AVS Group of Companies v Commissioner of Police

CATCHWORDS : ADMINISTRATIVE LAW - construction of s 29(3) Security Industry Act 1997 - whether question for separate determination pursuant to Part 28 rule 28.2 Uniform Civil Procedure Rules - whether question of law - whether circumstances sufficiently unusual to warrant removal into Court of Appeal - whether special circumstances exist - removal of one set of proceedings to Court of Appeal pursuant to Part 1 rule 1.21 of the Uniform Civil Procedure Rules

Security Industry Act 1997, s 26(1A), 29(3) LEGISLATION CITED : Civil Procedure Act 2005, s 56, 57, 58 Uniform Civil Procedure Rules, r 28.2, 1.21(1)(a),(b),

AVS Group of Companies Pty Ltd v Commissioner of Police [2010] NSWCA 81 AVS Group of Companies Pty Limited and Ors v Commissioner of Police and Anor [2010] NSWSC 109 CASES CITED : AVS Group of Companies Pty Ltd v Commissioner of Police [2010] NSWSC 447 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 William v Bill Williams (1971) 1 NSWLR 547 Stewart v Ronalds [2009] NSWSC 455

AVS Group of Companies - First Plaintiff Peter Sleiman - Second Plaintiff (in 2010/110137) PARTIES : Tony Sleiman - Second Plaintiff (in 2010/112096) Commissioner of Police - First Defendant Administrative Decisions Tribunal - Second Defendant

COUNSEL : Mr K Oliver - Plaintiffs Dr J Griffiths SC and Mr T Lynch - First Defendant

SOLICITORS : AJL Legal Crown Solicitor's Office

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

2010/112096 AVS Group of Companies Pty Ltd v Commissioner of Police

2010/110137 AVS Group of Companies Pty Ltd v Commissioner of Police

1 HIS HONOUR: By amended notices of motion the first defendant, the Commissioner of Police, New South Wales (the Commissioner), relevantly seeks in each set of proceedings the following orders: "1…

2. That, pursuant to Part 28 Rule 28.2 Uniform Civil Procedure Rules, the following question be heard and determined separately in the proceedings:

On a proper construction of s. 29(3) of the Security Industry Act 1997 and having regard to the events that have occurred is the Commissioner of Police obliged to approve the plaintiffs' proposal that they be represented by a "Special Advocate" in the proceedings in the Administrative Decisions Tribunal.

3. That, pursuant to rule 1.21 of the Uniform Civil Procedure Rules, these proceedings be removed into the Court of Appeal.

4. Such further or other order as the court thinks fit."

2 The plaintiffs oppose the orders that are sought. Should it be necessary to separately identify each of the proceedings, I will refer to them as the Peter Sleimanproceeding and the Tony Sleimanproceeding. 3 The background to these proceedings is detailed in the plaintiffs' chronology of events (MFI A) and is unnecessary to fully recount here. The genesis of the disagreement between the parties is found in the revocation by the Commissioner of the plaintiffs' security licenses pursuant to s 26(1A) Security Industry Act 1997 (SI Act) on the grounds that the plaintiffs were not fit and proper persons to hold the licenses. Upon the plaintiffs' applications to the Administrative Decisions Tribunal for review of those revocation decisions, the Tribunal made orders that had the effect of re-instating the licenses pending the determination of the review applications. There have subsequently been numerous interlocutory decisions by the Tribunal and the Appeal Panel of the Tribunal, various interlocutory decisions and final decisions by this court and a decision of the Court of Appeal: see AVS Group of Companies Pty Ltd v Commissioner of Police[2010] NSWCA 81. 4 It is convenient to mention here the proceedings before Schmidt J in which the Peter Sleiman plaintiffs sought declaratory relief in relation to a "special advocate" process which they sought to have adopted in the Peter Sleiman proceeding in the Tribunal: see AVS Group of Companies Pty Limited and Ors v Commissioner of Police and Anor [2010] NSWSC 109. 5 Her Honour relevantly said: "67 In this case there is evidence of a request to consent to disclosure on a basis which seeks to ensure that the confidentiality of the information which the Security Industry Act seeks to protect, will be maintained. Section 29(3) gives the Commissioner a discretion to agree to the proposed procedure. It seems clear that the section contemplates that consent would be forthcoming, if the Commissioner were satisfied that what is proposed would preserve the confidentiality of the criminal intelligence which the section is designed to protect. The Commissioner's response to the request for consent was that he would not engage in such a process. There was no suggestion that the refusal was based on any view that the procedure was an inadequate way of ensuring that the confidentiality of the material was maintained. There was also no response to the request for advice as to any alteration to what was proposed, which would result in consent being given, although in these proceedings it became apparent that if the special advocate was to be appointed by the Attorney General, the Commissioner would not have an objection to the process.

68 I am satisfied that the inference that the Commissioner failed to consider whether the proposal adequately protected the confidentiality of the confidential information is fairly open on the evidence. The submission that s 29(3) was intended to give the Commissioner a forensic advantage in proceedings before the Tribunal reinforces that conclusion. That is not the purpose of the section. The Commissioner acting on such an understanding could not involve a proper and valid exercise of the discretion granted by the section. ... 71 Section 29(3) of the Security Industry Act is not merely concerned with the Commissioner's position as a party to proceedings before the Tribunal. Rather, it is concerned with the disclosure of criminal intelligence in such proceedings. That is undoubtedly a matter of significant public interest, for reasons discussed in Gray . The purpose of the discretions granted the Commissioner in s 29(3) are also undoubtedly an important part of the statutory scheme, especially given the disadvantage which can flow to parties who are denied access to information on which the Commissioner acts to their detriment under s 15 of the Security Industry Act . The Commissioner's discretions provide a basis upon which such disadvantage may be ameliorated, by agreement, when the statutory purpose of the protection of criminal intelligence will not be undermined by the consent given. … 74 In the circumstances, it is appropriate to make certain but not all of the orders and declarations proposed for the plaintiffs. I am satisfied that the Tribunal may not appoint a special advocate, under this statutory scheme, but the plaintiffs may. With the Commissioner's consent, the confidential exhibit maybe [sic] disclosed to the special advocate. The Commissioner must give the plaintiffs' proposal consideration, as the Security Industry Act requires."

"1. A declaration that the proposed "special advocate" procedure is a procedure that the Administrative Decisions Tribunal is empowered in its lawful discretion to adopt for the hearing of the pending Tribunal proceedings, subject to the special advocate being appointed by the plaintiff and the approval of disclosure of the confidential exhibit to the special advocate being given by the first defendant pursuant to s 29(3) of the Security Industry Act 1997.

2. A declaration that the first defendant is required by law to consider and determine according to law any application or proposal for his approval, pursuant to s 29(3) of the Security Industry Act 1997, of the proposed "special advocate" procedure that has been made, or shall at any time be made, in connection with the pending Tribunal proceedings by or on behalf of the plaintiffs, or any of them.

4. That the first defendant consider the plaintiffs' application for the disclosure of the confidential exhibit to the special advocate under the provisions proposed by the plaintiffs, according to law.

5. That the first defendants pay the plaintiffs' costs of the proceedings. 7 The Commissioner on the 26 March 2010 filed in the Court of Appeal a Notice of Intention to Appeal against the orders of Schmidt J. On 15 April 2010, the Commissioner applied to the Tribunal to have the 'stay' orders lifted. The applications were set down for hearing on 14 May 2010. 8 On 4 May 2010, the Peter Sleimanplaintiffs filed a summons in this Court seeking declarations and further orders. Prayer 4 of the summons is as follows: "A declaration that the first defendant is bound, as a matter of law, to approve pursuant to s 29(3) of the Security Industry Act 1997:

(a) disclosure to the special advocate to be appointed by the plaintiffs, namely, Mr Antony Whitlam QC, of the confidential exhibit referred to in paragraph 75(2) of the reasons for judgment of her Honour Justice Schmidt dated 26 February 2010 in proceedings 2009/298022; and

(b) the presence and participation of that special advocate at any closed hearing that may be conducted by the second defendant in proceedings 093202." 9 On 6 May 2010, the Tony Sleimanplaintiffs filed a summons in this court seeking declarations and further orders. Prayer 6 of the summons is as follows:

" A declaration that the first defendant is bound, as a matter of law, to approve pursuant to s 29(3) of the Security Industry Act 1997:

a. disclosure to the special advocate to be appointed by the plaintiffs, namely, Mr Antony Whitlam QC of any relevant secret material; and

b. the presence and participation of that special advocate at any closed hearing (including any interlocutory hearing) that may be conducted by the second defendant in determining the pending Tribunal proceedings." 10 In AVS Group of Companies Pty Ltd v Commissioner of Police [2010] NSWSC 447, Davies J on 13 May 2010 made orders restraining any hearing of the Commissioner's applications to revoke the 'stay' orders until the conclusion of the hearing of the summonses for declaratory relief. The summonses were listed for an expedited hearing on 22 and 23 June 2010. Should the Commissioner succeed on the present motions, the hearings will not proceed. 11 The Commissioner on 26 May 2010 filed and served a summons for leave to appeal from the decision of Schmidt J. Ground 2 of the draft Notice of Appeal provides: "Her Honour erred

(1) in finding that s.29(3) SIA required that the Commissioner would consent to the disclosure referred to in 1(1) above, if he were satisfied that the proposal for a special advocate would preserve the confidentiality of the material to which s.29(3) SIA applies,

(2) in not finding that even if the Commissioner were so satisfied, s.29(3) SIA did not require the Commissioner to approve of any such disclosure and participation." 12 The summons for leave to appeal is listed for return on 5 July 2010. 13 The plaintiffs' applications for review are fixed for a final hearing in the Tribunal on a date not earlier than 14 July 2010. 14 Dr Griffiths SC for the Commissioner submitted that the essence of each summons for declaratory relief is a challenge to the Commissioner's refusal to approve the special advocate procedure. He contended that there is a substantial overlap in the issues which the Commissioner seeks to be heard in the Court of Appeal if leave to appeal is granted and the issues which are to be determined in this court next week. Dr Griffiths said that the issue which is at the heart of both sets of proceedings is whether on the proper construction of s 29(3) SI Act and on the facts of these matters, the Commissioner has no discretion but is obliged to approve the plaintiffs' proposed special advocate arrangement. The formulation of the special question, Dr Griffiths put to me, reflected what the Commissioner apprehended to be the core issue in each summons and on appeal from the decision of Schmidt J. The Commissioner's rationale for seeking the transfer of the proceedings into the Court of Appeal was to bring a degree of co-ordination between the hearing of the appeal and the judicial review applications and to endeavor to save time, money and resources by bringing into the Court of Appeal two sets of proceedings which substantially overlap in terms of their legal issues. It was submitted that the proper construction of s 29(3) SI Act was of significant public interest because of the unusual nature of the power as well as being of importance to the Commissioner in the continuing exercise of his powers under the SI Act and to the plaintiffs in the operation of their businesses. 15 Mr Oliver, counsel for the plaintiffs, submitted that the proposed question is not a question that is proper for a separate question in either proceedings. Mr Oliver contended that it was doubtful whether a question that is to be determined "having regard to the events that have occurred" constitutes "a question of law" for the purposes of r 1.21(1)(a) Uniform Civil Procedure Rules 2005 (UCPR). He told me that in the Peter Sleiman proceeding the existence of secret material is a fact that had been disclosed to the plaintiffs whereas in the Tony Sleiman proceeding it was very much in issue whether the Commissioner, by entertaining an application for disclosure of material to the special advocate, impliedly disclosed the existence of information capable of disclosure to the special advocate. Mr Oliver argued that the referral up of the proposed question is indistinguishable from the referral up of the entirety of the dispute between the parties. It would include the necessity to make findings of fact and once that becomes apparent, the court was bound to consider that r 1.21(1)(a) UCPR has not been enlivened. Mr Oliver submitted that the Peter Sleiman proceeding was simply an attempt to obtain enforcement of the judgment of Schmidt J which was founded upon her Honour's reasons at [67]. He referred to the Crown Solicitor's letter dated 23 April 2010 (Affidavit of Stefano Laface annex 225 - 226) which purported to state reasons for the refusal of the special advocate procedure and put to me that the proposed separate question necessarily raised questions of fact. Mr Oliver contended that the proposal to state a separate question was an attempt to make it appear that the court's power under r 1.21(1)(a) had been enlivened so that the Commissioner was not required to establish special circumstances under r 1.21(1)(b) UCPR. 16 Mr Oliver argued that the suggested issues in common did not require determination in the present proceedings. All of the suggested issues had been decided by Schmidt J in the Peter Sleiman proceeding and her Honour's determination was presumed to be correct. The Commissioner's concern, Mr Oliver put to me, was not that the questions of law affecting the exercise of his statutory powers had not been judicially determined but that they had been determined in terms with which the Commissioner disagrees. Mr Oliver said that there is every likelihood that leave to appeal against Schmidt J's decision was unlikely to be granted as leave to appeal was sought on the very last day that it was permissible to do so without extension of time and at a time when the Commissioner had actually purported to comply with the orders that are the subject of the proposed appeal. Whilst the plaintiffs agreed that the issues that arise are important, it was submitted they did not constitute "special circumstances" justifying removal under rule 1.21(1)(b) UCPR. Mr Oliver said that the "extreme likelihood of appeal" was not a sufficient ground to establish "special circumstances" justifying removal. It was contended that the plaintiffs would be prejudiced by the removal of the proceedings into the Court of Appeal as there was no guarantee that the proceedings would thereafter be expedited. The relief sought in the summonses for declaratory relief was crucial to the final hearing in the Tribunal in July and the plaintiffs would be severely prejudiced if they were forced on to a final hearing without the benefit of a special advocate. 17 Part 1 r 1.21 UCPR provides: "(1) The Supreme Court in a Division may, in relation to proceedings commenced in the Division, make an order that the proceedings be removed into the Court of Appeal:

(a) if it makes an order under rule 28.2 for the decision of a question of law, or

(b) if, having stated the question to be decided or determined, it is satisfied that special circumstances exist that render it desirable to make an order for their removal into the Court of Appeal." 18 The question to be decided is confined to one of law: Pt 1 r 1.21(a) UCPR. It is generally accepted that questions that turn on disputed facts should not be determined separately: Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334. In any event, where findings of fact are involved, the decision on the question would not be on a question of law only: William v Bill Williams (1971) 1 NSWLR 547 at 557. 19 The separate question that the Commissioner seeks pursuant to Pt 28 r 28.2 is as follows: "On a proper construction of s 29(3) of the SI Act and having regard to the events that have occurred is the Commissioner of Police obliged to approve the plaintiffs' proposal that they be represented by a "Special Advocate" in the proceedings in the Administrative Decisions Tribunal." 20 I do not agree with the plaintiffs' contention that the proposed question in the Peter Sleiman proceeding may involve findings of fact. The relevant facts, it seems to me, have been found by Schmidt J in her judgment. I do not think that the Crown Solicitor's letter dated 23 April 2010 raises any factual matters of consequence. I am satisfied that the question as framed is confined in the Peter Sleimanproceeding to a question of law and is suitable for separate determination. 21 The position, however, is different in the Tony Sleimanproceeding, as there have been no findings of fact by a primary judge. Dr Griffiths placed some reliance upon what was said by Mr Lynch at the directions hearing in the Tribunal on 16 April 2010 that "there is no evidence in respect of which a special advocate could be appointed because there has been no disclosure of the existence of 29(3) material in Group Australia." An important factual dispute, I understand, is whether there has in fact been disclosure of the existence of s 29(3) material by the Commissioner. Findings of fact will need to be made so that regard might be had "to the events that have occurred." The question as framed is not confined in the Tony Sleimanproceeding to a question of law and is not suitable for separate determination. 22 Although in the Peter Sleimanproceeding a finding that special circumstances exist rendering it desirable to make an order for the removal of the proceedings into the Court of Appeal is now not required, the Court must be satisfied that there are at least sufficiently unusual circumstances that warrant their removal: Stewart v Ronalds [2009] NSWSC 455. It is common ground that the likelihood of appeal is not sufficient to justify removal. 23 There exists in the Court of Appeal in the Peter Sleimanproceeding the summons for leave to appeal from the decision of Schmidt J which concerns the proper construction of s 29(3) SI Act. The question as framed, in my view, fits neatly into those matters raised in the Notice of Appeal. The declaration sought in Prayer 4 of the summons is dependent upon the proper construction of s 29(3) SI Act. Although the likelihood of appeal is by itself not sufficient to justify removal, it seems to me, that in the present case where there is a strong likelihood of appeal from the decision of the judge at first instance and there are pre-existing proceedings in the Court of Appeal which raise issues within the same legal matrix, the overriding purpose of the Civil Procedure Act and UCPR "to facilitate the just, quick and cheap resolution of the real issues" and the dictates of justice are best served by their removal: ss 56-58 Civil Procedure Act 2005. I give little weight to the plaintiffs' submission that leave to appeal from the judgment of Schmidt J is unlikely to be granted. I consider that the balance of convenience favours the removal of the Peter Sleimanproceeding into the Court of Appeal. 24 A finding of special circumstances is required in the Tony Sleimanproceeding: Pt 1 r 1.21(1)(b) UCPR. I accept that the threshold for such a finding is high. The declaration sought in Prayer 6 of the summons raises the same issue as that posed in Prayer 4 of the Peter Sleiman summons - ie, whether the Commissioner is bound, as a matter of law, to approve pursuant to s 29(3) SI Act disclosure of any relevant secret material to the special advocate. This issue is encapsulated in the separate question for determination in the Peter Sleimanproceeding. 25 The proper construction of s 29(3) is a common issue in each set of proceedings and in the application for leave to appeal. 26 The correct construction of s 29(3) is, to my mind, a matter of significant public importance. It is of importance to the Commissioner in the continuing exercise of power to refuse a license application and also raises important considerations of procedural fairness. As was observed by Campbell JA in AVS Group of Companies Pty Ltd v Commissioner of Police[2010] NSWCA 81 at [70]:

"In Commissioner of Police v Gray , McColl JA recognised, at [75], that "s 29(3) impinges upon ordinary principles of natural justice." That is, if I may say so respectfully, a very restrained way of putting it. The effect of s 29(3) is that, in those activities of the Tribunal concerning which it applies, the Tribunal is required to make a decision that may well affect an applicant for review in a serious way and result in the applicant losing his or her livelihood, without the existence or contents of some of the evidence against the applicant being disclosed to the applicant, and hence without the applicant having any opportunity to test, counter or qualify that evidence, or to make submissions about its significance. The question now before the court involves whether the meaning of the words of s 29(3), properly understood, is such that that consequence arises concerning an application for a stay."

27 A significant countervailing factor against removal, however, is that the Court of Appeal may be required to make findings of fact. For that reason, the balance of convenience does not favour, in my opinion, the removal of the proceeding into the Court of Appeal. The correct construction of s 29(3) will be determined in the Peter Sleimanproceeding. Accordingly, I do not find special circumstances.

28 It is self evident that the summons for declarations and orders in the Tony Sleiman proceeding should not be heard next week. The lack of coordination in the appeal proceedings which was criticised by Basten JA at [32] in AVS Group of Companies Pty Ltd v Commissioner of Police would be seriously exacerbated if it did. I propose to stay this proceeding until the final determination of the Peter Sleimanproceeding and the appeal from Schmidt J in the Court of Appeal. 29 The Commissioner has undertaken to promptly seek expedition of the hearing of the removed proceedings in the Court of Appeal and to seek to have the proceedings heard with the appeal from Schmidt J. The plaintiffs' fears of prejudice arising from the proposed orders will be alleviated by continuing the orders made by Davies J on 13 May 2010 and by a stay of the final hearing in the Tribunal. Orders

30 I make the following orders in proceeding no 2010/110137, the Peter Sleimanproceeding. 1. Pursuant to Pt 28 r 28.2 Uniform Civil Procedure Rules, the following question be heard and determined separately in the proceeding: On a proper construction of s 29(3) of the SI Act, and having regard to the events that have occurred, is the Commissioner of Police obliged to approve the plaintiffs' proposal that they be represented by a Special Advocate in the proceedings in the Administrative Decisions Tribunal. 2. Pursuant to Pt 1 r 1.21 of the Uniform Civil Procedure Rules, these proceedings be removed into the Court of Appeal.

3. I order that the hearing dates of 22 and 23 June 2010 be vacated. 4. I continue the orders made by Davies J on 13 May 2010 until the final determination in the Court of Appeal of these proceedings no 2010/110137 and proceedings no 2009/298022 - the appeal from Schmidt J. 5. I order that the final hearing of the plaintiffs' application for review in the Administrative Decisions Tribunal be stayed until the final determination in the Court of Appeal of these proceedings no 2010/110137 and proceedings number 2009/298022 - the appeal from Schmidt J.
4. Costs are to be costs in the cause.

31 In proceedings no 2010/112096, the Tony Sleimanproceeding,

1. I order that the hearing dates of 22 and 23 June 2010 be vacated. 2. I order that these proceedings be stayed until the final determination in the Court of Appeal of proceedings no 2010/110137 - the Peter Sleiman proceeding - and proceedings no 2009/298022 - the appeal from Schmidt J. 3. I continue the orders made by Davies J on 13 May 2010 until the final determination in the Court of Appeal of proceedings no 2010/110137 - the Peter Sleiman proceeding, and proceeding no 2009/298022 - the appeal from Schmidt J. 4. I order that the final hearing of the plaintiffs' application for review in the Administrative Decisions Tribunal be stayed until the final determination in the Court of Appeal of proceedings no 2010/110137 - the Peter Sleiman proceeding and proceedings no 2009/298022 - the appeal from Schmidt J.
2. Costs are to be costs in the cause.

22/06/2010 - Typographical error - Paragraph(s) 3

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