Hardie Holdings Pty Limited et al v Director-General of the Department of... [2007] NSWLEC 39 | Case summary

Hardie Holdings Pty Limited et al v Director-General of the Department of... [2007] NSWLEC 39 | Case summary | Zoe

[23]

Mr Priestley's authority 6 It can be seen from s 36(2) that only the Director-General has the power to serve a notice under that section. Under s 48 of the NV Act, the Director-General may delegate any of the Director-General's functions under the Act, other than the power of delegation. 7 By an instrument of delegation dated 30 November 2005, the Director-General delegated a number of his powers and functions, including the power to "serve notice on a person requiring information or production of documents, under section 36 of the NV Act", to the Resource Compliance Manager. Mr Priestley was the Acting Resource Compliance Manager at the time that the notices were issued. However, s 48 of the Interpretation Act 1987 (NSW) states that if an act or instrument confers or imposes a function on a particular officer or the holder of a particular office, the function may be exercised by the person for the time being occupying or acting in the office concerned. 8 The applicants accept that Mr Priestley was duly authorised to "serve" the notices. Mr J M Ireland QC (with him Mr J B Maston), appearing for the applicants, submits however, that that is all that Mr Priestley was authorised to do. That is, he did not have authority to do more than "serve" the notices, namely, to deliver or present the notices. Mr Ireland submits that Mr Priestley's authority did not extend to the function of originating and issuing the notices. 9 In my opinion, however, the power to "serve" a notice must include the power to do all those things involving and preparatory to physical service, including drafting and issuing the notices. To limit the power to physical delivery of the notice would be an absurdity. Moreover, there is no need to delegate the function of physical delivery, since service in that limited sense is already authorised by s 49 of the NV Act, so that a delegation of the power to "serve notice" in the limited sense of delivery would be otiose. 10 I conclude, therefore, that Mr Priestley was duly authorised to perform the antecedent function of originating and issuing the notice which functions are a necessary component of the power to "serve notice".

[27]

(c) Moreover, the power under s 36 is an information gathering exercise, which continues to be available so long as a contravention of the NV Act remains possible. That is, the power is investigative, which is to be contrasted with orders under s 37 or directions under s 38. Finally, the definition of " relevant information " does not preclude a request for information or documents if the prospect of a contravention of the NV Act is more than a possibility. That is, once the threshold of a possibility is reached then a notice may be given, but the power to serve a notice does not cease once that threshold has been reached. 16 The applicants next submit that the notices require the production of documents which do not necessarily exist. Specifically, the notice served on Arlam Pty Limited requires the production, inter alia, of: ( 4) A map showing where and when anyone was authorised or directed by Hardie Holdings Pty Limited, Hardie Ayrefiled Pty Limited or Hardie Garnet Pty Limited to clear native vegetation on the land. (If no such map exists, prepare and submit a map.) 17 The answer to this submission is found in the text of s 36(2)(a). The Director-General may, by the notice, require a person to give "orally or in writing, signed by the person" any relevant information of which the person has knowledge. Obviously, if the information is oral then it does not exist in written form, and if it to be "in writing, signed by the person" then this clearly is yet to be prepared. This is to be contrasted with s 36(2)(b), which refers to the production of "any document containing relevant information". In other words, a request for information to which s 36(2)(a) applies is not limited to the production of documents which may already exist. 18 The applicants further submit that the notices require information for an extraneous, improper or collateral purpose, namely, to obtain ecological reports with the intent that such reports be obtained through the process of s 36 so as to avoid the Director-General incurring additional costs in investigating the contravention. 19 Support for the submission is contained in an internal memorandum dated 16 February 2006 from Mr Priestley to Mr Craig Abbs, Regional Director - Hunter. The report canvasses the prospect of exercising the power under s 36 of the NV Act in relation to the present applicants and lists the advantages and disadvantages of adopting such a course. One of the stated advantages in the memorandum is that it "negates the requirement for further expenditure by DNR to obtain expert reports, and allows for the available information to be incorporated into a proposed s 38 notice". 20 Further support for the submission is found in the notice which was served on one of the applicants, Harper Somers O'Sullivan Pty Limited, which I understand is a firm of consultants. That notice specifically requires production of the following document: "Harper Somers O'Sullivan (2005) Ecological Consultants Masterplan (ECMP) for Streetwater. Prepared for Hardie Holdings". 21 I accept the proposition that a power may not be exercised for an improper purpose. As submitted by Ms S A Duggan (who, with Mr M Seymour appears for the respondent), for it to amount to an improper purpose, the motivation for the exercise of the power must be the substantial purpose. I accept the test of substantial purpose stated in Samrein Pty Ltd v Metropolitan Water, Sewerage and Drainage Board (1982) 56 ALJR 678 at 679: …; it will be an abuse of the Board's powers if the ulterior purpose is a substantial purpose in the sense that no attempt would have been made to [exercise the power] if it had not been desired to achieve the unauthorized purpose: …. 22 The onus is thus on the applicants to show that the requirements to give the information and to produce the documents must have been for a purpose other than the legitimate purpose of investigating a possible contravention of the Act; that is, that it was a desire to obtain ecological reports and thereby save costs in investigating the possible contravention and if not, then no attempt would have been made to obtain the information or the documents required by the notices. 23 In the present case it is not contended that the ecological report is not a "document containing relevant information". To the extent that its production may save costs, this fact does not affect the validity of the notice if it is a document containing relevant information as authorised by s 36(2)(b). In another way, on the assumption that the document contains relevant information, the additional fact that the information is included in an ecological report which will negate the need for further expenditure to obtain such a report does not fail on the principle explained in Samrien. That is, the evidence does not satisfy me that no attempt would have been made to serve the notices if it had not been desired to achieve the unauthorised purpose. 24 I find, therefore, that the applicants' submission that the notices were issued for an improper purpose fails.

[41]

(c) As to the absence of any specified period of time, the notice must be understood as having effect subject to the NV Act , and s 36(2)(a) can only require information of which the recipient has knowledge: Hakim v Waterways Authority [2006] NSWCCA 376 at [117], [122]. 31 Mr Ireland in reply submits that it is critical for the notice to define the particular contravention of the Act of which the recipient is said to have knowledge. He further submits that the notice itself must be self-contained in the sense that recourse to surrounding circumstances should not be necessary. No authority, however, is cited in support of the submission, which appears to be contrary to the authorities to which I refer below. 32 I now turn to the authorities on the principles governing the content of statutory notices. In Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd (Smorgan case) (1979) 143 CLR 499 ("ANZ Banking") the High Court considered, inter alia, the form of notices given under s 264(1) of the Income Tax Assessment Act 1936 (Cth), which provided: 264(1) The Commissioner may by notice in writing require any person, whether a taxpayer or not, including any officer employed in or in connexion with any department of a Government or by any public authority - (a) to furnish him with such information as he may require; and (b) to attend and give evidence before him or before any officer authorized by him in that behalf concerning his or any other person's income or assessment, and may require him to produce all books, documents and other papers whatever in his custody or under his control relating thereto. 33 As to this power, Gibbs ACJ said (at 525): To be valid a notice to produce documents under s 264(1)(b) must of necessity identify with sufficient clarity the documents which are required to be produced. 34 Mason J, however, held that the Commissioner was entitled to make what was in effect a "roving enquiry" into the income of a taxpayer; or as Murphy J said (at 545), "[s]ection 263 enables the commissioner to "fish" for information. 35 According to Mason J (at 537): What para (1)(b) has in mind is that a notice may be given requiring the recipient to produce "all books, documents and other papers" in his custody or control "relating thereto", that is, to the income or assessment of the person whose name is stated in the notice. It is then for the recipient to decide for himself, difficult though the task may be, which of the documents answer the description. If his decision is wrong he exposes himself to prosecution and penalty.

[42]

The existence of this hazard is not a sufficient basis for the conclusion that the section requires the Commissioner to give a notice in such terms as would enable the recipient on reading it and on examining the documents in his custody or control to determine whether they fall within the ambit of the Commissioner's powers. To so hold would be to impose an impossible burden on the Commissioner. In many, if not most, cases he will be unaware of the contents of the documents of which he seeks production. … 36 The case was applied by the Full Court of the Federal Court in the Pyneboard case. The validity of notices issued by the respondent Chairman of the Trade Practices Commission pursuant to s 155 of the Trade Practices Act 1974 (Cth) was challenged. That section empowered the Chairman to serve notice on a person requiring the person to furnish information, produce documents, or give evidence "relating to a matter that constitutes, or may constitute, a contravention" of the Act. The Full Court (Northrop, Deane and Fisher JJ) held (at 570-571): The requirement that a notice under s 155(1) convey, with reasonable clarity, to the recipient what information he is required to furnish or what documents he is required to produce is not to be applied in a precious or hypercritical fashion (see, Melbourne Home of Ford Pty Ltd v Trade Practices Commission (No 3) (1980) 31 ALR 519 at 531). Artificial dissection, in the cause of determined obfuscation, can introduce an argumentative element of uncertainty into words which, when read reasonably in context, are adequate to convey a plain and clear meaning. Provided a notice makes it reasonably clear, in the circumstances in which it is given and on a fair reading of its terms, what information or documents are required, the requirements of s 155(1) as to clarity will be satisfied. In this regard, the mere fact that parsing and analysis in the artificial atmosphere of the courtroom can lead to the identification of a number of latent ambiguities will not invalidate what, as a matter of common sense, is reasonably clear. 37 Both the ANZ Banking case and the Pyneboard case were followed in Integrated Financial Group Pty Ltd v Australian Securities and Investments Commission (2004) 183 FLR 8, which was about a notice issued under s 33 of the Australian Securities and Investments Commission Act 2001 (Cth). That section enables the Australian Securities and Investments Commission to "give to a person a written notice requiring the production to a specified member or staff member, at a specified place and time, of specified books that are in the first-mentioned person's possession and relate to: (a) affairs of a body corporate; or (ab) affairs of a registered scheme; or (b) a matter referred to in any of paragraphs 31(1)(g) to (m), inclusive; or (c) a matter referred to in paragraph 32A(c) or (d)". 38 In Integrated Financial Group, Roberts-Smith J in the Supreme Court of Western Australia also referred (at 16 [63]) to the judgment of Bryson J in Currency Brokers (Australia) Pty Ltd v Corporate Affairs Commission (NSW) (1986) 5 NSWLR 483: In Currency Brokers , Bryson J thought there to be no reason to apply a strict or punctilious standard to a specification of documents to be produced. He considered it necessary to ask whether the specification is comprehensible or clear in that it can reasonably be understood so as to comply with it. 39 Roberts-Smith J adopted (at 17) the following approach as stated by Bryson J in Currency Brokers (at 489): Another important matter is the evident purpose of the provision to place effective investigative tools in the hands of the Commission. In the nature of investigation the person giving the notice and making the specification would often not be well informed, yet the process would be futile if this disabled him from giving a valid notice. 40 Roberts-Smith J also held (at 21) that such a notice is to be construed in the light of the circumstances in which it was given; and those circumstances may include the common knowledge and understanding of the person serving the notice and the recipient of the notice. 41 In applying these authorities to the present case, I am not persuaded that the notices are oppressive or that it is in excess of power under s 36 to give such notices. As stated in Pyneboard, the words of the notices must be read reasonably in their context, and the context includes the circumstances in which it is given. Moreover, to require the notice to specify with particularity the documents or the information required would, as stated by Mason J in the ANZ Banking case, impose an impossible burden on the person serving the notice, since he will be unaware of the particular documents or the relevant information until they and it are produced. To hold otherwise would, as Mason J also observed, frustrate the object of the section. Moreover, as Bryson J observed in Currency Brokers, in the nature of investigation the person giving the notice would often not be well informed, yet the process would be futile if this disabled her or him from giving a valid notice. 42 It is to be noted that the Director-General is entitled to make a roving enquiry as described by Mason J in the ANZ Banking case, or, as was said by Murphy J in the ANZ Banking case, to fish for information. This is to be contrasted with notices to produce and subpoenas, under which such inquiries are not permitted. 43 No evidence was led to show that the notices in the hands of the recipients were not comprehensible or could not reasonably be understood, as to not enable them to be complied with. 44 It follows that the applicants' claims for declaratory and consequential relief must be refused.

Hardie Holdings Pty Limited et al v Director-General of the Department of Natural Resources

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