Did the power to make regulations prescribing places under Section 83GD(1) of Criminal Law Consolidation Act 1935 (SA) conditioned by duty to afford procedural fairness to owners and occupiers of land?

Disorganized Developments Pty Ltd v South Australia [2023] HCA 22 (2 August 2023)

Intro:-

This is an appeal from the Supreme Court of South Australia.

Facts:-

Section 83GD(1) of the Criminal Law Consolidation Act 1935 (SA) ("the 1935 Act") makes it an offence for a participant in a criminal organisation to enter or attempt to enter a "prescribed place". For the purposes of that offence, the Hells Angels motorcycle club is a criminal organisation. The second and third appellants, Mr Stacy and Mr Taylor, are members of that motorcycle club and, accordingly, they are participants in a criminal organisation for the purposes of s 83GD(1).

This appeal from a decision of the Court of Appeal of the Supreme Court of South Australia concerns the validity of two Regulations[3] ("the Cowirra Regulations") which each purport to declare a portion of land in Cowirra, east of Adelaide in South Australia ("the Cowirra land"), as a "prescribed place" for the purposes of the 1935 Act. The first appellant ("Disorganized Developments") is the registered proprietor of the two parcels of land that comprise the Cowirra land. Mr Stacy and Mr Taylor are the directors and only shareholders of Disorganized Developments and are occupiers of the Cowirra land.

Issue:-

Is the declaration power conditioned by a duty to afford procedural fairness to the appellants as owners and occupiers of the Cowirra land? Was the presumption displaced by statute?

Consideration:-

Appellants' rights and interests in the Cowirra land

As owners and occupiers, the appellants have property rights in the Cowirra land. Mr Stacy and Mr Taylor seek access to the Cowirra land in order to exercise their rights as occupiers including, from time to time, to reside on the land. Disorganized Developments also has interests in accessing the Cowirra land through its directors in order to maintain it and otherwise to discharge its obligations as owner of the land. The obligations include statutory obligations under various South Australian statutes and regulations and common law duties to protect invitees and trespassers from harm or injury arising from conditions on the land.

Decisions made in the exercise of statutory powers that affect the rights of individuals with respect to property are a category of cases that has a long history of attracting a duty of procedural fairness as a matter of "fundamental justice", "long-established doctrine" and a "deep-rooted principle of the law", subject to displacement by Parliament through express words or necessary implication in the relevant statute. Even so, the Court of Appeal found that the declaration power was not conditioned by a duty of procedural fairness.

Court of Appeal's reasons

In the Court of Appeal, the appellants contended that they were owed procedural fairness as owners and occupiers and as members of the Hells Angels motorcycle club as the criminal organisation associated with the Cowirra land. In this Court, the appellants relied only on their rights and interests as owners and occupiers.

The Court of Appeal acknowledged that the effect of declaring land to be a prescribed place may be to interfere severely with rights and obligations of ownership and occupation, and accepted that the appellants' rights were directly affected in a manner sufficient to give them standing to challenge the Cowirra Regulations, but did not consider that this was determinative of the question whether procedural fairness was required.

The Court of Appeal concluded that the legislature did not intend that there should be an obligation to afford procedural fairness to an owner or occupier of land, whether or not the owner or occupier is a participant in a criminal organisation, having regard to: (1) the "general and preventative policy [of Div 2] of disruption of an apprehended sphere of criminal activity", which the Court considered may be undermined by a duty of procedural fairness; (2) the incidental nature of the interests of owners and occupiers to the prohibition in s 83GD(1), and the lack of any necessary correspondence between these interests and interests of persons to whom the prohibition is directed; (3) the indeterminacy of the class of persons who are the subject of s 83GD(1), that is, participants in a criminal organisation; and (4) Parliament's initial determination by the 2015 Regulations to declare 16 places as prescribed places, in an exercise of "unequivocally legislative power that did not require procedural fairness to any person, such that it could not be inferred to have intended a differential obligation to owners and occupiers of places in the exercise of delegated legislative power to make further declarations.

Procedural fairness applies

The existence of a duty to afford procedural fairness is a question of statutory interpretation. In Twist v Randwick Municipal Council, Barwick CJ described the common law rule that a statutory authority having power to affect the rights of a person is bound to hear her or him before exercising the power as "both fundamental and universal", although subject to legislative displacement. Barwick CJ explained that, if it appears that the legislature "has not addressed itself" to the question of natural justice, the court will approach the task of statutory interpretation "with a presumption that the legislature does not intend to deny natural justice to the citizen", and "may presume that the legislature has left it to the courts to prescribe and enforce the appropriate procedure to ensure natural justice".

Since Twist, the law has evolved to include an established and "strong" common law presumption, generally applicable to any statutory power the exercise of which is capable of having an adverse effect on legally recognised rights or interests, that the exercise of the power is impliedly conditioned on the observance of procedural fairness. Consistent with the historical scope of the duty of procedural fairness, the core operation of the presumption requires the provision of procedural fairness where the relevant power directly affects the rights or interests of a particular individual. In such a case, the presumption operates "unless clearly displaced by the particular statutory scheme".

Notwithstanding the breadth of the stated presumption, there remain statutory powers that are not conditioned upon a duty to give procedural fairness. In particular, powers that affect individuals in an undifferentiated way from the general public may not attract an obligation of procedural fairness. Thus, in Kioa v West, members of this Court emphasised the need for people to be affected as individuals for procedural fairness to apply where a decision affects many people. Mason J adopted a distinction between a decision which directly affects the person individually and one which simply affects her or him as a member of the public or of a class of the public. Brennan J considered that (subject to displacement by the text of the statute, the nature of the power and the administrative framework created by the statute) the presumption "applies to any statutory power the exercise of which is apt to affect the interests of an individual alone or apt to affect his interests in a manner which is substantially different from the manner in which its exercise is apt to affect the interests of the public". Deane J referred to a direct effect on, relevantly, rights and interests of a person in her or his individual capacity, as distinct from a member of the general public or of a class of the general public.

This is not a case that requires consideration of the scope of procedural fairness in relation to a power liable adversely to affect a large group of persons. In this Court, the appellants' case was based squarely upon their individual property rights and interests that would be directly affected by a valid declaration of the blocks comprising the Cowirra land as prescribed places. Declarations of land as prescribed places affect owners and occupiers of the land to a significant degree, and in a manner markedly different from other persons who might be adversely affected by such a declaration, in the sense envisaged in Kioa. The possible interests of a broader class of participants in criminal organisations do not detract from the application of the presumption in this case.

South Australia argued that several features of the 1935 Act supported a conclusion that the declaration power is not conditioned by a duty to afford procedural fairness despite its capacity to affect the rights and interests of owners and occupiers of land, being: (1) the Governor in Council as the repository of the power; (2) the unfettered nature of the declaration power; (3) the Parliament's power to make regulations by statute, as evidenced by the 2015 Regulations; and (4) the provisions for parliamentary oversight of the declaration power. There was no suggestion that the rights and interests of the appellants were not a permissible consideration. Significantly, and contrary to the Court of Appeal's view, South Australia did not press that the legislative purpose of disrupting activities of criminal organisations might be frustrated or compromised by the affording of that procedural fairness.

The features of the 1935 Act identified by South Australia are insufficient, individually and cumulatively, to establish an intention to displace the common law presumption.

Since FAI Insurances Ltd v Winneke, it has been established that the mere vesting of decision-making authority in the Governor in Council is not a sufficient manifestation of a legislative intention to exclude the duty of procedural fairness.

In South Australia v O'Shea, Mason CJ did not discern a legislative intention to exclude a duty to act fairly by the vesting of authority in the Governor in Council, at least where the relevant decision was not to be made principally by reference to issues of general policy. In concluding that the critical question was whether Mr O'Shea had an adequate opportunity to make submissions, Mason CJ rejected an argument that the political or policy aspects of the decision placed it outside the ambit of procedural fairness. Rather, there were issues on which Mr O'Shea was not entitled to be heard. Wilson and Toohey JJ, and Brennan J, focused on the nature of the decision and the political responsibility attaching to the determination of the public interest, rather than the repository of the power. Writing in dissent, Deane J rejected the identity of the decision maker as a relevant factor.

In O'Shea, Mason CJ also addressed the significance of the participation by Cabinet in the process by which the South Australian Governor in Council exercises statutory power. He rejected a submission that the primarily political, social and economic concerns of Cabinet would deny the existence of a duty to act fairly in a matter which turned on considerations "peculiar to the individual". He also rejected the further objection that the private and confidential nature of Cabinet processes precludes the imposition of a duty to act fairly, observing that, in an appropriate case, a requirement that there be placed before Cabinet submissions of an individual affected by the relevant decision would not intrude upon Cabinet's control of its own proceedings.

Contrary to South Australia's submission, in the absence of any clear words that would displace the presumptive obligation to afford procedural fairness, the broad scope of the regulation‑making power conferred by s 370 has no significance. While there are earlier decisions supportive of the view that the unfettered nature of a power is inconsistent with a duty of procedural fairness, requirements of procedural fairness conditioning the exercise of unfettered statutory powers are now commonplace.

There is no reason to conclude that the scope of the regulation-making power is unconstrained by a duty of procedural fairness simply because the exercise of legislative power is not so constrained. Similarly, the general and limited oversight of the regulation‑making power by a Parliamentary Committee and the availability of disallowance are not a source of an implication to exclude procedural fairness: South Australia did not suggest that oversight of this kind was likely to afford procedural fairness to owners or occupiers, or that it would involve consideration of matters that might be raised by an owner or occupier if procedural fairness was afforded and that might avoid the arbitrary exercise of the regulation‑making power.

Content of the obligation to afford procedural fairness

A distinction is sometimes drawn between exercises of statutory power that concern considerations personal to an individual and those that concern issues of general policy. Undoubtedly, the focus of the scheme which includes the declaration power is the disruption of criminal activity. In that context, considerations personal to the owners and occupiers of land ordinarily can be expected to be secondary to broader policy considerations. However, the proper exercise of the declaration power requires the identification of facts to connect the proposed prescribed place with the purpose of disruption. In this way, the exercise of the declaration power is an application of the policy to disrupt criminal activity, rather than the formulation of policy.

There is no reason to doubt that an owner or occupier may have something to say of relevance about the characteristics of the land or its uses, or about possible adverse impacts of declaring a place as a prescribed place, which might affect an assessment of whether to make such a declaration.

Procedural fairness under this scheme requires reasonable notice to an owner or occupier of a proposal to declare a place a prescribed place, to give them an opportunity to supply information or make submissions as to matters within their knowledge as an owner or occupier that may be relevant to a decision to exercise the declaration power. It does not require an opportunity to make more general submissions as to the likely efficacy of the exercise of the declaration power in disrupting serious criminal activity. Accordingly, this is not a case where procedural fairness would require owners or occupiers to be informed of the nature or content of information that might form the basis of a recommendation to the Governor to declare a place to be a prescribed place.

Orders:-

The appeal should be allowed. The orders of the Court of Appeal should be set aside and, in lieu thereof, it should be declared that the Cowirra Regulations are invalid. South Australia should pay the appellants' costs in this Court and below.