ALQ June 2023 - Supreme Court

Decision summaries

Mistaking the scope of statutory powers

Secretary, Department of Education v Derikuca [2023] NSWCA 94.

The respondent was a cleaner employed to work at a school by a company which held a contract with Property NSW. Following a complaint made about the respondent’s conduct, the Department of Education requested that the contractor not employ the respondent at the Department’s facilities and placed the respondent on its Not To Be Employed (NTBE) list.

The respondent sought judicial review of the Department’s purported decisions. Neither the contractor nor Property NSW was a party to the proceeding. The primary judge, Rothman J, quashed the decision with respect to the NTBE list on the ground that the respondent was not an employee of the Department and made a declaration that the Secretary of the Department had no power under the contract to exclude the plaintiff from school sites. He also made procedural orders for the determination of certain unpleaded tort claims said to have been identified in his judgment.

On appeal, the Secretary submitted that:

1.  the power to place the respondent on the NTBE list did not rely upon him having been previously employed by the Department
2.  although Rothman J’s declaration may have been correct in law, no finding ought to have been made about the contract between the contractor and Property NSW in their absence
3.  s. 63 of the Supreme Court Act 1970 did not empower Rothman J to expand the proceeding to include unpleaded causes of action.

The Court of Appeal essentially accepted the Secretary’s submissions. It set aside the orders made by Rothman J and dismissed the proceeding.

Court of Appeal clarifies Minister’s right of financial assistance recovery from non-compliant schools under the Education Act

Malek Fahd Islamic School Limited v Minister for Education and Early Learning [2023] NSWCA 143

The school appealed from Supreme Court judicial review concerning the Minister’s decision in 2021 under s. 83J(3)(b) of the Education Act 1990 to recover around $11M of financial assistance provided to the school in 2014 and 2015, during which period it had operated ‘for profit’ and was a ‘non-compliant school’ under the Act. The primary judge found, relevantly, that a six-year limitation period under the Limitation Act 1969 was engaged in respect of that decision, but that the relevant cause of action did not arise until the Advisory Committee established under the Education Act recommended to the Minister that a ‘non-compliance declaration’ be made with respect to the school.

The appellant argued that the respondent’s decision constituted ‘action on a cause of action’ that was subject to the six-year limitation period under s. 14(1) of the Limitation Act, and that the cause of action arose at the time the payments were made. On that basis, the limitation period had expired when the respondent made its decision to recover the funds in 2021.

The respondent contended that s. 14(1) had no operation with respect to steps taken under s. 83J(3)(b). Rather, Div. 7 of Pt. 3 of the Act (in which s. 83J appears) contained its own self-contained provisions for payments of financial assistance to non-government schools, and for the recovery of such payments where it was later determined that the school was not eligible at the time the payment was made.

The Court found that the Minister’s right of recovery under s. 83J(3)(b) of the Education Act was not subject to the operation of s. 14(1)(d) of the Limitation Act. The Court dismissed the appeal and ordered that the appellant pay the respondent’s costs in the proceedings.

Court of Appeal resolves issues concerning the coherent application of CPOR Act

Commissioner of Police, NSW Police Force v TM [2023] NSWCA 75

The Commissioner had placed TM on the child protection register for three offences committed under s. 91H of the Crimes Act 1900 for possession of child abuse material, which were committed whilst a juvenile. The charges relating to the possession of the same material on multiple devices and were confined to TM’s conduct on a single day. The material depicted more than one real child. It was common ground that TM would be a registrable person, but for the exception for juveniles who commit a ‘single’ registrable offence. The Child Protection (Offenders Registration) Act 2000 (CPOR Act) provides that a reference to a single offence includes ‘more than one offence of the same kind arising from the same incident’ and, for the purposes of the CPOR Act, offences may only ‘arise from the same incident’ if they are committed in a 24-hour period and are committed against the same person.

TM submitted he was not a ‘registrable person’ because the qualification that offences must be committed ‘against the same person’ could not coherently apply to possession offences.

The Court held that possession of child abuse material which depicts a real child is an offence ‘against’ that child. Accordingly, a person who possesses material which depicts multiple children will commit an offence against more than one person; the requirement that offences be treated as a single offence when they arise from the same incident and are committed against the same person may produce some incongruous or unfair outcomes but did not produce incoherence requiring complete disapplication of the qualification to the exception.

The Court considered that there is incoherence in the application, in terms, of the exemption which removes the benefit of the exemption for persons who possess material which does not depict real children (because that is not an offence committed ‘against the same person’) but extends that benefit to persons such as TM. However, the Court held that only part of the exception requirement – ‘against the same person’ – is to be disapplied if there is no real person involved in the commission of the offence.

ILGA’s procedural and substantive obligations in deciding Class 1 local impact assessments under s. 36 of the Gaming Act

Tourist Accommodation Pty Ltd v Independent Liquor and Gaming Authority [2023] NSWCA 67

This matter involved a notice of appeal from a previously dismissed application for judicial review of the Authority’s decision to refuse the applicant’s Class 2 Local Impact Assessment (LIA) and Gaming Machine Threshold (GMT) application.

The applicant submitted that the Primary Judge erred in not holding that the Authority denied the applicant procedural fairness in how the Authority dealt with the ‘positive contribution’ requirement in s. 36(3)(c))(i) of the Gaming Machines Act 2001 (GM Act). Further, the applicant alleged that the Authority ought not to have considered the ‘funnelling effect’ in finding it was not ‘otherwise appropriate’ to approve the LIA under s. 36(3)(e) of the GM Act which, in doing so, denied the applicant procedural fairness insofar as this contributed to the LIA being rejected.

The Court of Appeal delivered its decision granting leave to appeal in relation to grounds 1-3 and 5-7 and refusing leave to appeal in relation to ground 4. It dismissed the appeal with costs holding that procedural fairness does not require the Authority to give further guidance to an applicant as to the financial requirements needed to meet the positive contribution requirement under s. 36(3)(c)(i) of the GM Act beyond the guidance provided by the relevant guidelines.

The grant and continuation of ‘Crown leases’

Valuer-General v Sydney Fish Market Pty Ltd [2023] NSWCA 52

The Minister administering the Fish Marketing Act 1994 (FM Act) granted a concurrent lease of the fish markets site (‘the land’) to Sydney Fish Market Pty Ltd (SFM) in 1994 as part of the deregulation of the fish marketing industry under that Act. The transfer of the land to the Crown under the FM Act and the grant of the lease, which was over Crown land, occurred the same day. The applicant contended the land was ‘Crown-lease restricted’ under the Valuation of Land Act 1916 (VL Act) in the valuing years 2019 and 2020, as the lease over the Land was ‘under’ the Crown Land Management Act 2016 (CLM Act).

The Valuer-General argued at first instance, and on appeal, that: the lease was granted under the FM Act as that Act expressly provided for the grant of a concurrent lease, there was no evidence the statutory preconditions for the grant of a lease under the Crown Lands Act 1989 (CL Act) were satisfied and the Minister who granted the lease administered the FM Act and not the CL Act; even if the lease was granted under the CL Act, the lease was ‘under’ the State Property Authority Act 2006 upon lands vesting in the State Property Authority in 2007. Thus, from this date, the lease could not have been a lease ‘under’ the CLM Act. Notably, the vesting occurred prior to the CLM Act commencing.

The Court of Appeal held:

1.  the lease was granted under the CLA
2.   the lease, before the commencement of the CLM Act, was in force under the CL Act because it was granted under that Act which governed the parties’ rights
3.  the lease was preserved pursuant to the savings provisions in the CLM Act.

The requirement to ‘specify’ an offence in a penalty notice with unambiguous clarity

Beame; Els v Commissioner of Police & Anor [2023] NSWSC 347

The plaintiffs sought declarations to the effect that penalty notices issued to them in relation to alleged COVID-related offences against s. 10 of the Public Health Act 2010 were invalid, in the sense that they were not 'penalty notices' within the meaning of s. 20 of the Fines Act 1996 because they did not sufficiently 'specify' an alleged offence for the purposes of that provision and were invalid on that basis.

The plaintiffs argued that the offence descriptions in their notices did not specify any offence to the requisite standard because they failed to identify the offence-creating provision and did not correctly identify the elements of the offence. Before the hearing, the defendants conceded that the notices the subject of the proceedings did not comply with s. 20 and were invalid.

Despite the defendants’ concession, the Court found that it was necessary and appropriate to provide full reasons for the grant of relief having regard to: the procedural history of the matter; the need for the Court to be satisfied that its power to grant the relief is enlivened; the public interest in understanding the reasons for the decision; and, to provide clarity about the content of the requirement in s. 20 of the Fines Act.

The Court found that the specification requirement in s. 20 means that a penalty notice must identify a penalty notice offence ‘clearly and unambiguously’, and that neither of the offence descriptions in the subject notices complied with that requirement because they did not identify the offence-creating provision or correctly identify the elements of the offence.

Distinct regimes in regulating gaming activities: the Gaming Machines Act and Liquor Act

Whitebull Hotel Pty Ltd v Independent Liquor and Gaming Authority; Area Hotel Pty Ltd v Independent Liquor and Gaming Authority; The Griffith Hotel Pty Ltd v Independent Liquor and Gaming Authority [2023] NSWSC 588

The Independent Liquor and Gaming Authority imposed conditions directed to safe gambling practices under s. 53 of the Liquor Act 2007 on the hotel licences of two venues (Whitebull Hotel and Area Hotel) in connection with their applications to increase the gaming machine threshold (GMT) under the Gaming Machines Act 2001 (GM Act). The Authority also refused an application to transfer a gaming machine entitlement (GME) from the licence of the Griffith Hotel Motel to the Gemini Hotel, and a corresponding increase in the threshold for the latter venue.

The plaintiffs challenged the imposition of the conditions on their hotel licences and the Authority’s refusal to approve the applications. They submitted that the GM Act operates as a standalone code and thus there is no power in the Liquor Act to impose additional conditions directed to gambling practices. The plaintiffs also submitted: that the Authority could not consider community impact where they were not obliged to prepare a ‘local impact assessment’ under the GM Act as part of the applications; and that the Authority had no residual discretion to refuse the applications by reference to community impact.

The Authority submitted that the Liquor Act and the GM Act are connected acts that form part of the gaming and liquor legislation and, thus, that the power to impose such conditions under the Liquor Act was available. The Authority also submitted that it had a residual discretion to refuse GME transfer and GMT increase applications and could consider community impact considerations in doing so.

The Court quashed each of the conditions imposed on Whitebull Hotel and Area Hotel as they were beyond power. The Court considered that the legislative history and terms of the GM Act and the Liquor Act compelled the outcome that each was a standalone regime and, therefore, the Authority could not impose conditions under the Liquor Act directed to gaming machines. The Court also quashed the decision to refuse the applications to approve the transfer of a GME and increase the GMT of Gemini Hotel after determining that the Authority did not have a residual discretion to refuse those applications if the statutory criteria had otherwise been met.

The Authority has filed an expedited appeal against the decision.

Not ‘in the interests of justice’ to fragment Local Court criminal process by allowing access to surveillance device warrant application

Gamage v Riashi & Anor [2023] NSWSC 390

The plaintiff sought a declaration pursuant to s. 43 of the Surveillance Devices Act 2007 (SD Act) that he was entitled to ‘obtain a copy of the application’ for a surveillance device warrant. Section 43 provides that a court may order ‘in the interests of justice’ that a person is entitled to search ‘protected information’, which includes warrant applications, in the custody of a court. The plaintiff sought that material for the purpose of arguing, as part of his defence of related Local Court criminal proceedings, that a telephone recording of him, said to be authorised by the warrant, was improperly obtained and so could not be used.

The plaintiff’s arguments were: first, that the warrant issued under the SD Act did not lawfully authorise the recording, and that what was actually required was an order under the Telecommunications (Interception and Access) Act 1979 (Cth); and secondly, that the recording was ‘illegally collected,’ on the basis the affidavit ‘wilfully concealed’ the ICAC officer’s intention to record a telephone call. The plaintiff also argued that s. 43 was the only means by which he could obtain the warrant application and that it was in the interests of justice that he obtain a copy.

The Court dismissed the plaintiff’s summons. It found that the public interest in avoiding the fragmentation of the criminal process was decisive in circumstances where the plaintiff’s challenge to the warrant could be pursued in and decided by the Local Court. The Court also rejected the plaintiff’s argument that s. 43 of the SD Act was the only means through which he could access the relevant material and found that it was not ‘in the interests of justice’ that he be authorised to search protected information in the custody of the Court.

Duties assessment on declaration of trust over dutiable property revoked

Leppington Pastoral Co Pty Ltd v Chief Commissioner of State Revenue [2023] NSWSC 463

The plaintiff, Leppington Pastoral Co Pty Ltd (LPC), sought orders for a duties assessment to be revoked. The assessment had been issued on the basis that an agreement, the Development Rights Agreement (DRA) entered into in 2010 between LPC and Greenfields Development Company Pty Ltd (GDC), effected or evidenced a transaction in the form of a declaration of trust over dutiable property being land in NSW under Ch 2 of the Duties Act 1997.

The DRA was part of a suite of transaction documents for the development of agricultural land owned by LPC (‘the project land’) and granted rights to GDC to issue Development Notices requiring LPC to deliver up possession of parcels of the project land for the purpose of GDC exercising its development rights.

The Supreme Court held that LPC was entitled to orders revoking the assessment. It held that: the DRA did not effect or evidence a declaration of trust by LPC in respect of that land; and, neither the DRA nor the other transaction documents imposed obligations on LPC that required LPC to hold the Project Land for the benefit of GDC. In particular, the rights of LPC were inconsistent with fiduciary obligations that LPC would have owed to GDC, if it were the trustee of the Project Land for GDC. LPC was required hold the Project Land subject to GDC’s extensive rights under the DRA and other transaction documents but was entitled to act in its own interests in enforcing its own rights, from which LPC stood to derive substantial benefits.

Payroll tax assessments on employment agency contract revoked

Integrated Trolley Management Pty Ltd v Chief Commissioner of State Revenue [2023] NSWSC 557

The plaintiff, Integrated Trolley Management Pty Ltd (ITM), is a company set up to provide trolley collection services to supermarkets. For ITM to be caught by the employment agency contract provisions in the Payroll Tax Act 2007, the trolley collectors must be shown to be working ‘in and for’ the business of the supermarket clients.

ITM submitted that the correct test was whether the workers performing the trolley collection were sufficiently integrated into the client’s business to be seen as additional to its workforce.

The Chief Commissioner submitted that the ‘integration test’ risked error, as the word does not appear in s. 37, nor in the judgment in UNSW Global Pty Ltd v Chief Commissioner of State Revenue [2016] NSWSC 1852. Both parties submitted that various indicia were relevant to determining whether the trolley collectors were working ‘in and for’ the business of the client supermarkets.

The Supreme Court revoked the relevant payroll tax assessments. It found that an employment agency contract must be between the employment agent and the service provider. It considered that evidence about the way the contracts operated in practice was not relevant in characterising the contractual relationship between the parties. It declined to rule on the validity of the ‘integration test’ – instead, it came to the view that the underlying concern of the ‘in and for’ formulation was to allow independent contractors operating their own businesses who were retained by a client through an intermediary to remain as independent contractors. It rejected the possibility of trolley collectors working for more than one business for the purpose of the test, concluding that doing so is an indication of the person conducting one’s own business as an independent contractor. It disagreed with the Chief Commissioner’s submission that an employment agency contract necessarily falls outside a contract of employment at general law.

Court acts as a judicial valuer

Perisher Blue Pty Limited as Trustee for the Snow Trust v Valuer General [2023] NSWLEC 41

This matter concerned the land value of the Perisher Ski Resort for the 2020 and 2021 land valuation years.

The Land and Environment Court found that neither party’s expert valuation evidence was appropriate. It determined a land value higher than that contended by the applicant but some $16 million lower than that contended by the Valuer General.

Whilst the case involved only factual determinations by the Court, the decision is a good demonstration of the Court, in Class 3 valuation matters, acting as judicial valuer. In such a case, the judge effectively acts as an expert valuer and determines the land value for themselves, guided by the evidence before the Court. As observed by the Court of Appeal in Leichhardt Council v Roads & Traffic Authority of NSW [2006] NSWCA 353 Spigelman CJ (with whom Beazley, Bryson and Basten JJA and Campbell J agreed): 

A judge of the Land and Environment Court is perfectly entitled to reject the whole of the expert evidence and, drawing on the experience of the Court, to do as best s/he can to identify an appropriate level of discount or, relevantly, an appropriate quantum of adjustment to the comparable sales figure by reason of the existing use rights of some of those sales.

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