Davies v Smith

Supreme Court of NSW|2019-07-29|Before: Adamson J

Solicitors: Makinson d'Apice Lawyers (Plaintiff) Havas Legal (Defendant) File Number(s): 2018/148521

Introduction

By summons filed on 11 May 2018, Detective Sergeant Evan Davies (the plaintiff) sought a declaration pursuant to s 3 of the Restricted Premises Act 1943 (NSW) (the Act) in respect of premises of which Malcolm Smith (the defendant) is the registered proprietor and in which he presently lives with two of his grandsons and, from time to time, two of his sons. On 3 June 2019, the evidence in the matter was adduced and submissions made.

Conduct of the proceedings

At the substantive hearing of the summons on 3 June 2019, Ms Rogers submitted, in response to my question, that the effect of a declaration, if made, would be that the defendant would be able to return home to the "restricted premises" where he had lived for some decades but that if other reputed criminals "resorted" to the premises, he would be guilty of an offence under the Act. The following exchanges in the course of the plaintiff's oral submissions are sufficient to indicate the plaintiff's then position as to the effect of a declaration in the present case: "HER HONOUR: If I make the declaration, what happens then? What's the immediate effect of that? ROGERS: It allows police to go in without having to apply for a search warrant on a case-by-case basis. If you also make the order under 3(3), that the basis for that declaration is that reputed criminals are present, it is an offence against Mr Smith if those reputed criminals return to the premises. HER HONOUR: Where does that put him, because he's the person in control? ROGERS: Yes. HER HONOUR: Does that mean he can't go home, or how does it work? Because I mean, he's a reputed criminal, so-- ROGERS: It might be useful to actually look at the legislation in that regard. HER HONOUR: It says under 8(1), 'The owner is guilty of an offence if any of the conditions referred to in s 3(1) apply.' ROGERS: Right. HER HONOUR: So if we go back to 3(1), if we look at 3(1)(c), 'reputed criminals are to be found on the premises'. So if he just goes home, does that put him in breach of 3(1)(c)? ROGERS: I think the interesting thing about 3(1)(c) is that being found is sufficient to satisfy the first limb of the test, found or resort, but then it has to be, 'or are likely to resort again to the premises'. So 'resort', in my submission, means something more than being found there. It's using the premises to evade police arrest or search. In my submission, he would be entitled to go home, so long as the premises are no longer used to avoid police intervening and the premises are no longer used for the unlawful supply of drugs. HER HONOUR: That expression 'resort to', is that like a safe house to go back to? ROGERS: In my submission, there's some sense in that, in that it must be used not as a simple dwelling house, but as a place from which crimes are committed and there's some attempt to evade police." [Emphasis added.]
As I was unable to draft a declaration consistent with the provision of the Act which would have the effect for which the plaintiff had contended, I sought assistance from the parties on that issue. On 12 June 2019 I made orders directing the plaintiff to provide submissions as to the form of declaration he sought, having regard to submissions made by Ms Rogers, and listed the matter for further argument, including on the form of the declaration, on 29 July 2019.
On 22 July 2019 the plaintiff provided written submissions in accordance with my earlier directions. These submissions contained the following statements: "8. If the Court were to make a reputed criminal declaration in the form sought in the Application, it would render the Defendant criminally liable to prosecution for an offence under section 8 merely by being present in his residence or if any of the other current occupants entered the Premises. 9. In her decision of 12 June 2019, her Honour invited the Plaintiff, if he was able, to draft a form of declaration to be made under sections 3(1) and 3(3) of the Act which did not have the effect of making the defendant criminally liable to prosecution for an offence under section 8 of the Act merely by continuing to remain in occupation of the Premises or by continuing to allow Darren, Kobi or Callum Smith to reside there. 10. The Plaintiff submits that, while it may be possible to draft an order with this effect, the Court should not do so. 11. The legislation is clear in relation to the grounds required to be established for a Restricted Premises declaration, the circumstances in which a reputed criminal declaration should be made and the consequences of such a declaration."
When the matter came before the court on 29 July 2019, Mr Godkin sought an adjournment of the matter on the basis that it was only when the defendant received the plaintiff's further submissions on 24 July 2019 that the defendant appreciated that, if a declaration were made, he could lose access to his home. I granted the adjournment and directed the defendant to serve any submissions in response by 19 August 2019 and the plaintiff to serve any reply submissions by 2 September 2019. I stood the matter over for further hearing to 5 September 2019. On that day, the matter was listed before me at Parramatta, where I was conducting a criminal trial. The defendant did not appear by reason of his misapprehension as to the location. He did however attend the Court in Queens Square on that day. The plaintiff accepted that the matter ought be stood over to 24 September 2019 to give the defendant an opportunity to be heard.

Relevant legislative provisions

I set out the relevant legislative provisions in my earlier decision. However, for completeness, they are reproduced below.
The long title of the Act is as follows: "An Act to make provision for the declaration of premises and the closure of premises on which certain illegal activities are suspected of being carried on; and for purposes connected therewith."
Section 3 provides: "3 Declaration by Supreme Court or District Court in relation to premises (1) On a senior police officer showing reasonable grounds for suspecting that all or any of the following conditions obtain with respect to any premises, that is to say: (a) that drunkenness or disorderly or indecent conduct or any entertainment of a demoralising character takes place on the premises, or has taken place and is likely to take place again on the premises, or (b) that liquor or a drug is unlawfully sold or supplied on or from the premises or has been so sold or supplied on or from the premises and is likely to be so sold again on or from the premises, or (c) that reputed criminals or associates of reputed criminals are to be found on or resort to the premises or have resorted and are likely to resort again to the premises, or (d) that any of the persons having control of or managing or taking part or assisting in the control or management of the premises: (i) is a reputed criminal or an associate of reputed criminals, or (ii) has been concerned in the control or management of other premises which have been the subject of a declaration under this Part, or (iii) is or has been concerned in the control or management of premises which are or have been frequented by persons of notoriously bad character or of premises on or from which liquor or a drug is or has been unlawfully sold or supplied, . . . the Supreme Court or the District Court may declare such premises to be premises to which this Part applies. (2) Such declaration shall be in force until rescinded. (3) The appropriate Court may, in declaring premises to be premises to which this Part applies, state that the reason (or the predominant reason) for the declaration is that: (a) reputed criminals have attended or are likely to attend the premises, or (b) a reputed criminal has, or takes part or assists in, the control or management of the premises. Any such declaration is a reputed criminal declaration for the purposes of this Act."
Section 2 defines "reputed criminal" as follows: "reputed criminal includes (without limitation) a person who: (a) has been convicted of an indictable offence (including an offence under section 93X of the Crimes Act 1900), or (b) is engaged in an organised criminal activity within the meaning of section 46AA of the Law Enforcement (Powers and Responsibilities) Act 2002, or (c) is a controlled member of a declared organisation within the meaning of the Crimes (Criminal Organisations Control) Act 2012."
A "senior police officer" is defined in s 2 as meaning "a police officer of or above the rank of sergeant".
The effect of a declaration under s 3(2) or s 3(3) is that a search warrant is not required before police officers can enter premises. Further, after a notice under s 6 of the making of a declaration is served on the owner or occupier of the premises, the owner is guilty of an offence if any of the conditions referred to in s 3(1) apply to the premises while the declaration is in force: s 8(1). Because of its importance to the consequences of a declaration under s 3 of the Act, s 8 is set out in full. It provides: "8 Offence by owner of premises (1) After the service of a notice under section 6 on the owner of premises of the making of a declaration, the owner is guilty of an offence if any of the conditions referred to in section 3 (1) apply to the premises while the declaration is in force. Maximum penalty: 50 penalty units or imprisonment for 6 months, or both. (2) An owner of premises is not guilty of an offence under subsection (1) if the owner proves that he or she has taken all reasonable steps to prevent the conditions referred to in section 3 (1) applying to the premises. (2A) After the service of a notice under section 6 on the owner of premises of the making of a reputed criminal declaration, the owner is guilty of an offence if, while the declaration is in force, a reputed criminal: (a) attends the premises, or (b) has, or takes part or assists in, the control or management of the premises. Maximum penalty: 150 penalty units or imprisonment for 3 years, or both. (2B) An owner of premises is not guilty of an offence under subsection (2A) if the owner proves that he or she has taken all reasonable steps to prevent a reputed criminal: (a) attending the premises, or (b) having, or taking part or assisting in, the control or management of the premises. (2C) A person is not liable to be convicted of an offence under both subsections (1) and (2A) in respect of essentially the same facts. (3) An owner of premises that are occupied by a person other than the owner is not guilty of an offence under this section if the owner proves that he or she has taken all reasonable steps to evict the occupier from the premises."
The term "indictable offence" is defined by s 3 of the Criminal Procedure Act 1986 (NSW) as "an offence (including a common law offence) that may be prosecuted on indictment". A "summary offence" is an offence that is not an indictable offence: s 3 of the Criminal Procedure Act. Sections 5 and 6 of the Criminal Procedure Act have the combined effect that an indictable offence is one for which the maximum penalty is imprisonment for more than two years.
A declaration may be rescinded under s 4 of the Act on the application of the owner or occupier of the premises if the Court is satisfied that the conditions referred to in s 3(1) have ceased for a period of 12 months before the application is made and are unlikely to reoccur at the Premises. A senior police officer may apply for a declaration to be rescinded on proof that there is no reasonable ground for suspecting that any of the conditions referred to in s 3(1) obtain in relation to the premises.

Consideration

The plaintiff's unwillingness or inability to draft a declaration that would not deprive the defendant of the right to live in his own home is a powerful indication that it is not possible to do so. Accordingly, it would appear that the plaintiff's submissions to me on 3 June 2019 were incorrect.
Ms Rogers submitted, in effect, that I am obliged to make the declaration under s 3 of the Act. She further contended that disruption to the defendant's continued residence in the premises is not a relevant consideration in the exercise of the discretion whether to make a declaration. I understood the plaintiff to submit that to take into account the disruption to the defendant's continued residence at the premises would cause the discretion to miscarry: see Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24 at 40 (Mason J); [1986] HCA 40.
Mr Godkin submitted that, although the jurisdiction to make the declaration had been established, I have a discretion not to make the declaration which I should exercise in the present case. Mr Godkin contended that it was of significance that the premises in respect of which the declaration is sought is the defendant's family home where his grandsons and, from time to time, two of his sons, reside. He argued that, in effect, the defendant was providing a safe place for his relatives to live which was a form of rehabilitation and that to deprive them of this by making a declaration would amount to a form of extra-curial punishment.
Further, Mr Godkin submitted that the Act was not intended to apply to residential premises. In support of this submission, Mr Godkin relied on the following extracts from the Second Reading Speech for the Disorderly Houses (Commercial Supply of Prohibited Drugs) Bill 2002 (NSW) (New South Wales Legislative Council, Parliamentary Debates (Hansard), 20 November 2002 at 7101): "Police in Kings Cross in particular are concerned that they do not have effective powers to prevent managers from using their business as a cover for selling drugs to customers. . . . The intent of this bill is to provide police with an extra set of tools allowing them to effectively take action where there are reasonable grounds for suspecting that a drug is being illegally supplied from business premises. . . . If we are serious about the policing of organised criminals who use business premises to sell illegal drugs such as marijuana then police need to be given flexible and appropriate preventative tools. This is what is intended in this bill. . . . Businesses with a large volume and rapid turnover of customers offer an ideal cover for illegal drug supply. Large numbers of customers engaging in short transactions can be explained easily via reference to the legal product, such as coffee, being sold." [Emphasis added by Mr Godkin.]
Mr Godkin submitted that the amendments made by the Disorderly Houses (Commercial Supply of Prohibited Drugs) Bill were intended to "solve the issue of illegal drugs being sold by legitimate businesses" and were not intended to affect the right of a home owner to live in his or her dwelling.
In response, Ms Rogers submitted that the passages in the Second Reading Speech which were relied upon by the defendant were irrelevant since they related to the insertion of Part 2A into the Act, which made provision for closure of certain premises from which there were reasonable grounds for suspecting that prohibited drugs were supplied. She contended that the only part of the Act relevant to the present proceedings was Part 2 of the Act, entitled, "Disorderly Houses".
I am entitled to take into account extrinsic material in construing legislation whether or not there is an ambiguity: s 34 of the Interpretation Act 1987 (NSW). Extrinsic material, such as the Second Reading Speech, can be used to determine the meaning of a provision "if the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act . . . and the purpose or object underlying the Act . . .) leads to a result that is manifestly absurd or is unreasonable": s 34(1)(b)(ii) of the Interpretation Act. I accept Ms Rogers' submission that the Second Reading Speech does not address the effect or import of the provisions which are presently relevant. The operation of Part 2 of the Act is not confined to business premises. Nor is there any support in the wording of the legislation for any distinction between "business" premises on the one hand and "residential" premises on the other since plainly premises may be used not only for business purposes but also as a residence. Thus, no assistance can be gained from the Second Reading Speech for the Disorderly Houses (Commercial Supply of Prohibited Drugs) Bill.
The word "may" in s 3 of the Act imports a discretion: s 9(1) of the Interpretation Act; The Commissioner of Police v Tanos (1958) 98 CLR 383 at 390 (Dixon CJ and Webb J); [1958] HCA 6. However, in Sibuse Pty Ltd v Shaw (1988) 13 NSWLR 98, the majority (Priestley and McHugh JJA) said that proof of the continuance of at least one of the conditions in s 3 would, in most cases, require a declaration to be made. Their Honours reasoned that this consequence flowed in part from the wording of s 4, which sets out the circumstances in which a declaration will be rescinded: at 114 (Priestley JA) and at 119-120 (McHugh JA). McHugh J said at 120 that if a condition in s 3 has ceased to exist at the time of the hearing of the application, there would be a discretion not to make the declaration on that basis. His Honour continued at 121: "But if one of the conditions mentioned in s 3(1) still obtains at the hearingof the action and the owner or occupier intends to allow it to continue, it isdifficult to see how acting judicially a court can refuse to make thedeclaration. The jurisdiction under s 3(1)(e) exists to protect the public againstwhat the legislature perceives to be the evil of premises being habitually usedfor the purposes of prostitution. If, at the hearing, the premises are still beinghabitually used for prostitution to the knowledge of the occupier or owner,the intention of the legislature in inserting s 3(1)(e) must have been that thecourt should make a declaration."
McHugh J expressed his conclusion about the ambit of the proper exercise of the discretion at 123: "In my opinion if the relevant suspicion is made out and no other facts areproved, the purpose of the legislation requires that a declaration should bemade. If the evidence establishes that one of the conditions mentioned ins 3(1) obtained in relation to the premises, but the occupier or owner was notaware of it, it may be proper to refuse a declaration if the judge is satisfiedthat the condition has ceased and is unlikely to recur in the future. But insome cases it may be proper to refuse the declaration even if the condition islikely to recur provided that the owner and occupier have done everythingthey reasonably can to stamp out the condition. It is likely, for example, thatmany leading hotels and motels are habitually used for the purpose ofprostitution. Yet unless the owner or occupier has connived at the activities itwould be a proper exercise of the discretion to refuse a declaration.Moreover, even in cases where the owner or occupier was aware of thecondition it may be proper to refuse a declaration if the court is satisfied thatthe condition will not occur in the future. But once it is proved that acondition exists and that the occupier intends to continue it in the future, it isdifficult to see how the court can ever refuse to make a declaration. To treatthe existence of some further factor as a ground for refusing a declarationwould be to take into account a matter that is contrary to the scope andpurpose of the legislation. Finally, the commission of other offences or thestandard of behaviour on or in relation to the premises is not a relevantmatter to be considered." [Emphasis added.]
Although Priestley JA was also in the majority, his Honour decided the case on a narrower ground. His Honour nonetheless agreed that it would not be an appropriate exercise of discretion to refuse to make a declaration where the owner or occupier was taking part in the illegal activity (in that case, brothel-keeping or profiting from the prostitution of another) at the time of the application.
In the present case, I am satisfied that the conditions in s 3(1)(b), (c) and (d) exist and that there is no reason to suppose that they will not continue in the future. Although the Act does not distinguish between these conditions, there is a logical distinction between, on the one hand, the condition in s 3(1)(b) and, on the other, the conditions in s 3(1)(c) and s 3(1)(d). The condition in s 3(1)(b) relates, relevantly, to unlawful sale or supply of a drug from the premises and is therefore something which can change over time. By contrast, the conditions in s 3(1)(c) and (d) cannot be changed, without a change of residence or management and control since the defendant, his two sons, Darren Smith and Damien Smith Snr, and his three grandsons, Damien Smith Jnr, Kobi Smith and Callum Smith are "reputed criminals" by reason of the historical fact of their respective convictions for at least one indictable offence.
If the condition in s 3(1)(b) had not been made out, a nice question would arise whether it would nonetheless be appropriate to make a declaration, which could not be rescinded unless the defendant divested himself of his rights to possession, management and control of the premises because he would remain a reputed criminal.
I have also considered whether the express words of the Act are sufficient to override the usual benefits of ownership of property: the right to its use and enjoyment; the right to exclude others; and the right to alienate it: Milirrpum v Nabalco Pty Ltd (Gove Land Rights Case) (1971) 17 FLR 141 at 272 (Blackburn CJ). In the present case, if a declaration is made, the defendant will lose the first two of these rights in respect of property of which he is the registered proprietor. He will neither be able to use or enjoy it since mere entry will constitute a criminal offence under s 8 of the Act. Nor will he be able to exclude the police from entering it, since one of the effects of a declaration under s 3 of the Act is that no search warrant is required to authorise entry to the premises. It is a fundamental principle of statutory interpretation that clear words are required to abrogate common law rights: Al-Kateb v Godwin (2004) 219 CLR 562; [2004] HCA 37 at [19] (Gleeson CJ) and the authorities referred to in Electrolux Home Products Pty Limited v Australian Workers' Union (2004) 221 CLR 309; [2004] HCA 40 at [20]-[21] (Gleeson CJ). In my view the wording of the Act is sufficiently clear to indicate that it is intended to affect (and, in some cases, drastically curtail) the rights of owners and occupiers, who may be the same person.
At the conclusion of the hearing, Mr Godkin informed me that he had instructions to offer an undertaking on behalf of the defendant that the defendant would ensure that no criminal activity took place on the premises. I do not regard the undertaking offered as being sufficient to indicate that the condition in s 3(1)(b) (unlawful sale or supply of a drug from the premises) will not continue in the future, having regard to the evidence summarised in my earlier decision.
I am persuaded, on the basis of the plaintiff's submissions, that I am not entitled to take into account that a declaration will have the effect that the defendant, his sons and his three grandsons will no longer be entitled to live in the restricted premises and that the defendant, and those members of his family who reside in the premises, will, accordingly, lose the right to use and enjoy the defendant's home. That any rehabilitation that they may currently be undergoing (as to which no assumption can be made) may be derailed by a disruption to their residence does not, on the basis of Sibuse v Shaw, constitute a relevant factor in the discretion. There is nothing in the wording of the Act to indicate that the discretion would enable me to take into account the effect of a declaration on the defendant or members of his family or any public interest in neither dispossessing those with a settled home nor disrupting family units.
I have also had regard to the difficulty, if not impossibility, of the defendant ever being able to have the declaration rescinded under s 4 to permit him to reside in the premises again since his status as a reputed criminal is immutable.
The Act has been described as draconian: Sibuse v Shaw, at 109 (Street CJ). Its application in a case such as the present might be thought to meet that description. Nonetheless, I consider the statutory wording, as interpreted by the majority in Sibuse v Shaw, to require the result for which the plaintiff contended. As the plaintiff has established the basis for the exercise of the discretion and as there is no relevant countervailing factor which would weigh against its exercise in the present case, I am persuaded that the only proper exercise of my discretion is to make a declaration under s 3(1) of the Act, notwithstanding the dire effect of such a declaration on the defendant and his family.
The plaintiff also seeks a declaration under s 3(3) of the Act that the reason or the predominant reason for the declaration is that reputed criminals have attended or are likely to attend the premises or that a reputed criminal has, or takes part in, or assists in, the control of management of the premises. I do not regard these matters as constituting either the reason or the predominant reason for making the declaration since the plaintiff's reasonable grounds for suspecting that drugs have been unlawfully sold on and from the premises and are likely to be sold again on or from the premises constitute a significant reason for making the declaration. Although the plaintiff happens to fall within the definition of "reputed criminal" by reason of his conviction for a minor instance of an indictable offence which was dealt with summarily, this factor is relatively insignificant compared with the drug activity on the premises as evident from the evidence summarised in my earlier reasons. Accordingly, I refuse to make an application under s 3(3) of the Act.

Stay

A declaration under the Act is not a declaration as to existing legal rights. The making of the declaration will fundamentally change the defendant's legal rights and deprive him of access to real property of which he is the legal owner. As such, the conventional limitation on granting a stay of a declaration does not apply: cf. Young PW, Declaratory Orders (2nd ed, 1984, Butterworths) at [2408]. It will be necessary, in order to avoid criminal liability under s 8 of the Act, for the plaintiff at least to move away from the property. It need not be determined whether he is obliged to transfer his title to the property in order to relinquish control over the premises for the purposes of the Act. In any event, he ought be permitted some time to make other arrangements.
Mr Godkin sought a stay for a period of six months on the basis that the defendant had been living at the premises for many decades and had several animals and motor vehicles there as well as his personal effects. Ms Rogers informed me that the plaintiff consented to a stay for 60 days.
In the circumstances, I consider that the effect of the declaration ought be stayed for a period of 120 days to give him the opportunity to make arrangements for himself, his family and for the property.

Costs

The plaintiff seeks his costs of the proceedings. Although the plaintiff has largely been successful in obtaining the orders he sought in the summons, I am not persuaded that this is a case where the general rule that costs ought follow the event ought apply: Uniform Civil Procedure Rules 2005 (NSW), r 42.1. As set out above, in the initial hearing, the plaintiff submitted that the defendant's continued residence at the premises would not be disturbed by a declaration under the Act. I am satisfied that that submission was wrong as a matter of law. By reason of the plaintiff's conduct of the proceedings, it was necessary for the matter to be listed again, the premise of the plaintiff's original application having been revealed to be false. In these circumstances I am not satisfied that it would be appropriate to order the defendant to pay the plaintiff's costs of the proceedings.
The defendant appeared on his own behalf until the adjourned hearing on 29 July 2019. Mr Godkin appeared on that date and on 24 September 2019. In all the circumstances, the appropriate order is that there be no order as to the costs of the proceedings.

Orders

For the reasons given above, I make the following orders: 1. Declare under s 3(1) of the Restricted Premises Act 1943 (NSW) (the Act) that premises identified by NSW Land Registry Services as Lot 57 in Deposited Plan 244895, which is commonly known as 12 Nottingham Avenue, Castle Hill in the State of New South Wales, are premises to which Part 2 of the Act applies. 2. Stay the effect of the declaration for a period of 120 days. 3. Make no order as to costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 September 2019

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