South Australian Cases: K-Generation Pty Ltd & Anor v Liquor Licensing Court & Anor [2007] SASC 319

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K-Generation Pty Ltd & Anor v Liquor Licensing Court & Anor [2007] SASC 319

30 August 2007 Supreme Court of South Australia - Full Court

This version of the judgment has been prepared by: Dr Robert N Moles and Bibi Sangha
Underlining where it occurs is for editorial emphasis]

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Duggan J

I have had the advantage of reading the draft reasons of Gray J. I respectfully agree with his Honour’s reasoning on all issues with the exception of that relating to the validity of s 28A of the Liquor Licensing Act 1997 (“the Licensing Act”). The validity issue is raised in paragraph 1A of the orders sought in the amended summons. Paragraph 1A seeks: “A declaration that the provisions of s 28A of the Liquor Licensing Act 1997(SA) are invalid in so far as they impermissibly interfere with the exercise by the First Defendant [the Licensing Court] of the judicial power of the Commonwealth.” Before discussing the basis upon which this order is sought, it is appropriate to summarise some of the provisions in the Licensing Act which deal with the constitution and procedures of the Licensing Court.

The Licensing Court

The Licensing Court, which was created under previous legislation, continues in operation under s 12 of the Licensing Act. It is a court of record and is constituted of a Licensing Court Judge or some other District Court Judge or former District Court Judge with authority to exercise the jurisdiction of the Court. Section 15 provides that the Governor may designate a District Court Judge as the Licensing Court Judge or confer on other District Court Judges, or former District Court Judges, authority to exercise the jurisdiction of the court. The court is not a division of the District Court; nor is it invested with Federal jurisdiction in the performance of any of its functions.

The principal purpose of the Act as stated in the legislation is “to regulate the sale, supply and consumption of liquor”. The administration of the Act is the responsibility of the Liquor and Gambling Commissioner (“the Licensing Commissioner”). The Licensing Act provides for a division of responsibilities between the Licensing Commissioner and the Court.

Proceedings before the Licensing Court and the Licensing Commissioner are to be conducted without undue formality and neither are bound by the rules of evidence, but are to inform themselves on any matter as they see fit. The term “licensing authority” is defined to mean either the Licensing Court or the Licensing Commissioner. A party to proceedings before the Licensing Commissioner may apply for a review of the Licensing Commissioner’s decision. The review is in the nature of a rehearing.

The Kable Principle

The plaintiffs argued before this court that the application of the principle discussed by the High Court in Kable v DPP for New South Wales (1996) must lead to the conclusion that s 28A is an invalid exercise of the legislative power of the State parliament. In Kable the court was required to rule on the validity of the Community Protection Act 1994 (NSW) which was enacted prior to the release of the appellant from prison where he was serving a sentence of imprisonment for the manslaughter of his wife. The legislation applied only to the appellant and authorised the Supreme Court to order his further detention if the court was satisfied on reasonable grounds that the appellant was more likely than not to commit a serious act of violence and that it was appropriate for the protection of a particular person or the community generally that he be held in custody. The court was empowered to extend the appellant’s detention by a maximum period of six months, but applications could be made for further extensions.

The legislation was declared invalid by a majority of the court. The principal argument advanced by the appellant and accepted by the majority was summarised by Gaudron J as follows: “Ch III of the Constitution impliedly prevents the Parliament of a State from conferring powers on the Supreme Court of a State which are repugnant to or inconsistent with the exercise by it of the judicial power of the Commonwealth.”

The essence of the decision in Kable was summarised by Gleeson CJ in Fardon v Attorney-General for the State of Queensland: (2004) 223 CLR 575 “The decision in Kable established the principle that, since the Constitution established an integrated Australian court system, and contemplates the exercise of federal jurisdiction by state Supreme Courts, state legislation which purports to confer upon such a court a function which substantially impairs its institutional integrity, and which is therefore incompatible with its role as a repository of federal jurisdiction, is invalid.

His Honour continued: “The New South Wales legislation in question in that case provided for the preventive detention of only one person, Mr Kable. As was pointed out by Dawson J, the final form of the legislation had a number of curious features, because of its parliamentary history. It was originally framed as a law of general application, but an amendment confined its application to the appellant. The object of the statute in its final form was said to be to protect the community by providing for the preventive detention of Gregory Wayne Kable. Toohey J said that the extraordinary character of the legislation and of the functions it required the Supreme Court to perform was highlighted by the operation of the statute upon one named person only. In that respect, he said, the statute was virtually unique. Senior counsel for the appellant in the case argued that the legislation was not a carefully calculated legislative response to a general social problem; it was legislation ad hominem. That argument was accepted. The members of the court in the majority considered that the appearance of institutional impartiality of the Supreme Court was seriously damaged by a statute which drew it into what was, in substance, a political exercise.”

In her judgment in Kable Gaudron J noted that the proceedings contemplated by the legislation were not proceedings otherwise known to the law. The appellant was not charged with a further criminal offence, nor did the proceedings involve the resolution of a dispute between contesting parties as to their rights and obligations. The proceedings involved the making of a guess about future conduct and, in some circumstances, the decision could be based on material which would not be admissible as evidence in regular proceedings. Her Honour described the procedure authorised by the legislation as “the antithesis of the judicial process”.

In the view of McHugh J the legislation invested the Supreme Court with a jurisdiction which was “purely executive in nature”. Gummow J observed that the most striking feature of the legislation was that it permitted imprisonment in circumstances which did not involve any adjudgment by the court of guilt of any offence, describing such a process as “non-judicial in nature” and “repugnant to the judicial process in a fundamental degree”. In the light of this reasoning the decision in Kable is, as its subsequent history has demonstrated, of very limited application.

In Kable the State legislature purported to confer the impugned function on the Supreme Court, a court which exercises federal jurisdiction. As has been noted, the Licensing Court does not exercise federal jurisdiction in any respect. Pursuant to s 77(iii) of the Constitution, the Commonwealth Parliament may make laws “investing any court of a State with federal jurisdiction”. It was conceded by the Solicitor-General that the Licensing Court is a “court” for the purposes of s 77(iii) and that, as it was possible for it to be invested with federal jurisdiction, the Kable principle applied. If this is so, it is necessary to consider whether s 28A should be declared invalid because it confers upon the Licensing Court a function which is incompatible with that court’s role as a potential repository of federal jurisdiction.

Appointments persona designata

In any event, whether or not the Licensing Court is a “court” for the purposes of Ch III, it is also relevant to consider whether s 28A is invalid as a result of the application of a principle which is closely related to that discussed in Kable. It is well recognised that a judge may have a non-judicial function conferred upon him or her persona designata, Hilton v Wells and Ors (1985) 157 CLR 57. However, it has been held that, at least in the case of Federal judges, legislation which authorises the conferral of a non-judicial function which is incompatible with the judge’s role as a Federal Court judge, will be held invalid.

As has been pointed out, a District Court judge may be designated as the Licensing Court judge and other District Court judges may have conferred upon them authority to exercise the jurisdiction of the Licensing Court. This is accomplished by proclamation made by the Governor and so results in the conferring of jurisdiction on the judges in their individual capacities. The question arises, therefore, whether a District Court judge designated as the Licensing Court judge and other District Court judges who have the jurisdiction of the Licensing Court conferred upon them, are required to perform a function which is incompatible with the exercise of their judicial power as judges of the District Court, a court which exercises federal jurisdiction. If so, the further question which presents itself is whether s 28A, which is said to give rise to this incompatibility, is thereby rendered invalid.

The judges who formed the majority in Kable said little about the role of State judges performing non-judicial functions as persona designata. When considering such appointments Gaudron J appeared to confine her consideration to judges of Federal Courts. She said: “The prohibition on State legislative power which derives from Ch III is not at all comparable with the limitation on the legislative power of the Commonwealth enunciated in R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254. The Boilermakers’ doctrine, as it is sometimes called, prevents the Parliament of the Commonwealth from conferring judicial power on bodies other than courts and prevents it from conferring any power that is not judicial power or a power incidental thereto on the courts specified in s 71 of the Constitution. It also prevents the Parliament from conferring functions on judges in their individual capacity if the functions are inconsistent with the exercise of judicial power in the sense explained in Grollo v Palmer (1995) 184 CLR 348. The limitation on State legislative power is more closely confined and relates to powers or functions imposed on a State court, rather than its judges in their capacity as individuals, and is concerned with powers or functions that are repugnant to or incompatible with the exercise of the judicial power of the Commonwealth.”

“Although the limitation is one relating to the conferral of powers on courts, rather than on judges in their capacity as individuals, it is, nevertheless, one that is closely related to the limitation on Commonwealth power to confer functions on judges of this and other federal courts in their capacity as individuals. In both cases the limitation derives from the necessity to ensure the integrity of the judicial process and the integrity of the courts specified in s 71 of the Constitution. (emphasis added)”

McHugh J allowed some operation of the principle to persona designata appointments of State judges, but restricted it to rare circumstances. He said: “Furthermore, although nothing in Ch III prevents a State from conferring executive government functions on a State court judge as persona designata, if the appointment of a judge as persona designata gave the appearance that the court as an institution was not independent of the executive government of the State, it would be invalid. No doubt there are few appointments of a judge as persona designata in the State sphere that could give rise to the conclusion that the court of which the judge was a member was not independent of the executive government. Many Chief Justices, for example, act as Lieutenant-Governors and Acting Governors. But, given the long history of such appointments, it is impossible to conclude that such appointments compromise the independence of the Supreme Courts or suggest that they are not impartial. Similarly, a law that provided for a judge of a State court to be appointed as a member of an Electoral Commission fixing the electoral boundaries of the State would not appear to suggest that the court was not impartial. However, a State law which purported to appoint the Chief Justice of the Supreme Court to be a member of the Cabinet might well be invalid because the appointment would undermine confidence in the impartiality of the Supreme Court as an institution independent of the executive government of the State. (footnote omitted)

In Grollo v Palmer and Wilson v Minister for Aboriginal & Torres Strait Islander Affairs (1996) 189 CLR 1 the relevant principles were discussed in the context of non-judicial functions conferred on Federal Court judges. In Grollo the court considered the validity of the issuing of telephone interception warrants by a Federal Court judge. It was held that this power was non-judicial, but that it was nevertheless validly conferred. The validity of the conferral of power in such circumstances was held to be dependent upon the fulfilment of the two conditions expressed in the following passage in the judgment of Brennan CJ, Deane, Dawson and Toohey JJ: “The conditions thus expressed on the power to confer non-judicial functions on judges as designated persons are twofold: first, no non-judicial function that is not incidental to a judicial function can be conferred without the judge’s consent; and, second, no function can be conferred that is incompatible either with the judge’s performance of his or her judicial functions or with the proper discharge by the judiciary of its responsibilities as an institution exercising judicial power (“the incompatibility condition”).”

In Wilson a Federal Court judge was nominated by the Minister for Aboriginal and Torres Strait Islander Affairs to report on issues relating to the Hindmarsh Island bridge dispute. It was held that the function of reporting to the Minister was not constitutionally compatible with the holding of the office of a judge appointed pursuant to Ch III of the Constitution. Brennan CJ, Dawson, Toohey, McHugh and Gummow JJ set out the relevant principles in their joint judgment: “Where a non-judicial power is purportedly conferred, constitutional incompatibility is ascertained by reference to the function that has to be performed to exercise the power. The statute or the measures taken pursuant to the statute must be examined in order to determine, first, whether the function is an integral part of, or is closely connected with, the functions of the Legislature or the Executive Government. If the function is not closely connected with the Legislature or the Executive Government, no constitutional incompatibility appears. Next, an answer must be given to the question whether the function is required to be performed independently of any instruction, advice or wish of the Legislature or the Executive Government, other than a law or an instrument made under a law (hereafter “any non-judicial instruction, advice or wish”). If an affirmative answer does not appear, it is clear that the separation has been breached. The breach is not capable of repair by the Ch III judge on whom the function is purportedly conferred, for the breach invalidates the conferral of the function. If the function is one which must be performed independently of any non-judicial instruction, advice or wish, a further question arises: Is any discretion purportedly possessed by the Ch III judge to be exercised on political grounds - that is, on grounds that are not confined by factors expressly or impliedly prescribed by law? In considering these questions, it will often be relevant to note whether the function to be performed must be performed judicially, that is, without bias and by a procedure that gives each interested person an opportunity to be heard and to deal with any case presented by those with opposing interests. An obligation to observe the requirements of procedural fairness is not necessarily indicative of compatibility with the holding of judicial office under Ch III, for many persons at various levels in the executive branch of government are obliged to observe those requirements. But, conversely, if a judicial manner of performance is not required, it is unlikely that the performance of the function will be performed free of political influence or without the prospect of exercising a political discretion.”

Although the principles discussed in Kable on the one hand and Grollo and Wilson on the other have much in common, it is important to note that the Kable principle focuses on the effect which the impugned legislation has on the court as an institution. In Fardon v Attorney-General for the State of Queensland McHugh J emphasised the exceptional result which the State legislation must produce before the Kable principle will require its invalidation. He said: “The bare fact that particular State legislation invests a State court with powers that are or jurisdiction that is repugnant to the traditional judicial process will seldom, if ever, compromise the institutional integrity of that court to the extent that it affects that court's capacity to exercise federal jurisdiction impartially and according to federal law. State legislation may alter the burden of proof and the rules of evidence and procedure in civil and criminal courts in ways that are repugnant to the traditional judicial process without compromising the institutional integrity of the courts that must administer that legislation. State legislation may require State courts to exercise powers and take away substantive rights on grounds that judges think are foolish, unwise or even patently unjust. Nevertheless, it does not follow that, because State legislation requires State courts to make orders that could not be countenanced in a society with a Bill of Rights, the institutional integrity of those courts is compromised.”

“The pejorative phrase - "repugnant to the judicial process" - is not the constitutional criterion. In this area of constitutional discourse, it is best avoided, for it invites error. That which judges regard as repugnant to the judicial process may be no more than a reflection of their personal dislike of legislation that they think unjustifiably affects long recognised rights, freedoms and judicial procedures. State legislation that requires State courts to act in ways inconsistent with the traditional judicial process will be invalid only when it leads to the conclusion that reasonable persons might think that the legislation compromises the capacity of State courts to administer invested federal jurisdiction impartially according to federal law. That conclusion is likely to be reached only when other provisions of the legislation or the surrounding circumstances as well as the departure from the traditional judicial process indicate that the State court might not be an impartial tribunal that is independent of the legislative and the executive arms of government.”

In the case of a judge appointed persona designata, the enquiry focuses on the role assigned to the judge and whether there exists an incompatibility between that role and the role of the assignee as a judge of a court exercising federal jurisdiction.

The case for the plaintiffs

According to the case for the plaintiffs, the procedure introduced by s 28A impairs the institutional integrity of the Licensing Court to an unacceptable degree. It was also argued that the section requires a judge exercising jurisdiction as a licensing authority to act in a way which is incompatible with the role of a judge of the District Court. The features of the section upon which reliance is placed are the potential use of information by the court which is not available to a person in the position of the plaintiffs and the fact that the court is restricted from giving reasons for its decision to the extent to which the decision rests on the classified material.

The full implications of Kable, Grollo and Wilson are yet to be determined. In particular, the extent to which these principles apply to courts such as the Licensing Court which is invested with a specialist jurisdiction and to judges of State courts exercising non-judicial functions remains to be seen. However, in view of my eventual conclusion in this matter it is sufficient for present purposes to deal with the arguments on the assumption that the Kable principle applies in the case of the Licensing Court and that the principles discussed in Grollo and Wilson apply to a judge of the District Court who is delegated to exercise the jurisdiction of the Licensing Court.

Procedural fairness

It is clear that, but for s 28A, procedural fairness would require that an applicant for a licence in the circumstances of the present case be entitled to disclosure of information provided to the licensing authority by the Commissioner of Police and, further, would be entitled to the opportunity to test it and comment upon it. However, such rights can be removed by unequivocal legislation. This is apparent from the following statement in the judgment of Mason CJ, Deane and McHugh JJ in Annetts v McCann: (1990) 170 CLR 596 at 598 “It can now be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person’s rights, interests or legitimate expectations, the rules of natural justice regulate the exercise of that power unless they are excluded by plain words of necessary intendment: Commissioner of Police v Tanos (1958) 98 CLR 383 at pp 395-396; Twist v Randwick Municipal Council (1976) 136 CLR 106 at pp 109-110; Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487 at pp 496, 500; J. v Lieschke (1987) 162 CLR 447 at p 456; Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648 at p 680. In Tanos, Dixon CJ and Webb J said that an intention on the part of the legislature to exclude the rules of natural justice was not to be assumed nor spelled out from “indirect references, uncertain inferences or equivocal considerations”.

In Tanos which is cited in the above passage, a judge of the Supreme Court was given power under the Disorderly Houses Act 1943 (NSW) to declare premises to be a disorderly house upon the affidavit of a Superintendent or Inspector of Police which disclosed reasonable grounds for suspecting that liquor or a drug was unlawfully sold on the premises and was likely to be sold again. The order could be made ex parte in chambers. The judge was given the power, if he or she thought fit, to provide the owner of the premises with an opportunity to be heard, but this was not mandatory. The High Court held that proceedings which did not give the owner or occupier of the premises an opportunity to be heard should take place only in exceptional circumstances and that no such exigency existed in the circumstances of the case.

However, the court recognised that the common law right to be heard in such a matter could be overridden by the legislature. In their joint judgment Dixon CJ and Webb J said: “But the rule [the right to be heard] is subject to a sufficient indication of an intention of the legislature to the contrary. Such an intention is not to be assumed nor is it to be spelled out from indirect references, uncertain inferences or equivocal considerations. The intention must satisfactorily appear from express words of plain intendment. In the present statute no such evidence of a contrary intention is discoverable. But it is in a broad sense a procedural matter and while the general principle must prevail it is apparent that exceptional cases may be imagined in which because of some special hazard or cause of urgency an immediate declaration is demanded.

In his judgment in Gypsy Jokers Motorcycle Club Inc v Commissioner of Police [2007] WASCA 49 Martin CJ referred to a number of situations in various countries and jurisdictions where the rules of procedural fairness had been modified by restricting access to information placed before the court or tribunal. In his summary of this survey the Chief Justice said: “No Australian authority has been cited in support of the proposition that unrestricted access by a party to all the information upon which a court relies for its adjudication of the case before it, is an essential or indispensable aspect of a fair trial. My review of the decisions of the European Court of Human Rights, and the courts of the United Kingdom, New Zealand, Canada and the United States leads me to conclude that the courts in those jurisdictions have not concluded that the right of a party to have unrestricted access to all the information, upon which a court relies, is an essential or indisputable component of a fair trial.”

“Rather, my review of those jurisdictions leads me to conclude that in each of the jurisdictions, it has been acknowledged that the content of the requirements of procedural fairness or fundamental justice will depend upon the particular circumstances of the case and cannot be prescribed in the abstract. Further, in each jurisdiction, it has been expressly recognised that the ordinary requirements of procedural fairness, including the ability of a party to know the case that he or she has to meet, must sometimes yield to a countervailing public interest in the protection of the confidentiality of evidentiary material, even as against a party to the proceedings. In some jurisdictions with particular statutory charters of human rights, that conclusion has depended upon the provision of legislative safeguards against the abuse of such powers. However, even in those jurisdictions, the courts have generally, but not invariably, shown an inclination to leave the striking of the appropriate balance to the legislature rather than usurp that function themselves.”

“This review therefore supports the conclusion that in Australia, a legislative provision, apparently enacted in the protection of a legitimate public interest in maintaining the confidentiality of investigative information empowering a court to act upon that information, even though it not be disclosed to a party to the proceedings cannot, for that reason only necessarily be said to be unfair, and therefore cannot, for that reason only, be said to compromise the institutional integrity of the court concerned. This is not, of course, to say that all provisions which have the effect that a court must act upon information which one party to the proceedings will not have disclosed to the other, will necessarily fall within the legislative power of a state. Rather, the question of validity may turn upon the particular circumstances and context of the legislative provision, including the public interest in the maintenance of confidentiality, the subject matter of the curial proceedings, the procedures to be adopted and so on.”

Counsel for the plaintiffs relied on the dissenting judgment of Wheeler JA in Gypsy Jokers. In that case, the court was required to determine whether s 76 of the Corruption and Crime Commission Act 2003, (WA) was invalid. The section is part of a legislative scheme empowering the police to remove or modify “fortifications” which are defined in the legislation as “any structure or device that, whether alone or as part of a system, is designed to prevent or impede, or to provide any other form of countermeasure against, uninvited entry to premises”.

If certain preconditions have been satisfied, the Commissioner of Police may issue a fortification removal notice relating to the premises concerned (s 72). The fortification removal notice consists of a direction that the fortification be removed or modified within a fixed period of time. Section 75 provides that if the fortifications are not removed or modified within the period notified, the Commissioner of Police may cause the removal or modification required by the fortification removal notice.

The validity of the legislation was upheld by the majority (Martin CJ and Steytler P). Wheeler JA dissented and held that s 76(2) was invalid by reason of the Kable principle. Her Honour was of the view that the cases of Grollo and Wilson were particularly relevant to the issue before the court and she noted that in Kable the decision of Grollo was seen as being of considerable significance to the resolution of that case.

After discussing the principles expounded in these cases her Honour said: “So far as the review function pursuant to s 76 is concerned, it appears to me that it may be described as closely connected with the exercise of executive power; or, at the least, I am not able to say that it is “not closely connected”. It is a step in a process, initial and final stages of which involve the exercise of purely executive power. The Commissioner of Police applies for the fortification warning notice and the Corruption and Crime Commission issues that notice. The Commissioner of Police then, having considered any relevant submissions, either does or does not form the belief referred to in s 72(2). Those three steps are executive ones. The function of the court is one which may be performed either by the Executive or by a court. It is similar to the function of an administrative tribunal (eg, that of the AAT under the Freedom of Information Act1982 (Cth) s 58(5)). It is similar to, but more limited than, many internal review functions exercised by officers of government departments (eg, Freedom of Information Act s 54(2); Social Security (Administration) Act 1999 (Cth)s 126(1)). It is also, however, similar to the function performed on other occasions by courts (see the discussion in McKinnon v Secretary, Department of Treasury [2006] HCA 45; (2006) 80 ALJR 1549 at [9], per Gleeson CJ and Kirby J). The court's function is confined to the consideration of one very narrowly framed question. Unless the court determines that the Commissioner could not have reasonably had the belief required, the next step is that the court's function is ended and the notice simply has effect according to its terms. The Commissioner of Police then may or may not exercise the further powers available to him pursuant to Div 6 of Pt 4.”

“If, as I think is the case, the court's function in “reviewing” the decision of the Commissioner of Police cannot be described as not closely connected with the functions of the Executive Government, the question which then arises is whether the court's function is required to be performed independently of any “instruction, advice or wish of the legislature or the Executive Government, other than a law or an instrument made under a law”. In my view, the function conferred by s 76 is not required to be performed independently of any such instruction. On the contrary, the Commissioner of Police, an officer appointed by and answerable to the Executive (Police Act 1892 (WA) s 5) may identify information which he or she may require the court not to disclose to the applicant for review. That is, the legislation confers upon the Executive power to determine, in each individual case, how much of the information presented to the court the court may disclose to the opposing party.”

“Further, the direction which the Commissioner may effectively give to the court will often be critical to the court's ability fully and fairly to perform its function. Because the only question for the court is whether the Commissioner of Police could have reasonably had the belief required by s 72(2), the only material which will usually be relevant to such an issue will be the information which the Commissioner had before him, apart from the submissions of the applicant for review. There may be some room in the process for the applicant for review to provide additional information, on the basis that, even if it was not information which the Commissioner formally “took into consideration” (s 76(1)), it formed part of the background known to the Commissioner and which should have informed the decision; (for example, perhaps, the demonstrated previous unreliability of an informant). Generally, however, the applicant for review may not even be aware of the desirability of raising an issue of this kind, if information which could have alerted the applicant to a question of this kind is described as confidential under s 76(2).”

Her Honour then identified features of the procedure which she said should lead to the invalidation of s 76(2): “The features which in combination have that effect are these. The Commissioner of Police, who is an officer of the Executive Government, decides conclusively what information the court may publish or disclose, both to a party to litigation and (in any reasons which may be published) to the public at large. That Executive decision, once made, has the potential significantly to disadvantage the individual litigant opposed to the Executive. The respondent to an application in the Supreme Court (the Commissioner of Police) is empowered conclusively to determine whether and to what extent information which that party makes available to the court can be disclosed to the opposing party. The court is required to make a determination affecting the property rights of a party in circumstances in which that party may have had no opportunity whatever to consider (even in a summarised or truncated way) the material put against it. Finally, the court's ability to provide intelligible reasons for its decision, or otherwise to perform its functions in that public way which is generally the hallmark of justice is impaired or destroyed, because of the court's inability to disclose material which may be critical to its determination. It may be that no one of these factors individually would be sufficient. However, it seems to me that collectively they represent such a departure from the requirement of independence of the Executive and such a departure from that impartiality which is the hallmark of the judicial process, as to render the legislation invalid.”

The removal of the opportunity to comment on material put before the court and the limitation of the court’s ability to provide reasons for its decision were important factors influencing her Honour’s conclusion. However, the fact that the court was placed in the position of reviewing the reasonableness of the belief of the decision maker, an officer of the Executive Government who could prevent the disclosure to the affected party of information upon which the decision was made, appears to have been an essential step in her Honour’s reasons for deciding that the court’s role was not independent of the Executive. In my view, this threat to independence does not exist in the present case.

In his judgment, Steytler P observed that counsel for the applicant relied upon the following propositions:
(1) The legislation empowers the Commissioner of Police as one of the parties to the review application to impose his own decision on the Supreme Court by controlling the information to be provided to the applicant for review.
(2) There was a denial of natural justice by limiting the information made available to the applicant for review.
(3) The court might be prevented from giving adequate and comprehensible reasons for its decision. (4) There was no appeal from the court’s decision.

Steytler P acknowledged that there were aspects of the legislation which were antithetical to the judicial process. He referred to the matters set out in (2) and (3) above. However he said that these matters did not “compromise the institutional integrity of the court to such an extent that it is no longer a court of the kind contemplated by Ch III of the Commonwealth Constitution”. His Honour pointed out that the function given to the court under the legislation was very limited and he continued: “It is implicit within s 76 that the Commissioner is required to place before the court all of the information that he took into consideration. Consequently, the court is still able to exercise some form of genuine evaluative or adjudicative review (as to which see Fardon), initiated by the owner of the premises or by an interested person, even if it is one that is likely to be hampered by the inability of an applicant, to whom no, or limited, disclosure is made, to make any useful submissions, for example with respect to other matters that must also have been known by the Commissioner at the time at which he formed the required belief. It consequently seems to me that, accepting that aspects of the review process are antithetical to the ordinary judicial process, these are not such as to render the Supreme Court, as an institution, generally unfit to be a receptacle for the exercise of the judicial power of the Commonwealth, given the restricted nature of the right of review conferred by s 76 and the limited application of that section.”

Steytler P concluded that the legislation did not impact on the court’s institutional independence. It is appropriate to comment on some other authorities referred to by the plaintiffs. The Kable principle was applied in Re Criminal Proceeds Confiscation Act 2002. The Queensland Court of Appeal accepted a submission that s 30 of the Criminal Proceeds Confiscation Act was so inconsistent with the essential character of the exercise of judicial power that, given the reasoning in Kable, it was invalid.

The Act provided a procedure for the confiscation of unlawfully acquired property. Section 30 enabled a restraining order to be made so as to prevent any person from dealing with the subject property. Further conditions could be imposed, including conditions which authorised the disposal of the property. Section 30 provided that the Supreme Court must hear an application for a restraining order in the absence of the person whose property was the subject to the application and without that person having been informed of the application.

In concluding that s 30 was invalid, Williams JA (White and Wilson JJ concurring) said: “As already noted the initial order made on an application brought pursuant to s 28 affects significant property rights in that the property owner is prevented from dealing in any way with the property, and must subsequently discharge the onus of proving that the property the subject of the order was not illegally acquired property if it is to be released from the order. Further, and not without significance for present purposes, the Supreme Court in making the initial order must also be satisfied that the “public interest” is not such as to require the court to refuse to make the order. How could a judge possibly be so satisfied in the exercise of judicial power when the only entity entitled to place material before the court on which a judgment on that issue could be formed was the State? Similarly, how could a judge possibly determine whether or not it was appropriate to require the State to give an undertaking as to damages and costs when the only entity entitled to place material before the court was the State? Asking a judge to make a decision on such issues in those circumstances makes a mockery of the exercise of the judicial power in question. The statutory provision removes the essential protection of the citizen inherent in the judicial process. Effectively the provision directs the court to hear the matter in a manner which ensures the outcome will be adverse to the citizen and deprives the court of the capacity to act impartially.”

It is apparent from these remarks that the impugned legislation left almost no room for the application to be determined in the course of an appropriate exercise of judicial power. In my view there has been no such interference with the judicial function in the present case. The plaintiffs also relied on the decision of the Supreme Court of Canada in Charkaoui v Minister of Citizenship and Immigration [2007] SCC 9. In that case the court was required to rule on the constitutional validity of provisions in the Immigration and Refugee Protection Act 2001 which permitted detention without trial. The legislation enabled information to be put before the decision-maker and a judge on review which was not made available to the detainees.

The court held that these provisions suffered from defects which were inconsistent with s 7 of the Canadian Charter of Human Rights. Section 7 provides that a person cannot be deprived of liberty except in accordance with the principles of fundamental justice. The court stressed the importance of procedural fairness in a case in which the liberty of the subject is at risk. However, the fact that the case was decided on a specific provision of the Canadian Charter renders it of little value on the issue before this court. Reliance was also placed on VEAL v Minister for Immigration and Multicultural and Indigenous Affairs & Anor [2005] HCA 72 in support of a submission that the licensing authority should have disclosed the substance of the allegations in the present case to the plaintiffs. In VEAL the High Court held that, in the circumstances of the case, procedural fairness did not require disclosure to the appellant of a letter by an informer sent to the Department of Immigration and Multicultural and Indigenous Affairs and passed on to the Refugee Review Tribunal, but that there was a requirement to inform the appellant of the substance of the allegations. The submission that this approach should have been adopted in the present case ignores the unambiguous stipulation in s 28A that the classified information is not to be disclosed.

The present case

It is clear from the wording of s 28A that the legislature intended to make inroads into the requirements of procedural fairness to the extent indicated in the section. The legislation unequivocally authorises the licensing authority to have regard to information which is not available to an applicant. The requirement of the decision maker to provide reasons has also been modified in the manner previously described. The broad function of a judge exercising jurisdiction in the Licensing Court to review a decision of the Licensing Commissioner or to decide an initial application for a licence, can be described as judicial in nature and, of itself, it is not constitutionally incompatible in the sense discussed in the authorities. And, if it is the case that the legislature can remove or modify aspects of procedural fairness such as the right of access to all the material relied upon by the court and, in addition, can prevent the court from giving all the reasons for its decision, then these matters of themselves do not necessarily impose a role on the courts which is constitutionally incompatible in the sense under discussion Gypsy Jokers Motorcycle Club Inc v Commissioner of Police [2007] WASCA 49. That is not to say that, taken with other matters, such inroads into procedural fairness are irrelevant to the consideration of constitutional incompatibility. It is necessary to have regard to all aspects of the procedure under consideration in applying the relevant principles.

The licensing authority must decide whether to grant or revoke a licence or deal with the other applications referred to in s 28A. In doing so, it is required to consider all material placed before it. In the event that the Commissioner of Police provides classified material, the court or Licensing Commissioner must assess all the information before it and is not bound to act on any “criminal intelligence” supplied to it. Despite the fact that classified information cannot be tested or addressed by the other party, it is within the power of the licensing authority to determine its weight and, in appropriate cases, have regard to the fact that it may be unreliable suspicion or hearsay. It would also be entitled to have regard to the fact that the material has not been tested in any way. In these respects the authority acts in an independent manner. There is nothing in the procedure which leads to the creation of a close connection between the licensing authority and the executive. Nor is any inroad made into the independence of the licensing authority when determining the merits of an application resulting from “any instruction, advice or wish of the Legislature or Executive Government”.

I am also of the view that s 28A does not introduce a procedure of a political nature which is calculated to influence the discretion of the licensing authority. The applications to which s 28A applies are assessed in a judicial manner. There is no room for political bias to affect the court’s decision. By limiting access to information, the section places an applicant at a disadvantage. The licensing authority may be prevented from giving full reasons for its decision. These departures from established rules of fairness are of concern. However, as I have pointed out, it remains the duty of the licensing authority to assess the matter objectively and subject the classified material to scrutiny as part of the process.

In summary, therefore, I am of the view that the enactment does not impose on the Licensing Court a procedure which is constitutionally incompatible with its status as a court which is a potential repository of Federal jurisdiction. Furthermore, the legislation does not require a District Court judge to perform a non-judicial function. Even if the function could be described as non-judicial, it is not of such a nature as to be constitutionally incompatible with the role of a District Court judge.

The same reasoning applies to the situation where the Supreme Court is required to consider an appeal from a decision of a Licensing Court judge. I respectfully disagree with the view that the Supreme Court is placed in the position of upholding a breach of the rules of natural justice by the Licensing Court. As has been pointed out, Parliament may remove the requirement for a court to apply the rules of procedural fairness. In abiding by that law the court does not breach the common law rules. I would refuse to make the declarations sought by the plaintiffs and dismiss the application for judicial review.

VANSTONE J: I have had the benefit of reading the reasons, in draft, of each of Duggan J and Gray J. I agree with Duggan J that the application should be dismissed and I agree generally with his Honour’s reasons.

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