ALFY'S PRESTIGE SMASH REPAIRS PTY LTD v LAUER AND ORS SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY, CLARKE and HANDLEY JJA 16-17 November 1992, 11 December 1992 [1992] NSWCA 5 ADMINISTRATIVE LAW — ADMINISTRATIVE SCHEME BY POLICE WITHOUT SPECIFIC STATUTORY SUPPORT — WHETHER BENEFICIARY OF SCHEME HAD LEGITIMATE EXPECTATION — WHETHER POLICE HAD DUTY OF PROCEDURAL FAIRNESS. ADMINISTRATIVE LAW — Administrative action — police establish roster system to fairly allocate towing work in disposition of police among licensed tow truck operators — system lacked express statutory basis — police remove licensed operator from roster without notice and without hearing — whether police had a duty of procedural fairness — Equity Division decides no substantial question to be tried — refuses interlocutory injunction — application for leave to appeal — whether licensed operator had legitimate expectation. Held: The claimant following its admission to the roster had a legitimate expectation which attracted a duty of procedural fairness — claimant therefore established existence of substantial question to be tried — convenient course to allow claimant to make further application for interlocutory injunction to Equity. ORDERS 1. Leave to appeal refused. 2. Costs of the application for leave to be costs in the proceedings in the Equity Division. Mahoney, Clarke and Handley JJA This is an application for leave to appeal from a decision of Windeyer J given on 3 November. The Judge rejected an application by the claimant for an interlocutory injunction restraining the defendants from acting upon a decision by the Police Patrol Commander at Mt Druitt suspending the claimant from the rostered. tow book maintained by the Mt Druitt Police. The decision to suspend was made without giving the claimant any opportunity to be heard. The critical issue in the proceedings was whether it had a right to be heard before any such suspension was put into effect. His Honour was of the opinion that the rostered tow book system was "little different" from the panel of solicitors maintained by the Government Insurance Office where solicitors had no right to be admitted to the panel and could not complain or seek to be heard before a decision was made to remove them from it. He noted that the decision to remove the claimant from the roster was not made pursuant to any licence which it held. In his view a position on the tow book roster was not a privilege as understood in administrative law so as to make the decision one of an administrative nature open to judicial review. He therefore concluded that there was no substantial question to be tried but went on to consider the balance of convenience. He said that while there was evidence that the claimant would suffer some diminution of earnings there was no suggestion that its financial position would be unduly adversely affected by the decision. He refused interlocutory relief and said that the claimant's proper course was to seek an urgent final hearing. 2 UNREPORTED JUDGMENTS The claimant did not offer to treat the motion for an interlocutory injunction as the final hearing. The application sought leave to appeal from an interlocutory order in a matter of practice and procedure. See Adam P Brown Male Fashions v Philip Morris Inc (1981) 148 CLR 170. In reality the claimant needed not only leave to appeal but also an expedited hearing of the appeal or an interim injunction pending the hearing. No application was made until reply for the application for leave to be treated as the hearing of the appeal if leave were granted and the opponents did not consent to this course being followed. Mr Downes QC for the claimant submitted that his Honour erred in principle in holding that there was not a substantial question to be tried. In his submission the Judge's exercise of discretion therefore miscarried and this Court would interfere in accordance with the principles in House v The King (1936) 55 CLR 499. Leave should therefore be granted. It is appropriate to review the statutory background to the operation of the rostered tow book. Tow truck operators must be licensed (s5 of the Tow, Truck Act 1989). Towing without authority, where the regulations require an authority, is prohibited (s34). S36 authorises the making of regulations to provide a scheme for the allocation of towing work but no regulations have been made. Authority is required to tow a motor vehicle from the scene of a motor accident (Reg7 Tow Truck Regulation 1990). Towing authority can be given by the owner, driver or person in charge of the vehicle, or if none of these is present and capable of signing the authority it may be given by a police officer (Reg7(3)). A police officer can also direct the removal of a vehicle which is causing an unreasonable obstruction to traffic (Reg7(1)). Vehicles towed away on the authority of a police officer must be taken to one of the places specified in Reg17. Police officers therefore have statutory authority to authorise licensed tow truck operators to move accident damaged vehicles on public streets when no other authorised person is present or able to sign the authority or when the vehicle is causing an unreasonable obstruction to traffic. Since at least 1986 the Mt Druitt Police have conducted a rostered tow book to fairly allocate towing work under their control among the companies on the roster. In 1986 the claimant was admitted to the roster and remained on it until it was suspended by the decision of the Patrol Commander notified to the claimant by letter dated 30 September this year. Earlier during June and July certain incidents occurred at the claimant's office. Mr Sorbello, the claimant's managing director, swore an affidavit deposing to his version of these events. He said he was asked by two police officers without notice to produce certain business records which he failed to do because, as he claimed, they were in the cabins of the company's tow trucks where they were required to be kept by law. According to Mr Sorbello the police officers engaged in overbearing conduct which culminated in a threat by one of them to have the claimant's name removed from the Mt Druitt roster. An affidavit in answer was sworn by a solicitor in the Crown Solicitor's office which dealt, on information and belief, with some of the matters deposed to by Mr Sorbello. There was no cross-examination of either deponent. On 28 August Mr Sorbello was arrested and charged with an offence contrary to s178BB of the Crimes Act that between 10 and 30 January 1992 with intent to obtain for the claimant a financial advantage he concurred in publishing an insurance claim which he knew to be false or misleading in a material particular and with a further offence that on 21 July 1992 upon the demand of a member UREY'S PRESTIGE SMASH REPAIRS PTY LTD v LAUER AND ORS (Mahoney, Clarke an@ Handley JJA) of the Police Force he failed to produce for inspection an original towing authority. In his affidavit Mr Sorbello asserted his innocence in relation to both offences. The summary trial of these charges has been fixed for hearing at Blacktown Local Court on 18 March 1993. The claimant's licence as a tow truck operator has not been suspended following these charges. We were informed by counsel for the opponents that there was no power to take such action merely because criminal proceedings were pending. There was no dispute that the claimant had been suspended from the tow roster book without notice and without any opportunity to be heard. The last rostered tow received by the claimant was on 9 October. Proceedings were commenced in the Equity Division seeking interlocutory and other relief on 20 October. The question whether there is a substantial question to be tried depends on whether the decision to suspend was one which attracted a duty of procedural fairness. The action of the Mt Druitt Police in establishing the tow roster was administrative in character. It lacked specific statutory authority and did not involve the exercise of any power conferred by the prerogative. However, it constituted a scheme for the exercise by the Police of their statutory powers under Reg7 to authorise licensed tow truck operators to tow away motor vehicles. It was a means by which the Police could fairly allocate towing work which by law was within their disposal and avoid any question or suggestion of corruption or impropriety in its allocation. The principles which must guide this Court in deciding whether the Patrol Commander owed a duty of procedural fairness are those stated by Mason CJ in Attorney General v Quinn (1990) 170 CLR 1 at 20-21 as follows:- "Notwithstanding the criticism that has been levelled at the concept of 'legitimate expectation'... as a foundation for attracting a duty of procedural fairness, the concept has been accepted and adopted by this Court as denoting expectations which go beyond enforceable legal rights It is the presence of a legitimate expectation which conditions the existence of a claimant's right to procedural fairness and the corresponding duty of the decisionmaker to observe procedural fairness in the treatment of the claimant's case. The content of that duty is dependent upon the circumstances of the particular case, but its existence is determined by reference to legal principle. So a legitimate expectation may be created by the giving of assurances the existence of a regular practice the consequences of denial of the benefit to which the expectation relates or the satisfaction of statutory conditions Although a legitimate expectation may take the form of an expectation of a substantive right, privilege or benefit or of a procedural right, advantage or opportunity, it is helpful to avoid confusion between the content of the expectation and the resulting right to procedural fairness In truth, the legitimate expectation in such cases is often simply that the benefit will not be denied or taken away. The 'expectation' that the claimant will be heard ordinarily follows of itself from the primary legitimate expectation." A legitimate expectation attracting a duty of procedural fairness has been created by ad hoc assurances given by persons in authority without statutory backing. See Salemi v MacKellar (No 2) (1977) 137 CLR 96 and Attorney General (HK) v Ng Yuen Shiu (1983) 2 AC 629 or merely by the existence of a regular practice. See Heatley v Tasmanian Racing Commission (1977) 137 CLR 487 and Council of Civil Service Unions v Minister for the Civil Service (1985) AC 374. 4 UNREPORTED JUDGMENTS The absence of specific statutory authority for the roster scheme is therefore not sufficient to exclude a duty of procedural fairness. The claimant's case was that the existence of the scheme and its admission to the roster gave rise to a legitimate expectation that it would continue to participate in the scheme. Accordingly a duty of procedural fairness was attracted and the claimant could not be validly excluded from the scheme by a decision arrived at in breach of that duty. In our view the claimant did establish a prima facie case that it had a legitimate expectation of remaining on the Mt Druitt tow roster which attracted a duty of procedural fairness in the Patrol Commander at Mt Druitt. Accordingly Windeyer J fell into error in concluding, for the reasons he gave, that the claimant had failed to establish that there was a substantial question to be tried. The claimant therefore has made out a case for the grant of leave to appeal. However, as earlier stated, it needs urgent interlocutory relief as well. We are reluctant to grant such relief ourselves because it was not asked for on the hearing of the leave application, and the claimant did not seek to have the hearing of that application treated as the hearing of the appeal. An application by the claimant to this Court for an interlocutory injunction pending the hearing of the appeal may have been original in nature, rather than by way of appeal. If that were the case the parties could file further evidence and would not be confined to the evidence before Windeyer J. It would not be appropriate for this Court to embark on a hearing of this nature. In its summons the claimant sought an expedited hearing of the appeal but in the absence of interlocutory relief such a hearing of an interlocutory appeal would be without practical utility. In the circumstances the appropriate course in our view is to refuse leave to appeal. We have indicated our conclusion that Windeyer J fell into error in holding that the claimant had failed to establish the existence of a substantial question to be tried. The claimant was always free in theory to renew its application for an interlocutory injunction before another judge of the Equity Division. Compare Carr v Finance Corporation of Australia (1981) 147 CLR 246 at 248, 254-256. Our intimation in these reasons that on the materials before Windeyer J the claimant had established the existence of a substantial question to be tried will enable it, if so advised, to renew its application to a judge in the Equity Division for an interlocutory injunction. It will be for the judge hearing any such application to determine on the materials before him, which may differ from those presently before us, whether in all the circumstances an interlocutory injunction should be granted. In the circumstances we either could not or should not interfere with the costs order made by Windeyer J but we will order that the costs of the application for leave to appeal be the parties' costs in the proceedings in the Equity Division. We make the following orders: 1. Leave to appeal refused. 2. Costs of the application for leave to be costs in the proceedings in the Equity Division. Counsel for the claimant: G Downes QC/N Francey Solicitors for the claimant: Smythe and Mallam Counsel for the opponent: D Cowan UREY'S PRESTIGE SMASH REPAIRS PTY LTD v LAUER AND ORS (Mahoney, Clarke an@ Handley JJA) Solicitors for the opponent: HK Roberts, State Crown Solicitor