was unlawful under the Customs Act.
Conduct endangering health: jurisdictional fact
72 The second issue in contention concerns the requirement that an authority “must not be granted” that would involve any participant “engaging in conduct that is likely to seriously endanger the health or safety of … any other person”: s 7(1)(b). The first question to be addressed in this context is whether the assessment of that factor is to be determined by the repository of the power (in which case the jurisdictional fact will be his or her satisfaction in relation to that matter) or whether the matter is one for determination by a court, if and when the authority it challenged.
73 For the reasons given by Spigelman CJ, incorporating the reasons of the trial judge, I agree that the relevant jurisdictional fact is the satisfaction of the Commissioner. In addition to the reasons their Honours give, I would add the following considerations based on the statutory language and scheme.
74 As noted by the primary judge at [209] there is an interrelationship between the matters identified in s 7(1) and those in s 6(3). The latter factors are dependent upon the satisfaction of the Commissioner. Whilst s 7(1) is not so conditioned in express terms, the interrelationship suggests that the same approach should be adopted in each case. In particular, the Commissioner is required to be satisfied “that the nature and extent of the proposed controlled activities are appropriate to the suspected criminal activity or corrupt conduct”: s 6(3)(c). It is only when the nature and extent of the proposed controlled activities have been identified that the likelihood that they may endanger health or safety can be assessed. Further, the existence of such a risk to health or safety may in turn affect the nature and extent of the proposed controlled activities. Whilst it is conceivable that the Commissioner’s state of satisfaction is to be circumscribed by objective limits, a close interrelationship between the two matters renders that less rather than more likely.
75 Secondly, there are two matters set out in s 7(1) and no reason appears for adopting a different approach in relation to paragraph (a) as opposed to paragraph (b). Paragraph (a) is concerned with a participant “inducing or encouraging another person to engage in criminal activity” which would not otherwise reasonably be expected. Not only is that matter also intimately related to a matter set out in s 6(3), namely whether there are “reasonable grounds to suspect that criminal activity … is about to be conducted”, but it is precisely the kind of matter which requires the evaluative judgment of the head of a law enforcement agency.
76 Thirdly, although satisfaction of the Commissioner is referred to in parts of s 7, and not others, as well as in s 6, there is no clear attempt to distinguish one set of circumstances or factors from another. Thus, s 7 expressly provides that the Commissioner must be satisfied as to the “appropriate skills” of any person participating in a controlled operation (s 7(2)) and, where a civilian participant is to be authorised, that it is wholly impracticable for a law enforcement participant to undertake that role: s 7(3)(a). However, the need to ensure that the aspect of the activity in which the civilian participant is to participate is to be restricted as far as practically possible, as provided by s 7(3)(b), there is no reference to the satisfaction of the Commissioner in that regard. Nevertheless, it would be remarkable if it were not the repository of the power who was to be satisfied in relation to both paragraphs (a) and (b) of s 7(3).
77 Fourthly, a construction which would remove the statutory immunity from a participant in a controlled activity should only be adopted where the intention of the legislation to that effect is clear and unambiguous. Perhaps unintentionally, s 19 provides civil immunity for conduct engaged in “in good faith and for the purpose of executing this Act” in relation to the conduct of various individuals, including the Commissioner and a participant in an authorised operation. The position of the Commissioner is not at risk; but a person will only be a participant in an authorised operation if he or she “is authorised under this Act to engage in controlled activities”: s 3, participant. At least on its face, it would seem that invalidity of the authority would result in a withdrawal of civil immunity, even if the participant acted in good faith and for the intended purpose of undertaking that which was apparently authorised.
Conduct endangering health or safety
78 The second question which arises in relation to the application of s 7(1)(b), is the scope of the “conduct” and the extent of the consequential harm which needs to be considered.
79 Evidence was tendered which sought to establish the harm which could be caused by the release of a significant quantity of cocaine into the community. However, as the Chief Justice notes at [49] above, it should be assumed that the health of users of the cocaine would be “seriously endangered”. In issuing the authorities the Commissioner stated, relevantly to s 7(1)(b), that he was satisfied that:
“No participant will engage in conduct that is likely to seriously endanger the health or safety of that or any other participant, or any other person, or result in serious loss or damage to property.”
He did so, it may be inferred, on the basis of a statement contained in the application prepared by a law enforcement officer in the following terms (at par 13):
“… and no participant in the operation will engage in conduct that is likely to seriously endanger the health or safety of that or any other participant, or any other person, or result in serious loss or damage to property.”
80 It should be inferred on the basis of this material that neither the applicant nor the Commissioner addressed the question of harm to ultimate users of the cocaine which was to be supplied in the course of the operation and which, it was anticipated, was unlikely to be recovered.
81 Once it is accepted that the conduct (the supply of cocaine) was likely to result in consumption of the cocaine and that consumption of the cocaine would endanger the health of the consumer, it is difficult to understand why, both as a matter of construction, and in terms of the policy underlying the legislation, that is not a factor which must be taken into account. If it were taken into account, absent some specific circumstance which has not been identified by the parties in the present case, it would seem that the authority could not be granted. Why, then, should that factor not fall within the scope of s 7(1)(b)?
82 One proffered reason is that the adverse consequence must not be remote from the conduct involved in the proposed operation. Thus, if it is not the expectation that the immediate recipient of the supply will consume the cocaine, there is an extra step in the chain of causation. However, if it were thought likely that the immediate supplier might consume part of the cocaine, it seems difficult to see why a different result should follow.
83 Another possibility is that the causal connection should be seen to be broken where the injury to health is caused by the voluntary and unlawful act of a third person. Thus the use of cocaine might be distinguished from the provision of arsenic to a suspected blackmailer who intended to contaminate goods on supermarket shelves. The risk to life and health of consumers in the latter case would flow from the lawful and unwitting purchase of contaminated goods. Whilst the factual distinction may be conceded, it is unclear that the section should operate differentially on such a basis. If the purpose of the law sought to be enforced is to prevent the supply of prohibited drugs which are likely seriously to endanger health or safety, a controlled operation which is likely to result in the release of such drugs for consumption clearly falls within the purpose for the legal proscription. If the test is whether the likely harm to any person other than a participant must occur at a time and place not “far removed from” the occasion or place of the proposed operation, it would not be possible to take account of the possible death of consumers exposed to contaminated products purchased at a supermarket. On the other hand, if the consequential effects in this case are clear, in the sense of being “likely”, it is difficult to see why they should be disregarded because in other cases the consequential effects will be harder to discern and may be less likely or even unlikely to eventuate.
84 It is often helpful to test a proposed construction of a statute by reference to its possible operation in other circumstances. Nevertheless, there are risks in taking that exercise too far. The need to consider possible harm which might occur due to criminals seeking to ‘escape from the crime scene’ would also need careful analysis. It is at least possible that those circumstances would flow from the attempt to arrest the criminals, rather than from some conduct involved in the controlled operation. By analogy with conferral of immunity in other circumstances, it might be wrong to treat the controlled operation as continuing to the stage of an attempted arrest which would otherwise be authorised by law: c.f. Board of Fire Commissioners (NSW) v Ardouin (1961) 109 CLR 105.
85 Similarly, retaliatory acts by a person targeted in the operation, which may endanger the safety of participants or third parties might properly be said to flow, not from the authorised conduct, but from a belief of the person targeted that he or she had been betrayed to the authorities. Whether such a conclusion is open would need to be considered in specific circumstances as they arose, as would findings as to whether the risk were likely or unlikely to eventuate.
86 In my view the appeal should be upheld on the basis that:
(a) the activities the subject of the authority were not controlled activities under the LECO Act because, despite any putative operation of s 16, they would remain “unlawful”; and
(b) the authorities could not in any event have properly been granted because the grant would in each case have been prohibited by s 7(1)(b) of the LECO Act.
87 The claimants are therefore entitled to appropriate relief in this Court. In substance that relief involves declarations as to the invalidity of the authorities granted by the Commissioner. The claimants also sought orders in the nature of certiorari quashing each of the authorities. However, each authority purported to be in force for a period of less than one week and the activities which it purported to authorise have already been carried out. Further, the interest of the claimants in challenging the validity of the authorities was as a basis for seeking the exclusion of evidence pursuant to s 138 of the Evidence Act 1995 (NSW). In these circumstances, it is neither necessary nor appropriate to quash the purported authorities: declarations of invalidity will suffice. Further, as proposed in the orders sought, the declarations should be limited to the operation of the LECO Act: the consequences which may follow in relation to evidence tendered at the forthcoming trials will be a matter for the trial judge.
88 I would propose the following orders:
(1) Grant leave to appeal from the judgments and answers to questions given by Hall J on 12 December 2006 and 6 March 2007, to the extent that they relate to the claimants and to the extent that they related to the validity of authorities granted by the Commissioner, being –
(a) No. 05/00556 granted on 8 February 2005;
(b) No. 05/01038 granted on 22 February 2005, and
(c) No. 05/01792 granted on 17 March 2005.
(2) Direct each Claimant to file a Notice of Appeal within 14 days.
(3) In each appeal:
(a) Set aside the order made in the Court below dismissing the amended summons.
(i) the activities the subject of the relevant authority or authorities were not controlled activities;
(ii) the Commissioner had no power to grant authority to conduct the controlled operations described in the authority or authorities, because the operations involved a participant in the operation engaging in conduct that was likely to seriously endanger the health or safety of another person, contrary to s 7(1)(b) of the Law Enforcement (Controlled Operations) Act 1997 (NSW), and
(iii) consequently, each authority was invalid.
(c) Order that the Respondent Commissioner pay the Appellant’s costs in this Court and in the Court below.
89 HANDLEY AJA: I agree with Spigelman CJ.
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