Valkai v Commissioner of Police, NSW Police Service

1 This is an appeal by the Commissioner of Police against a decision of the General Division of the Tribunal setting aside the Commissioner's decision to revoke the security industry licence of the review applicant, Mr Frank Valkai, who is now the respondent to the appeal: Valkai v Commissioner of Police , NSW Police Service [2001] NSWADT 63 (Gen Div., 23 April 2001). There is a right of appeal on a question of law to the Appeal Panel of the Tribunal (Administrative Decisions Tribunal Act 1997, s 113(2)). 2 The Commissioner by notice of appeal filed 21 May 2001 submits that two errors of law occurred, one of statutory construction, the other in relation to procedural fairness. The Commissioner was represented by Mr Capper, advocate, Legal Services, NSW Police Service and Mr Valkai by Mr Noble, solicitor, Clayton Utz on a pro bono basis. There were written submissions from Mr Capper, and for Mr Valkai, from Mr Hillard, solicitor, Clayton Utz. The submissions for the respondent conceded a failure of procedural fairness. They contested the first ground, submitting that there was no error of statutory construction. 3 In this case the Commissioner had revoked Mr Valkai's security industry licence (class 1A, patrol, etc; 1B, bodyguard; 1C, crowd controller, etc) following conviction by the Local Court for an offence 'payment knowingly obtained where not payable' under s 1347 of the Social Security Act 1991 (Cth). 4 The Commissioner's power to revoke a security industry licence is conferred by s 26 of the Security Industry Act 1997 (the Act). In this case three of the grounds provided for by s 26(1) for revoking a licence were relied upon by the Commissioner. 5 The first two grounds are set out in s 26(1) at paras (a) and (c), while the third ground (para d) can be any 'prescribed' ground. The prescribed ground relied upon is found in cl 18 of the Security Industry Regulation (the Regulation). The Tribunal's decision in so far as it did not affirm the Commissioner's reliance on the second ground (ground (c)) and third ground (ground (d)) is not in issue. 6 The focus of the appeal is the construction given to the first ground. Section 26(1)(a) provides: 'A licence may be revoked: for any reason for which the licensee would be required to be refused a licence of that class …'. 7 The reason that the Commissioner purported to rely on was the ground of refusal provided by s 16(1)(a) which provides: ' (1) The Commissioner must refuse to grant an application for a licence if the Commissioner is satisfied that the applicant: (a) has, within the period of 10 years before the application for the licence was made, been convicted in New South Wales or elsewhere of an offence prescribed by the regulations, whether or not the offence is an offence under New South Wales law, or …'. 8 Under the Regulation a prescribed offence includes an offence under the law of any Australian jurisdiction involving 'fraud, dishonesty or stealing' being an offence in which the maximum penalty is imprisonment for 3 months or more. There was no dispute in this case that Mr Valkai's offence was one falling within the prescribed category. 9 The primary issue giving rise to the appeal relates to the Tribunal's conclusion that as the conviction had not occurred prior to his last application it could not be considered as a ground for revocation. 10 The reasoning material to this appeal is set out in [38] - [39] of the reasons for the decision, as follows: '38 The s 26(1)(a) discretion provides that a licence may be revoked for any reason for which the licensee 'would be required to be refused a licence of that class'. Section 16 provides the bases on which the Commissioner must refuse to grant an application for a licence. These include where a licence holder has, within the period of 10 years before the application for the licence was made, been found guilty of a prescribed offence in NSW. 39 Interpreting s. 26(1)(a) strictly, the discretionary power to revoke arises if the licensee has, within the relevant period before the application for the licence was made , been found guilty of a prescribed offence in NSW. This power provides for the situation where a person has been granted a licence yet they should not have been because they had been found guilty of a prescribed offence at the time of the licence application. This power provides for revocation in circumstances such as where, at the time the decision to grant a licence is taken, the Commissioner's records are incomplete or the searches undertaken are inaccurate or the licensee provided incorrect information. See for example the previous Tribunal decisions of Tran v Commissioner of Police, New South Wales Police Service [2000] NSWADT 18, Fenton v Commissioner of Police, New South Wales Police Service [2000] NSWADT 16, Howells v Commissioner of Police, New South Wales Police Service [2000] NSWADT 120 and Price v Commissioner of Police, New South Wales Police Service [2000] NSWADT 127. 40 The s 26(1)(a) power therefore is to revoke or not to revoke if the licensee had been found guilty but not convicted of a prescribed offence during the relevant period before the application for the licence was made. In my view the power to revoke cannot be exercised where there was no guilt of the relevant kind at the time the licence application was made. This construction of s 26(1)(a) differs from the approach taken by the Tribunal in the decision of Botros v Commissioner of Police, NSW Police Service [2000] NSWADT 6. 41 I had not formed this view on s 26(1)(a) until after the hearing and so there was no opportunity to raise it with the parties to invite their views. 42 As I have previously noted in the decisions of Jasim -v- Commissioner of Police, New South Wales Police Service [2001] NSWADT 45 and Tafengatoto -v- Commissioner of Police, New South Wales Police Service [2001] NSWADT 40 , it is possible to conceive of several circumstances which could lead to the anomalous situation where a licensee might be able to retain his or her licence for the licence's duration despite the licensee having recently committed a prescribed offence. Mr Valkai's circumstances would appear to fall into one of the examples, namely, the situation where a person has been granted a licence yet it is subsequently proven they had committed a prescribed offence before the licence application had been made. 43 In my view, in relation to interpreting and applying legislation, a circumstance or outcome can be considered anomalous if the legislation allows it to prevail in that there is no provision by which the circumstance can be addressed. 44 I consider that there is power within the Act to address at least some of these otherwise potentially anomalous circumstances. Where a person has been found guilty of an offence subsequent to the application and granting of his or her licence, such as Mr Valkai, there are relevant powers to revoke the licence and these are found in s 26(1)(c) or s 26(1)(d) of the Act.' 11 The logic of the Tribunal's reasoning as to the interpretation to be given to s 26(1)(a) is as follows. When carrying out his duty under s 16(1)(a) in relation to applications the Commissioner can only refuse an application where a prescribed conviction has occurred within the defined period prior to the application. Consequently in exercising a power to revoke 'for any reason for which the licensee would be required to be refused a licence of that class' the reason must concern a prescribed conviction that occurred prior to an application . 12 The Tribunal noted that this construction of s 26(1)(a) differs from the approach taken by the Tribunal (differently constituted) in the decision of Botros v Commissioner of Police, NSW Police Service [2000] NSWADT 6. In that case the Commissioner had revoked a current licence in circumstances where the applicant had (5 weeks after his last renewal) been convicted of an offence of stealing a substantial amount of money that he was responsible for guarding in the course of his duties. The Tribunal saw it as obvious that s 26(1)(a) could be applied to these circumstances by the Commissioner, and did not deal with its interpretation in any detail. It said: '22 In this case if the applicant had committed the offence before applying for the licence granted on 4 March 1999, he would not have been granted that licence. The legislature has seen fit to ensure that that result would have been mandatory, and is mandatory for ten years from the date of the conviction. 23 It would be anomalous if despite the committing of a prescribed offence barely five weeks after the grant of the licence, the applicant were to retain his five year licence. 24 Conceivably some circumstances could justify such an anomaly. That is no doubt why the legislature in its wisdom has used the language of discretion in s 26(1) of the Act. 25 The circumstances of this case do not in my opinion justify a decision not to revoke the licence. Rather, in my opinion they compel a revocation.' 13 In our view, the Tribunal in the present case misinterpreted s 26(1)(a). We agree in essence with the submissions of Mr Capper. 14 Section 26(1)(a) permits the Commissioner to have regard to 'any reason' which would have required the Commissioner to refuse the licence had that reason been part of the application for a licence. The question then is what constitutes 'any reason'. In our view, the 'reason' to be found in s 16(1)(a) is conviction for a prescribed offence not conviction for a prescribed offence prior to the last application. The primary clause is s 16(1)(a) '(a) has, …, been convicted in New South Wales or elsewhere of an offence prescribed by the regulations, whether or not the offence is an offence under New South Wales law'. The words omitted from that quotation comprise a subordinate clause ('within the period of 10 years before the application for the licence was made'). That subordinate clause does not, in our view, condition the scope of a prescribed conviction for the purpose of it being taken into account under s 26(1)(a). The subordinate clause is simply seeking to provide a clear time bar as to what is a relevant prescribed conviction in the circumstances of an application. It enables the Commissioner and potential applicants to know with certainty what old convictions are caught by the mandatory rule. 15 This interpretation is also, we consider, consistent with the logic of the statutory scheme. It would be a very odd scheme that attached severe consequences to convictions prior to an application but did not address convictions of the same nature that occurred during the currency of a licence. The oddity of such an outcome is well illustrated by the Botros case itself. It would be very odd if a class of conviction that gives rise to automatic refusal of a licence could not be relied upon, if sufficiently heinous, in the exercise of a discretion to revoke. The Interpretation Act 1987 in s 34(1)(b)(ii) provides that if "the 'ordinary meaning' given to a statutory provision leads to a result that is manifestly absurd or unreasonable", consideration may be given to extrinsic material (such as the Parliamentary debates) "to determine the meaning of the provision". Having reached the interpretation that it did, in our view the Tribunal should have taken account of any extrinsic material that might have assisted in ascertaining whether the interpretation was intended. 16 It is important first to look to the statutory context when approaching the task of interpreting a particular provision. In Repatriation Commission v Vietnam Veterans' Association [2000] NSWCA 65 at [107] - [108]; (2000) 48 NSWLR 548 at [107] - [108] Spigelman CJ said: 'The Australian law of statutory interpretation requires a court to consider context in the first instance, not merely after "ambiguity" is identified: see R v Wilson; Ex parte Kisch (1934) 52 CLR 234 at 244; Cooper Brooks (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 147 CLR 297 at 304, 319-320; K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 312, 315, 321; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 335 at 381 [69]. As Sir Anthony Mason put it in K & S Lake City Freighters Pty Ltd (at 315) (in dissent, but not with respect to the law of statutory interpretation); "… Problems of legal interpretation are not solved satisfactory by ritual incantations which emphasize the clarity of meaning which words have when viewed in isolation, divorced from their context. The modern approach to interpretation insists that the context be considered in the first instance, especially in the case of general words, and not merely at some later stage when ambiguity might be thought to arise."' 17 Mr Capper found some support on the statutory interpretation point in New South Wales cases relating to the licensing of private enquiry agents. These cases are of limited relevance: Wood v Reason [1977] 1 NSWLR 631; Derisi v Vaughan [1983] 3 NSWLR 17 (CA). In Derisi the issue was whether, properly construed, the provision as to revocation conferred a discretion or was mandatory. The Court held that there was a discretion. That is not an issue in this case; and the formula in issue in this case is not found in the statutory provisions there under consideration. These cases are illustrative of a statutory regime where there was a discretion to revoke a current licence for certain convictions, as compared to a mandatory duty not to grant a licence or renewal of a licence for the same convictions. Their relevance to this case derives from the court's recognition that there may be good reasons in a licensing scheme for automatic denial of licence applications and licence renewals which nonetheless allow a discretion to operate in relation to the revocation of the current licence. (See, Derisi at 22 and the example of delaying revocation to enable completion of work for a particular client.) 18 The first ground of appeal succeeds.

Procedural Fairness 19 The Tribunal expressly acknowledged that its interpretation was a departure from the approach to the operation of s 26(1)(a) taken by the Commissioner and the Tribunal (differently constituted) on several previous occasions. The Tribunal explained its omission to obtain submissions on the basis that it had formed a provisional view to the contrary after the hearing had been completed. 20 Mr Noble for Mr Valkai conceded that there had been an absence of procedural fairness. He did not challenge the Commissioner's objection that the Commissioner should have been given an opportunity to respond to this possible interpretation. 21 In Chief Executive, SAS Trustee Corporation v Daykin [2000] NSWADTAP [20]-[23], the Appeal Panel dealt with the procedural fairness implications of the distinction between undertaking a process of receiving evidence outside the hearing and the performance of the deliberative process. 22 The following extract from Kioa v West [(1985) 159 CLR 551 was cited by the Commissioner in support of its case per Mason J at 587 (referring to In Re HK (an infant) [1967] 2 QB 617: 'The applicant is entitled to support his application by such information and material as he thinks appropriate and he cannot complain if the authorities reject his application because they do not accept, without further notice to him, what he puts forward. But if in fact the decision maker intends to reject the application by reference to some consideration personal to the applicant on the basis of information obtained from another source which has not been dealt with by the applicant in his application there may be a case for saying that procedural fairness requires that he be given an opportunity of responding to the matter.'

23 This passage refers to the evidentiary side of the decision-making process - 'some consideration personal to the applicant on the basis of information obtained from another source.' This is similar to the concerns expressed by the Appeal Panel in the SAS Trustee Corporation case. The Commissioner then went on to cite another passage from Mason J at 587: 'In this respect recent decisions illustrate the importance which the law attaches to the need to bring to a person's attention the critical issue or factor on which the administrative decision is likely to turn so that he may have an opportunity of dealing with it.'

24 Mason J cites the cases of Cole v Cunningham (1983) 49 ALR 123, R v Gaming Board for Great Britain; ex p Benaim and Khaida [1970] 2 QB 417 at 431, and Daganayasi v Minister for Immigration [1980] 2 NZLR 130. These cases are all illustrative of situations where factual material upon which the decision-maker relied was not brought to the attention of the person adversely affected. 25 What the Commissioner in effect asserts here is that there was a consistent approach previously taken in the Tribunal to the legal interpretation of s 26(1)(a), and that the Tribunal should have advised the parties, in particular the Commissioner, of the possibility that it might depart from that interpretation. 26 Some care must be shown in seeking to apply requirements of procedural fairness to the deliberative process as it relates to the interpretation and application of relevant law. It will often be the case that a line of thinking is developed within the deliberative process that involves a different emphasis to that given by the parties in their submissions. It would not be conducive to finality of decisions if the deliberative process were lightly to be reopened to the parties. It often happens in tribunals that submissions are of limited value or of no value as to the applicable law and its interpretation. Tribunals are often left to their own lights. 27 The requirements of procedural fairness are a component of the unifying principle of 'open justice' - that justice must not only be done, but seen to be done. See generally Chief Justice Spigelman, 'Seen to be Done: the Principle of Open Justice' (2000) 74 ALJ 290, 378. 28 In relation to the exercise of the s 26(1)(a) discretion, the General Division of the Tribunal had adopted a consistent approach as to the construction. It follows, we consider, from the unifying principle of open justice that if the Tribunal is minded to reconsider established interpretation, it should consistent with considerations of comity, predictability and rationality, give the parties an opportunity to make submissions on the point. 29 In this important aspect of the scheme of security industry licensing, the Commissioner had acted on an understanding of the applicable law which had been consistently approved by the Tribunal. If in a significant matter of this kind, the Tribunal is minded to reconsider the view adopted previously - a situation that may arise because, for example, a relevant authority has been overlooked in the past, there is an obvious error or new arguments have occurred to the Tribunal - it should convey that possibility to the parties. 30 We are satisfied that there was an error of procedural fairness. That error that has now been overcome by this appeal. 31 The question remains as to what action, if any, the Appeal Panel should take in relation to the error of construction. 32 Because the Tribunal found that s 26(1)(a) did not provide the Commissioner with a head of power under which to revoke the licence, it only examined the material upon which the Commissioner based his decision by reference to the heads of power conferred by para (c) (no longer of fit and proper character) and (d) (public interest). 33 The Commissioner has sought leave for the Appeal Panel to extend the appeal to the merits of the decision, so that s 26(1)(a) can now be applied to this case. 34 At the hearing the Appeal Panel indicated that it would make further directions as to the conduct of the matter if it reached the conclusion that an error was established. 35 We make the following observations. It is possible, we consider, that ground (a) could be invoked by reference to different and narrower considerations to those relevant to ground (c) - fit and proper character. The Commissioner might consider that while a person does not have a defect of character sufficient to justify revocation, nonetheless the offence is such that ground (a) should be invoked. 36 But our difficulty lies in discerning what separate sphere in this case occupied by the 'public interest' ground (ground (d)), where the 'public interest' argument appears to have relied entirely on the circumstances of the conduct for which Mr Valkai was convicted. Though that may not always be so, in this case ground (d) which was considered by the Tribunal appears to occupy precisely the same area as the (not considered) ground (a). 37 Our provisional view is that in considering (d) the Tribunal disposed of the same case that would have been mounted under ground (a). If this view is correct, an injustice would be done to Mr Valkai, whose submissions and evidence were directly considered by the Tribunal below, if the Appeal Panel was now to permit the reopening of the case. 38 We will relist the matter before the President sitting alone to allow the parties to make any further submissions on what further order might be made by the Appeal Panel in relation to this matter.

Order 39 Relist before President for further submissions as to order of Appeal Panel.

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