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High Court of Australia Transcripts |
Office of the Registry
Sydney No S207 of 1996
B e t w e e n -
CENTURY IMPACT PTY LIMITED
Applicant
and
CHIEF COMMISSIONER FOR BUSINESS FRANCHISE LICENCES (TOBACCO)
First Respondent
PAUL REID
Second Respondent
Application for special leave to appeal
DAWSON J
TOOHEY J
KIRBY J
TRANSCRIPT OF PROCEEDINGS
AT SYDNEY ON FRIDAY, 11 APRIL 1997, AT 12.09 PM
Copyright in the High Court of Australia
MR C.T. BARRY, QC: May it please the Court, I appear with my learned friend, MR M.M. MACROSSAN, for the applicant. (instructed by J. Biady & Associates)
MR J. BASTEN, QC: May it please the Court, I appear with MR P.J. SAIDI for both respondents. (instructed by the Crown Solicitor for New South Wales)
DAWSON J: Yes, Mr Barry.
MR BARRY: Your Honours, the importance of this application may be demonstrated, in our submission, by looking at what the consequences are of the decision that was made by the Court of Appeal. There are two consequences. The first is that anything less than misfeasance in public office is protected by this particular provision and the second, in our respectful submission, more alarming consequence is that if the Court of Appeal is right in its construction of section 27, the result is that the property of a citizen may be seized upon the basis that a public servant has an unsubstantiated suspicion that there is something amiss in some aspect of that person's affairs relevant to the exercise of the power.
TOOHEY J: Honest, but unsubstantiated, is that how you would put it?
MR BARRY: Well, it is a question, with respect, your Honour, of what honest means relevantly in the particular case.
TOOHEY J: I was really only seeking to draw attention to what the Court of Appeal did in fact say. Would that be the inference to be drawn from the way in which it was put, that the suspicion must be honestly held?
MR BARRY: Yes.
TOOHEY J: That is the way I had read it.
MR BARRY: Honest, but unsubstantiated. In other words, what is, in our respectful submission, troubling about the Court of Appeal's approach and the construction of this is that there need by no proper factual basis for the suspicion, yet a citizen going about his affairs lawfully and according to law is exposed to a situation that a public servant, without telling him why, without explaining before, during or after the reason why the extraordinary step is being taken in seizing his property may, operating only with what he has in his own mind but he does not reveal to anybody else, seize that person's goods.
KIRBY J: If there were no factual basis, then how could it be that there was good faith?
MR BARRY: That is, with respect, your Honour, one of our points.
KIRBY J: Is the assessment - Justice Sully at first instance found an absence of good faith.
MR BARRY: He did.
KIRBY J: That, it seems to me, is the sort of nebulous assessment that is normally reserved to the primary judge in the trial.
MR BARRY: With respect, your Honour, that is one of our points. What, with great respect to their Honours in the Court of Appeal, their Honours did was they quarantined a couple of pages of what Mr Justice Sully had said and said, "This deals with the essential matters." But when one reads the judgment as a whole it is, in our respectful submission, manifestly clear what sort of factual matters the learned trial judge had in mind when he came to the view on what is a very broadly expressed notion, namely - - -
KIRBY J: His Honour heard the public officer give evidence and saw him give evidence.
MR BARRY: That is so.
MR BARRY: So he would normally be given the protection by this Court of the well known principles relating to the primacy of the primary judge. But those principles are very well established and we would not need to revisit this case in order to re-establish - - -
MR BARRY: No, your Honour, that is not an aspect that would give the matter a special leave character. It is one of our points, but it is not - the troubling aspect, the special leave point really is that there is just something unsatisfactory about an interpretation of a protective provision which authorises the seizure of the property of citizens on the basis of an unsubstantiated suspicion.
KIRBY J: You say you have findings in your favour, some of which are not challenged, that the ambit of the protection provided by section 27 is in two phrases, only one of which was present in Webster, the good faith aspect was not present. You have the finding of the primary judge which, in part, rested on his impression of the public officer, and that if this decision stands the ambit of the protection that is given to the derogation of the civil rights of citizens will be significantly diminished.
MR BARRY: With respect, your Honour, that is how we put that aspect.
KIRBY J: And that Parliament should not be taken to have meant that.
MR BARRY: Not unless they made it abundantly clear. Webster v Lampard is a very good illustration. All these protective provisions - and there are dozens of them - are differently worded, but Webster v Lampard was "without direct proof of corruption or malice". This is a much more general test, a much factually broader test, to enable the courts to do what, fundamentally, is a balancing exercise between the rights of citizens and the rights of the revenue. That is really what these provisions are about and if the Court of Appeal is right then, in our respectful submission, they have gone too far against the rights of citizens. If they wanted to say, "Public servants are protected without direct proof of malice or without direct proof of corruption", then they could have done so.
KIRBY J: That is a very high standard. To lose that immunity you would have to prove an awful lot, whereas good faith is at a much lower level.
MR BARRY: That is so. And good faith invites an inquiry of the generally broad nature that was made by the trial judge in this case. The aspect of the inquiry that was made by the trial judge that are important to those issues, in our respectful submission, was entirely overlooked by the Court of Appeal in many important respects. Can I just digress to indicate, your Honours, where those errors appear. The Court of Appeal errors, in our respectful submission, are maybe contained largely on page 121. Your Honours will observe at about line 15 that Mr Justice Priestley, who delivered the judgment with which the other members of the court agreed:
On the primary facts upon which Sully J bases his conclusion, I have formed a different opinion. The point on which we divide is, I think, that we have different understandings of the meaning of "good faith for the purpose of executing .. the Act". The features indicated by the trial judge as leading him to his conclusion were that the seizure was invalid, it was the result of unsubstantiated suspicion and that it could not be supposed that it was the intention of the Legislature that a citizen whose goods were seized in those circumstances should be deprived of a remedy by s 27.
There were, in our respectful submission, many other passages through the course of the judgment which related directly to the type of considerations that the learned primary trial judge had in mind. May I take your Honours to some illustrations. Page 75, his Honour was considering what was an appropriate award for exemplary damage in the circumstances of the particular tort which he found to be established and which he found not to have been protected by section 27. He said at page 75:
I would not be prepared to find that the second defendant, and the other officers of the first defendant who dealt with the plaintiff and his advisers on 15 August, were actuated by malice in the narrow legal sense of an improper purpose positively entertained -
That, of course, would be misfeasance in public office and his Honour was not prepared to find that. But his Honour goes on:
to force the plaintiff out of business by a deliberate abuse of the powers conferred by the Act. But I have, equally, no doubt that both the second defendant and all of his relevant departmental superiors did not like Mr. Wright, or the activity which they saw him carrying on, and I am satisfied, for the reasons that I have earlier explained, that their behaviour in fact towards Mr. Wright and his company and his advisers was inappropriate in a sense deserving of disapprobation marked by a modest award of exemplary damages.
We say that that is a finding which relates to this question of good faith, based upon what a trial judge saw and observed during the course of a fairly lengthy hearing. If one goes to other sections of the judgment - and our submission is that one needs to look at this judgment as a whole, not quarantine the two pages that the Court of Appeal dealt with - page 74:
The conduct which I regard as having been "sufficiently reprehensible" to attract an award of exemplary damages is the conduct of the relevant public officials who obdurately -
which is the word his Honour used -
refused to give prompt and proper particulars to the plaintiff of the ground or grounds relied upon to support the lawfulness of the seizure of the plaintiff's goods. In this day and age, it is simply not acceptable for public officials of whatever degree to seize the property of a citizen without making thereupon full and frank disclosure of every factor which is said to support the taking of such a draconian step. Not even the public interest to "protect the revenue", - and there is undeniably such an interest which is deserving of all proper support, - can justify any public official's forcing a citizen to play, in effect, a game of blind-man's-buff, the consequences of a wrong choice to the player being the confiscation of his property and, possibly, exposure to a fine or imprisonment.
And, of course, his Honour was entitled to look at what happened after the seizure as being relevant to a finding in relation to whether or not the relevant officer was acting in good faith at the time of seizure. What possible explanation could there be for the officer not saying to the applicant's solicitor, "The reason why your goods were seized was because the officer formed a belief, which he claims to have been reasonable, that the destination to which you said they were going was not Victoria and he reasonably believed that they were in fact going somewhere in New South Wales, and illegally."
KIRBY J: And the decision of the Court of Appeal, if confirmed, will simply send the signal that this obdurate high-handed conduct is within section 27.
MR BARRY: They do not have to say a word. They can pull people over, they can say, "Right, you've got tobacco on board, haven't you? Yes, you have. Right. I am not going to tell you why but we are seizing your" - - -
KIRBY J: I find it very hard to believe that is what Parliament intended by the section.
MR BARRY: With respect, your Honour, there must be a balance in this, but the balance has gone far too much, in our respectful submission, the Court of Appeal's judgment, in favour of, if I could put it broadly, the revenue and there is not sufficient protection in that Court of Appeal judgment for the rights of citizens.
DAWSON J: It is a case in which factual issues merge into the question of law, do they not? It is very hard to separate them out.
MR BARRY: That is because of, with respect, your Honour, the provision "in good faith". That really directs a pretty general inquiry and, we say, an inquiry that means more than, and other than, simply whether or not there was an honest suspicion. That is the error. When one looks at what Parliament has decided, in our respectful submission, is to identify that there be a protection, but it be a protection subject to a very general provision which will have application in different ways in different cases. That is the method chosen. If it was desired to have it firmer, Parliament could have prescribed a much tighter provision, but they did that to reserve it, if effect, to trial judges to deal with these sorts of matters as factual matters, which is what the trial judge did, in our respectful submission, correctly.
Now, your Honours, there are other provisions about matters about the way in which the applicant's officers were addressed. His Honour made findings about snubbing Mr Wright, about references to him being a jerk. Your Honours might recall in the course of the judgment there was material which his Honour listened and heard and which led him to the conclusion that there was what one would call in the judicial sense "bias". There was a view that was being taken by these officers towards the individual citizen which, in our respectful submission, permeated the approach to what they were to do in relation to this particular power. The way that it worked - and this is the part that is intellectually unsatisfactory - is those processes enabled the step of what his Honour referred to as rationalisation. The Court of Appeal does not refer to this but your Honours will recall that, in the primary judge's judgment, he went through the processes which he thought were inappropriate and what he did was he said, "What this officer has done is he has said, `I suspect that this record is not an accurate record. I've got a suspicion about it, I'm not going to tell anybody about it, but do I seize or do I not seize?'." When he is doing that, he then says, "Well, I know that a Mr Wright is a `big player'" - as if there were some sort of game and not concerned with the rights of citizens - "I suspect that he is engaged in some illegal activity but I cannot identify what it is", and then he says, "I have formed a belief that the record is inaccurate." and seizes.
It is that process of rationalisation, and it is the type of material that influences it, including the finding that his Honour made of the dislike of Mr Wright which, in our respectful submission, negatives the good faith. And once that is negatived the defence under section 27 is gone and the applicant was entitled to his verdict.
TOOHEY J: Mr Barry, there is a lot of force in what you say, but when you express it in terms of the Court of Appeal moving the balance, it does not shape up particularly well as a special leave question. What do you identify as the error in the approach taken by the Court of Appeal that would warrant a grant of special leave, as opposed to the Court of Appeal taking a different view, perhaps, of the facts?
MR BARRY: That an unsubstantiated suspicion is a sufficient basis upon which a public official may seize the property of a citizen.
DAWSON J: That is really a question of fact, too, in the particular circumstances, is it not?
MR BARRY: It is, but the danger is that if the courts - and, with great respect, your Honours, this Court - does not set the standard, and literally the goal standard, by which these sorts of matters are to be measured - - -
DAWSON J: The standard is "good faith", and that has a different application in different factual settings.
MR BARRY: It does.
DAWSON J: And the Court of Appeal may perhaps have been wrong on the facts of this case, but that would not warrant special leave.
MR BARRY: It would not, except for the subject matter. The subject matter of this matter involves what are fundamental common law rights and there are two of them: the first is the fundamental common law right that a citizen may go about his affairs, according to law, without undue interference by servants or agents of the State.
DAWSON J: Yes, but that is something which the particular provision makes an inroad on.
MR BARRY: It does.
DAWSON J: One can decry that, but there is the section.
MR BARRY: The second is, and I will come back and deal with your Honour's point in relation to that in a moment, that fundamental common law rights include rights to possession of one's own property.
DAWSON J: Again, same thing.
MR BARRY: But if the court is not prepared - - -
KIRBY J: But the section's inroad is a tiny little entrance; it is not a vast chasm through which you can drive tanks and camels. The problem that I see, subject to Mr Basten, is that if this is confirmed then section 27 will be so construed.
MR BARRY: That is so.
KIRBY J: It is not a very good message, especially when the primary judge, who had certain advantages, found an absence of good faith.
MR BARRY: Our submission is that courts ought to be vigilant to protect inroads, even if they be relatively small. Fortunately there are not many of these cases, that is they do not often arise, but when they do arise, if, with respect, the courts do not protect the common law rights of citizens, no one else is going to do so. The pressures upon parliaments to, as it were, increase the powers of revenue and revenue-raising authorities at the expense of citizens are significant and albeit a particular matter and albeit it a small inroad, our respectful submission is that, fortunately, in our civilisation the question does not often arise and it often does not present itself in such a stark way as has arisen in this particular case in relation to seizure of the property of citizens, but when it does, our submission is that it is an appropriate matter, particularly given the nature of the powers, for the Court to examine what was done and, we say, incorrectly done in the Court of Appeal, both as a matter of law, in that the construction was too wide, and as a matter of fact in that they failed to take proper account of what the trial judge had found.
DAWSON J: Yes, Mr Basten.
MR BASTEN: Your Honours, there are, perhaps, two matters which require attention in this case. The first is the issue of principle concerning the interpretation of protective provisions such as 27. That was dealt with as recently as 1993 by this Court in Webster v Lampard.
KIRBY J: A much narrower provision.
MR BASTEN: With respect, no.
KIRBY J: Corruption, you had to prove corruption by the police officer.
MR BASTEN: No, that is not so, your Honour. Do your Honours have copies of that? If I need to address it, I have copies here.
DAWSON J: Yes, we do.
MR BASTEN: Your Honours have it. The only difference between the present provision and that which is set out at page 601, in terms of the Limitation Act is that there is no reference in the Limitation Act provision to good faith. That can hardly assist this applicant; indeed, it assists us. The second provision set out is the Police Act, to which your Honour Justice Kirby, I think, was referring. But the comments which are made by the majority of this Court, at pages 606 through to 608 are clearly applicable to provisions of this kind generally and Justice McHugh, at page 619 at about point 6 on the page, in a new paragraph, says:
Statutory provisions, giving immunity from action to persons discharging public functions, vary in their language. Nevertheless, the courts have construed such provisions by reference to general principles rather than by a textual analysis of individual enactments.
KIRBY J: But you cannot really say that there is a close analogy between this provision, good faith, and for purposes of executing the Act, and unless there is direct proof of corruption or malice.
MR BASTEN: With respect, your Honour, that is precisely the approach that the majority in this Court adopted at page - - -
KIRBY J: Surely, in every case, you have to interpret and apply the statute. That is our normal task. You cannot allow general miasmic statements to override your duty to apply the law.
MR BASTEN: With respect, your Honour, that is not how I would describe the statements made at page 606 which adopt precisely the terminology of a person who, point 3:
genuinely but mistakenly believed that he or she was acting within the limits of the authority -
and if what your Honour says is right, then we would submit that if it is a matter of each statute, it is not a matter of general public importance but mere statutory construction. We do not see that this case gives rise to any special leave point which was not adequately dealt with in Webster v Lampard.
The other aspect of the matter which is put is that - and it must be put in these terms - it is said that the trial judge made a finding of good faith. Your Honour has been given no reference to an absence of good faith. Your Honours have been given no reference to any such page and, in our submission, it is simply an incorrect assessment of what happened. But, more importantly, what is really being put to your Honours is that the Court of Appeal did not do what it said it was doing. In numerous places in the judgment of Mr Justice Priestley, what he said he was doing was making findings based upon the primary facts on which the trial judge had based his conclusions. That appears at page 121, line 15. At line 50 on the same page:
Sully J found that at the critical moment Mr Reid had an honest suspicion there might be something amiss -
and so on. At page - - -
KIRBY J: Presumably you pleaded section 27.
MR BASTEN: Indeed. That was the primary defence we relied upon.
KIRBY J: And therefore, in order to overcome it, the primary judge had to make the determination that you did not fit within it, namely that you did not have or had not shown good faith for the purpose of executing the Act.
MR BASTEN: He did that on a basis which we said in the Court of Appeal involved a misapplication of the law as understood from Little's Case, Trobridge v Hardy and as affirmed in Webster v Lampard. His Honour did not have the benefit of Webster v Lampard at the time of his decision but there was no doubt about the principles which were affirmed in that case, in our submission, and in any event we were successful on that question of law.
But if your Honours would seek to know the references to the primary findings, firstly, at page 65 at line 15 the trial judge said:
At line 26:
I am prepared to accept that the second defendant formed an honest suspicion -
At line 40 he said that whatever belief he had was not reasonable. Well, it is only where the belief is not reasonable that the application of section 27 becomes relevant. Your Honours, at page 79, his Honour made similar factual findings in the middle of the page, line 25:
I am not persuaded, however, that it could be found fairly against the second defendant that, when he actually effected the unlawful seizure, he knew positively that what he was doing was unlawful.
mental bloc of suspicion and rationalised it into a reasonable belief.....I am not persuaded that it was positively present in the mind of the second defendant that the proposed seizure was in fact unlawful.
No finding at all of ulterior motive, no finding at all of absence of good faith; indeed, a finding that he acted honestly. That is not only the basis upon which Justice Priestley applied the law as established in Webster, but it was the basis on which he differed as a question of law as to the application of section 27. In my submission, the case does not raise any - - -
KIRBY J: Yes, but at 66 and 67 Justice Sully is clearly referring to section 27. Section 27 talks in terms of good faith. He is talking about the mind of your client's officer and these are matters which, by the authority of this Court, are normally committed for decision to the judge who has the advantage of seeing the person involved. So all of these are reasons, it seems to me, for great restraint on the part of the Court of Appeal, who came to a different view.
MR BASTEN: Undoubtedly, your Honour, but what your Honour is saying would amount to a special leave point were it clear that the Court of Appeal had departed from that general rule. Mr Justice Priestley says specifically he relies upon and applies the primary judge's findings. Now, if he is wrong in what he does, and we say he is not, but if he is wrong, he is still applying the right principle.
KIRBY J: But findings in a page or so of judgment are not the same as the impression of the faith, the good faith of a person. That is a matter of assessment.
MR BASTEN: The inferences which may be drawn from the primary findings, for the purpose of making an ultimate finding in respect of the application of section 27, was the matter about which he differed. That is a legitimate exercise for an appellate judge, we would say. If your Honours please.
DAWSON J: Yes, Mr Barry.
MR BARRY: What Mr Justice Priestley did is he took too narrow a view of what he described as the essential features. What his Honour did was, at page 119, he says:
The passage that then follows in his reasons contains all the essential matters for the decision of this point -
and he goes on. Our point is it does not, that you need to read the judgment at first instance in its entirety to see what were the matters, both in terms of developing the sequence of events that occurred during the course of the day which influenced his Honour's mind as to how he should approach the question and the findings that he ultimately made. To quarantine a particular passage in that way is, in our respectful submission, not a proper application of the principles that the Court has said should be applied to courts of appeal.
The second point is that when he does it, his Honour does not deal with the way in which his Honour developed the process of reasoning at pages 65 to 66. True enough he says:
I am prepared to accept that the second defendant formed an honest suspicion -
We would describe that as a fairly soft finding, that is that on the requisite onus he was not prepared to go the extent of finding that this public servant had deliberately exceeded power, but then he goes on and he deals with the conditioning to regard him as "a big player", the pressure that was being brought on him as a young officer by his superior, then the process of rationalisation, his Honour thought that all of these matters were relevant to good faith. They do not score a mention in the judgment in the Court of Appeal and they were critical to the way in which the trial judge approached what is a pretty broad question of fact and, in our respectful submission, demonstrate that the approach of the Court of Appeal was in error.
DAWSON J: Thank you, Mr Barry.
The following is by majority. In Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598 this Court dealt generally with the considerations affecting provisions such as section 27 of the Business Franchise Licences (Tobacco) Act 1987 (NSW). What is involved in this application is the meaning of "good faith" in section 27. The meaning of that expression was examined by the Court of Appeal against a background of the facts in this case. The Court is of the view that the Court of Appeal did not fall into any error of principle and, in so far as factual issues are involved, the case would not warrant the grant of special leave to appeal. Special leave is accordingly refused.
MR BASTEN: With costs, if your Honours please.
DAWSON J: Mr Barry, can you say anything about that?
MR BARRY: No.
DAWSON J: With costs.
AT 12.38 PM THE MATTER WAS CONCLUDED
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