DARLING CASINO LTD v NEW SOUTH WALES CASINO CONTROL AUTHORITY and ORS SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KirBy P, POWELL and COLE JJA 3 and 4 October 1995, 8 November 1995 [1995] NSWCA 117 ADMINISTRATIVE LAW — privative provision — exclusion of judicial review — express exclusion of review for natural justice — construction of exclusion — purpose of legislation — held: exclusion effective — judicial review unavailable. GAMING — casino — licence — unsuccessful bidder challenges lawfulness of grant of licence — held: judicial review excluded by clear statutory provisions. STATUTES — construction — history of legislation — amendment to accord with report recommendation excluding judicial review for natural justice — significance of. WORDS and PHRASES — "decision". ADMINISTRATIVE LAW — privative provision — exceptional statutory terms — grant of licence to operate casino — establishment of statutory authority to grant licence — requirement of high probity of members of authority — provision that grant requires agreement of four out of five members — express exclusion of requirement to act in accordance with natural justice — exclusion of judicial review and obligation to state reasons — ministerial speech to Parliament explains provisions by reference to inquiry into legislation and recommendations thereof — challenge to decision to grant licence on the basis that it denied natural justice or misconstrued the Act and was unreasonable — whether such challenges within privative provision of the Act providing that "a decision of the Authority under this Act is final and is not subject to appeal or review" GAMING — casino — licensing of — grant of licence to applicant — provision in legislation establishing authority with power to grant licence excluding judicial review — scope of privative provision — purpose of legislation — duty of Court to give effect to — requirement to look at entire legislation and to give meaning to its terms according to its purposes — clear purpose to exclude judicial review and to deny review for natural justice — upon complaints made concerning the lawfulness of the decision of the Authority to grant the licence WORDS AND PHRASES — "decision" — "final and not subject to appeal or review". Held: (reversing Hulme J) (1) The test to be applied is that stated in The King v Hickman and Ors; Ex parte Fox and Anor (1945) 70 CLR 598; The Queen v Coldham and Ors; Ex parte The Australian Workers' Union (1982) 153 CLR 415; Deputy Commissioner of Taxation v Richard Walter Pty Ltd (1995) 127 ALR 21 (HC); (2) By the application of that test, the privative provision in the Act was wide and was intended to exclude the decision to grant the licence; (3) Accordingly, the primary judge ought to have dismissed the proceedings challenging the grant of the licence and the Court of Appeal would now do so; (4) Subsidiary questions concerning the terms of the statement of claim and the arguability of points therein did not, therefore, arise for determination. 2 UNREPORTED JUDGMENTS Held: (reversing Hulme J): (1) "The decision" of the Authority was a decision under the Act, being a bona fide attempt to exercise the Authority's power and relating to the subject matter of the legislation such that it was reasonably capable of reference to the power given to the body; (2) Accordingly, by s155 of the Casino Control Act, 1992 the decision was not subject to appeal or review and the purported application for review must be dismissed. Casino Control Act, 1992, s12, s17, 18, s141, s148, s155, Kirby P I agree with Cole JA. Powell JA I agree with Cole JA. Cole JA The successful applicant for the Casino licence in New South Wales was Sydney Harbour Casino Pty Ltd (SHC). The unsuccessful short listed applicant was Darling Casino Limited (DCL). The licence was granted by the New South Wales Casino Control Authority (the Authority) pursuant to s18(1) Casino Control Act 1992. Pursuant to the same section the Authority declined to grant a licence to DCL. DCL commenced proceedings in the Administrative Law Division seeking orders quashing and setting aside both the grant and refusal of a licence to SHC and DCL respectively, and seeking consequential relief. The proceedings were commenced by way of a summons and were progressed by an amended statement of claim. In those proceedings the Authority was the first defendant, SHC the second defendant and the Minister for Gaming and Racing the third defendant. DCL also filed a motion seeking discovery of documents by the defendants. SHC, by motion, sought that the whole of the proceedings "be dismissed on the basis that the plaintiff is not entitled to the relief sought by reason of the provision of s155 of the Casino Control Act 1992" (the Act). Alternatively, certain portions of the statement of claim were sought to be struck out. The other defendants supported SHC's application. Additionally, SHC challenged DCL's right to discovery, relying upon provisions of the Act. Hulme J delivered two judgments on 31 May 1995. His Honour declined to accede to the application to dismiss the proceedings but struck out certain portions of the summons and the amended statement of claim. Regarding discovery, his Honour proposed orders which would require discovery on certain limited topics. From these decisions each of SHC, DCL, the Authority and the Minister have appealed. Amended notices of cross-appeal filed on behalf of the defendants each seek orders that the whole of the proceedings be dismissed. If those contentions are upheld, the other matters raised by the various parties on appeal do not arise for determination. It is thus convenient to address that question first. This Court granted to each of the parties leave to appeal. It was contended by SHC that the leave granted to DCL to appeal should be revoked. The preferable course is to consider the argument addressed to the Court concerning the central contention that s155 of the Act precludes the Court from reviewing the challenged decisions. THE STATUTORY FRAMEWORK S155 of the Act provides: "(1) Except as otherwise provided in this section, a decision of the Authority under this Act is final and is not subject to appeal or review. (2) A person aggrieved by a decision of the Authority to cancel or suspend a casino licence or to amend the conditions of a casino licence may appeal from the decision to the Supreme Court on a question of law. WRARLING CASINO LTD v NEW SOUTH WALES CASINO CONTROL AUTHORITY an@ ORS (Cole JA) (Cole JA) (3) The Supreme Court is to hear and determine the appeal and make such order as it thinks appropriate by reason of its decision, including, without limiting the Court's power to make such orders: (a) an order affirming or setting aside the decision of the Authority; and (b) an order remitting the matter to the Authority to decide again in accordance with the directions of the Court. (4) Proceedings or an appeal in respect of a decision of the Authority do not operate to stay the decision appealed from unless the Supreme Court otherwise orders." SHC contends that s155(1) is a privative provision which prohibits the Court from entertaining DCL's action which, in truth, seeks to challenge the finality of the decisions of the Authority to grant a casino licence to SHC and to decline to grant a licence to DCL. At the heart of this appeal is the width of the construction to be given to s155(1). All parties accepted before this Court that the proper approach to construction of a privative section such as s155 is that enunciated by Dixon J in The King v Hickman Ex Parte Fox and Anor!. His Honour said: "The particular regulation is expressed in a manner that has grown familiar. Both under Commonwealth law, and in jurisdictions where there is a unitary constitution, the interpretations of provisions of the general nature of Reg17 is well established. They are not interpreted as meaning to set at large the courts or other judicial bodies to whose decision they relate. Such a clause is interpreted as meaning that no decision which is in fact given by the body concerned shall be invalidated on the ground that it has not conformed to the requirements governing its proceedings or the exercise of its authority or has not confined its acts within the limits laid down by the instrument giving it authority, provided always that its decision is a bona fide attempt to exercise its power, that it relates to the subject matter of the legislation, and that it is reasonably capable of reference to the power given to the body."2 The classic statement by Dixon J has been discussed in many cases during the last 50 years. It is sufficient to note its recent acceptance by the High Court in The Queen v Coldham and Ors}, O'Toole v Charles David Pty Ltd4, and most recently in Deputy Commissioner of Taxation v Richard Walter Pty Ltd5. In the light of this last decision, DCL accepted, contrary to the position adopted before Hulme J, that the principles enunciated in Hickman applied to the circumstances of this case and were not limited to the cases concerned with constitutional restrictions. As has so often been said, the so called "Hickman principle" reconciles: "... the prima facie inconsistency between one statutory provision which seems to limit the powers of the [repository of the power] and another provision, the privative clause, which seems to contemplate that the [repository's] order shall operate free from any restriction'. The reconciliation is effected by 'reading the two provisions together and giving effect to each'. The privative clause is given effect despite non-compliance with the provisions governing the exercise of the power, but only if the purported exercise is a bona fide attempt to exercise the 1. (1945) 70 CLR 598 at 614-615. 2. (1945) 70 CLR 598 at 614-615. 3. (1982) 153 CLR 415 at 421-422, 428. 4. (1991) 171 CLR 232 at 248, 274, 286. 5. (1995) 127 ALR 21 at 25, 36, 50, 59, 67, 72. 4 UNREPORTED JUDGMENTS power, it relates to the subject matter of the legislation and it is reasonably capable of reference to the power given to the body purporting to exercise it. The validating provisions cannot be so construed if the impugned act by the repository of the power is not referable to the power given to the repository or it exceeds the power which can constitutionally be given to the repository. The Hickman principle has been invoked where a privative clause in a statute is expressed to exclude the jurisdiction of a court judicially to review a purported exercise of a power which, by virtue of other provisions of the statute, can be validly exercised only if the repository complies with prescribed conditions. The privative clause treats an impugned act as if it were valid. Insofar as the privative clause withdraws jurisdiction to challenge a purported exercise of power by the repository, the validity of acts done by the repository is expanded."6 Ultimately, the question becomes one of construction of the relevant statute to determine whether the Parliament, by means of the privative clause, has enacted that the courts are not to have authority to review a particular decision, or to hear a challenge to its finality7. That is so where no question of the constitutional validity of the exercise of function by the Authority is concerned'. In considering the construction of privative clauses prohibiting challenge in the courts, close examination is given to the terms of any such provision because it deprives a citizen of the right to challenge an administrative act affecting proprietary or other rights. Nonetheless, the court must give effect to the intention of Parliament as disclosed in the privative provision when properly construed. An unusual and critical feature of the Act when approaching the construction of s155(1), is the provisions of s141(4). It provides: "Tn the exercise of its functions, the Authority is not required to observe the rules of natural justice (except to the extent that it is specifically required to do so by this Act)." It must follow that any challenge to the exercise by the Authority of its functions grounded upon a failure to observe the rules of natural justice must, with irrelevant exceptions, fail. The dual provisions of s141(4) and s155(1) illustrate the extent to which the legislature has sought to make clear that the usual bases upon which administrative actions may be challenged are not to apply to the exercise of the functions of the authority, including its function of determining to grant or decline to grant a licence provided in s18. Thus, insofar as any denial of procedural fairness in the exercise of its functions constitutes a departure from the rules of natural justice, the legislature has, in explicit terms, purported both to remove the requirement for procedural fairness and deny the right of review of or appeal from any decision involving departure from natural justice. The legislature has sought to put to one side, in this particular case, such departures or denials as a ground of challenge to the authority's decision?. THE ALLEGATIONS IN THE STATEMENT OF CLAIM DCL alleged that in May 1993 the Authority publicly invited expressions of interest for and applications for a casino licence. It issued a document entitled "Invitation Document", which defined a "close associate" of an applicant, and required that applications for the licence be lodged by 3 pm 18 June 1993. It (1995) 127 ALR 21 at 37 per Brennan J. DCT v Walter (1995) 127 ALR 21 at 25-26 per Mason CJ. . Re Australian Railways Union; ex parte Public Transport Commission (1993) 67 ALJR 904 at 909-910. 9. Compare Kopuz v District Court of NSW and Anor (1992) 28 NSWLR 232 at 245. eu WRARLING CASINO LTD v NEW SOUTH WALES CASINO CONTROL AUTHORITY an@ ORS (Cole JA) (Cole JA) provided for the review and assessment process of applications to be conducted in 3 stages, stage 1 being expressions of interest and applications, stage 2 being submission preparation by applicants, and stage 3 being the short listing of applicants. Applicants were required to advise the Authority of their supporting corporate structure during stage 2. Each stage of the process was to be complied with on time. On 18 June 1993 DCL lodged its expression of interest and application together with the required fee of $10,000. On 2 July 1993, the authority issued a document entitled "Brief to Applicants" providing to the applicants details of information the Authority would require, information regarding development issues, legal financial and general corporate issues, and the requirements relating to the probity and integrity of applicants and their close associates. The Brief contemplated the preparation of a short list of applicants, the subsequent selection of a Preferred Applicant and ultimately, after further consideration, the determination of the successful applicant to whom the licence would be granted. The design of the casino was required to follow principles set out in the Sydney Regional Environmental Plan No. 26 (REP 26). Prior to execution of contractual agreements with the successful applicant, it would be required to submit an appropriate development application. The initial brief was subsequently amended by the Authority in a number of ways. On 26 August 1993 the Authority announced that four applicants had lodged funds with the Authority preliminary to proceeding to stage 2. It was announced that discussions would be held with those four applicants. On 22 November 1993 DCL lodged its response to the brief together with the fee of $200,000. This "Proposal" was presented to the Authority on 8 December 1993. Prior to this, on 6 December 1993, the authority announced that three applicants were competing for the Casino licence, including DCL and SHC. It anticipated that these three applicants would be reduced to two by 24 January 1994, with the announcement of the Preferred Applicant by 15 April 1994. The announcement stated that applicants could "be sure" that the Authority would operate the selection process in accordance with the Act, the Invitation and the Brief, and would ensure that all applicants were given a fair and equal opportunity to present their applications. On 24 January 1994 the Authority announced its decision to short list two applicants, being DCL and SHC. On 21 April 1994 the Authority requested the relevant Minister to approve terms of agreement proposed between the Authority, DCL and associated companies, which approval was given. That document is known as the Compliance Deed. On 22 April 1994 DCL lodged with the Authority its final financial bid, design amendments to the proposal, and executed legal documents including the Compliance Deed. At the same time SHC lodged its corresponding documents, including appropriate covenants and undertakings from companies forming part of the Leighton Group of companies. By CL7.1 and CL7.5 of the Compliance Deed the Authority required the Preferred Applicant, within 20 business days of selection, to submit the complete Development Application consistent with the Preferred Applicant's proposal except for modifications agreed with the Authority. Each of the two applicants was prevented by the Compliance Deeds from modifying the development application unless the modification was made 6 UNREPORTED JUDGMENTS pursuant to an application under s142 Environmental Planning and Assessment Act and unless such modification was consistent with the general design concept in the respective applicant's proposal. On 6 May 1994 the Authority announced that SHC was nominated as the Preferred Applicant, and that it was sponsored by Leighton Properties Pty Ltd and the US casino operator, Showboat Inc. It noted that an impressive financial offer for the casino licence had been received from SHC. Between May and August 1994 there were media reports concerning the involvement of persons associated with the Leighton group in unfair building practices examined in the NSW Building Industry Royal Commission, together with allegations that persons associated with Showboat's business activities were persons of bad repute. In consequence, on 16 August 1994 the Authority determined pursuant to s143(4) to hold a public inquiry into the probity of SHC and its close associates. Mr M H Tobias QC, a member of the Authority, was appointed to preside at the inquiry and the Authority's powers were delegated to him pursuant to s148(2)(a). The inquiry opened on 31 August 1994. On 6 September 1994 Mr Tobias advised that the procedures proposed to be adopted included the hearing in public of DCL's evidence regarding the probity of SHC and permitting the Leighton and Showboat interests to respond. It was announced that the Authority would itself through its own investigative team and the Director of Casino Surveillance conduct its own investigations. The inquiry proceeded from 31 August 1994 to 28 November 1994. It is alleged that SHC and the Leighton Group concealed from both the Authority and the inquiry "the full extent of Leighton's involvement in the practice of issuing false invoices and charging undisclosed tender fees in the NSW Building industry", but that involvement emerged in cross-examination at the inquiry. On 5 September 1994 Leighton Properties Pty Ltd requested the Authority to approve the transfer of its 5% shareholding in Sydney Harbour Holdings Limited and its 15% shareholding in Sydney Casino Management Limited to an independent trustee approved by the Authority whilst probity issues were resolved by the inquiry. Whilst the inquiry was being conducted, DCL made submissions to the Authority directly concerning whether Leighton continued to be a "close associate" or "business associate" of SHC, and concerning the Authority's power to allow changes to be made at that time to SHC's application. The Authority responded that it was inappropriate for the Authority to concern itself regarding questions of "close associates" or "business associates", as those matters were within the jurisdiction of the inquiry conducted by Mr Tobias. It denied that DCL had any rights concerning matters raised. At the inquiry on 30 September 1994, DCL sought details regarding whether the trust proposal announced publicly by Leighton on 5 September 1994 had been advised to the Authority in order that it might advance submissions regarding the question of "close associates of the Preferred Applicant'. In substance, Mr Tobias QC advised that no document had been received by the Authority. Mr Tobias stated: "The way I propose to proceed is on the evidence that is before me and if there's no evidence of any trust, the issue of probity will be determined on that basis, as will the issue of close associate. If that position changes no doubt everyone will be informed." WRARLING CASINO LTD v NEW SOUTH WALES CASINO CONTROL AUTHORITY and ORS (Cole JA) (Cole JA) At various times during the inquiry DCL sought from the Authority access to agreements concerning SHC's proposed management and _ partnership agreements related to the proposed operation of the Casino. Access was refused. DCL alleges that Mr Tobias advised that the Authority as a whole would receive submissions from the parties to the inquiry concerning probity issues related to close associates of SHC. In consequence, DCL alleges it had a "legitimate expectation" that the Authority as a whole would have regard to any such submissions and that it would be notified of any amendments to SHC's application and be given the opportunity to make submissions regarding any proposed changes prior to the Authority determining SHC's application. On 6 December 1994, after the conclusion of the inquiry, DCL made written submissions to members of the Authority regarding whether Leighton was a close associate of SHC, regarding submissions put by Counsel assisting the inquiry that Leighton was not suitable to be involved in the management or operation of the casino but that Leighton should be able to maintain its economic or financial interests in SHC, regarding the effect that the complete withdrawal of Leighton would have on SHC's application, regarding the Authority's lack of power to consider and determine the materially altered application by SHC, and regarding the effects of design changes to SHC's proposed casino complex. Additional submissions were advanced on 7 December 1994 concerning probity issues said to effect both Leighton and Showboat. In December 1994 Mr Tobias QC reported to the Authority the results of his inquiry. He found that, for the purposes of s12 of the Act, neither Mr W King nor Mr V Vella was of good repute having regard to character, honesty and integrity, that in view of the influence of each of Messrs King and Vella over the day to day affairs of Leighton Holdings Limited and Leighton Properties Pty Ltd, for the purpose of s12(2)(a) of the Act, neither of those companies was of good repute, and nor was Leighton Contractors Pty Ltd. The report was made public on 15 December 1994. It is alleged that during December, and prior to 14 December 1994, SHC provided to the Authority various changes to its application which changes were accepted in pursuance of s17 of the Act. During December the Authority requested the appropriate Minister to approve variations in the terms of the agreements, including the Compliance Deed, between the Authority and SHC, and the Minister gave such approval. It is contended that the Minister gave approval without giving DCL the opportunity to be heard concerning the changes. DCL alleges that on or prior to 14 December 1994 the Authority permitted SHC to amend its financial offer announced on 6 May 1994. The consequence was that SHC paid to the Authority a non-refundable sum of $367 million prior to the grant to it of the licence. On 14 December 1994 the Authority concluded that Showboat was of good repute, Leighton and certain of its officers were not of good repute, but that Leighton and its officers had ceased to be close associates of SHC by reason of placing the shareholding and management interests of Leighton in a trust with National Mutual Trustees Limited. Pursuant to that trust the trustee was required to dispose of Leighton's shares and partnership interest in SHC within 5 years, to refrain from exercising any voting rights or influencing the appointment of directors, to grant a proxy to the chairman of the boards of Sydney Harbour Casino Holdings Limited and Sydney Casino Management Limited to be exercised in accordance with the majority view of shareholders of those companies, and was required to accumulate all income derived from the Leighton 8 UNREPORTED JUDGMENTS shares to be part of the asset ultimately sold. Further, the Authority concluded that the suitability of SHC and its close associates to be concerned in or associated with the management operations of the casino were not affected by the nature of the limited continuing business association with Leighton, the only continuing direct business association between SHC and Leighton being the development and building obligation of the Leighton companies. Consistent with that, on 14 December 1994 the Authority resolved to determine application of SHC pursuant to s18 by granting a casino licence to SHC, and to determine the DCL's application by declining to grant it a licence. The statement of claim alleges that the Authority had the following legal duties: (a) a duty to ensure that both applicants were given a fair and equal opportunity to present their application; (b) a duty to operate the selection process in accordance with the Act, the invitation and the Brief; (c) a duty to exercise its powers and performance functions and duties in accordance with the law; (d) a duty not to grant an application for a casino licence unless SHC and each of its close associates was a suitable person to be concerned in or associated with the management and operation of a casino; (e) a duty to carry out all such investigations and inquiries as it considered necessary to consider the applications properly; and (f) a duty to comply with the principles of natural justice and procedural fairness.10 Those duties were alleged to be breached in respect of three decisions. The first decision was the grant of SHC's application. This decision was attacked upon the following grounds: (i) denial of natural justice and procedural fairness; (ii) estoppel; (iii) non-adherence to a duty to ensure equal treatment; (iv) non-adherence to a duty to adhere to published procedures; (v) non-adherence to a duty to make adequate inquiries; (vi) Failure to properly construe obligations arising from s12 regarding the suitability of SHC and each of its close associates to be concerned in or associated with the management and operation of a casino; (vii) misconstruing s17 so as to permit in substance a new application rather than merely the updating of an existing application; (viii) misconstruing s18 and its obligations thereunder; (ix) the unreasonableness of determining that SHC, Showboat and Leightons were either suitable persons, or, being close associates, were suitable persons, and that being such unsuitable persons, did not remain "close associates" within s13. Having failed properly to determine both the suitability and close associate aspects, the authority was said to be denied jurisdiction to grant the licence; and (x) failure to consider or give adequate weight to relevant considerations and the taking into account of irrelevant considerations. The second decision challenged was the mirror of the first, namely, the declining to grant DCL's licence. That decision was challenged on two bases. First, it was contended that as DCL's application was refused only because SHC's licence was granted, and as that grant was wrongly made, so too was the refusal. 10. Statement of Claim, para84. WRARLING CASINO LTD v NEW SOUTH WALES CASINO CONTROL AUTHORITY an@ ORS (Cole JA) (Cole JA) Second, it was asserted that the applicant DCL was denied natural justice and procedural fairness regarding its application. The third decision challenged was the Minister's approval of variations to agreements between the Authority and SHC. That approval was also challenged on two bases, namely a denial of natural justice and procedural fairness and, second, that as the variations were connected with an invalid grant of licence they could not be lawfully approved by the Minister pursuant to s142. THE CONSTRUCTION OF s155 IN RELATION TO THE DECISIONS CHALLENGED In seeking to escape the clear words of 155, which would render each of the three decisions challenged "final" and "not subject to appeal or review", DCL has contended that such decisions are not decisions of the Authority "under this Act". They were said to be decisions "beyond the jurisdiction conferred on the Authority by the Act" and thus were beyond the operation of s155. In support of its argument it was contended that s155 should be construed as not disclosing an intention to render immune from review a decision of the Authority beyond its jurisdiction. Such a proposition was at least arguable, and thus the statement of claim should not be struck out. It was argued that the principles enunciated in Hickman did not apply to "decisions" if they were "tainted by jurisdictional error'. S155 applied only in relation to decisions within jurisdiction. In my opinion that submission must fail. Hickman made clear that the circumstance being addressed was a circumstance where the decision "in fact given by the body concerned" was not to be invalidated on the ground that the decision making body "has not confined its acts within the limits laid down by the instrument giving it authority", provided certain provisos were met. Thus it was addressing, amongst other matters, decisions beyond jurisdiction. Such decisions were not invalid if the decision was a bona fide attempt to exercise the body's powers, if the decision related to the subject matter of the legislation, and if the decision was reasonably capable of reference to the power given to the body. Each of these provisos is clearly satisfied in relation to the decision of the Authority to grant the licence to SHC, to decline to grant the licence to DCL, and to permit amendment of documents relating to the structural, financial and management arrangements concerned with the licence granted. It follows, in my view, that s155 prohibits the challenge contained in the summons and statement of claim to the three decisions of the Authority there challenged. In consequence the proceedings should have been, and must be, dismissed. That s155 is to have the construction to which I have referred is clear from its terms. That is was intended by the Parliament to have that operation is clear from a consideration of the history of its enactment. On 6 August 1991 the New South Wales Government approved the public release of the Casino Control Bill 199111. The Government also announced the appointment of the Honourable Sir Laurence Street AC KCMG to conduct an inquiry into various aspects of the establishment and operation of legal casinos. One of the terms of reference of that inquiry was to report "on the adequacy of the principles of the proposed legislation to ensure that: * the management and operation of casinos remains free from criminal influence and exploitation. * casinos are not used to dispose of and launder proceeds of criminal activity. * gaming in casinos is conducted honestly. 11. Appeal Book, vol 4, at 5. 10 UNREPORTED JUDGMENTS CL153 of the Bill provided: "(1) Except as otherwise provided in this section, a decision of the Authority under this Act is final and is not subject to appeal or review. (2) A person aggrieved by a decision of the Authority to cancel or suspend a casino licence or to amend the conditions of a casino licence may appeal from the decision to the Supreme Court on a question of law. (3) The Supreme Court is to hear and determine the appeal and make such order as it thinks appropriate by reason of its decision, including, without limiting the Court's power to make such orders: (a) an order affirming or setting aside the decision of the Authority; and (b) an order remitting the matter to the Authority to decide again in accordance with the directions of the Court. (4) An appeal lies to the Supreme Court from a decision of the authority on the grounds of a failure by the Authority to observe the rules of natural justice. (5) Proceedings on an appeal in respect of a decision of the Authority do not operate to stay the decision appealed from unless the Supreme Court otherwise orders." Sir Laurence Street reported to Government. His report stated: "6.2 AMENDMENTS TO THE DRAFT BILL 6.2.1 I consider that there are three matters in the draft bill which should be amended so as to strengthen the regulatory system. Two of these relate to the Authority's discretion to act, and to its accountability. It is desirable that the Authority have the confidence to exercise its powers, if necessarily arbitrarily, in pursuit of its objects. It needs a wide discretion and needs to be free from the risk of legal challenges. On the other hand, this discretion should be balanced by greater accountability to Parliament. There is also an incidental aspect of the Authority's information-gathering powers which should be addressed. Limited Right of Appeal 6.2.2 The Bill in CL153 heavily circumscribes the situation in which a decision of the Authority may be reviewed or challenged on appeal. 6.2.3 The Bill includes, however, a right of appeal to the Supreme Court from a decision of the Authority on the grounds of a failure by the Authority to observe the rules of natural justice (CL153(4)). I am of opinion that this provision should be deleted and that the Authority should be expressly released from any obligation to observe the rules of natural justice. I state this opinion in full and respectful awareness of the views expressed in the 1991 Connor Report (para6.13). I have preferred to draw upon my own experience in assessing the restrictive and obstructive potential of a natural justice requirement. Moreover, the Victorian legislation did not adopt this particular requirement in the Connor Report. 6.2.4 The Authority needs to be free to take into account criminal intelligence and to act on material and by procedures that might well fall short of the requirements of natural justice. It has an important public duty to administer the licensing system in the public interest. Protection from criminal infiltration and activity is to the forefront of its responsibilities. It must be able to act swiftly and decisively if it considers the circumstances call for such action. The nature of its membership should be accepted as a significant assurance of fairness. The nature of its membership should be accepted as a significant assurance of fairness. To go further, as does the Bill in CL153(4), would hamper it and be potentially detrimental to public interest. Challenges on the natural justice ground are easy to formulate, whether the decision in question be as important for example as WRARLING CASINO LTD v NEW SOUTH WALES CASINO CONTROL AUTHORITY and ORS (Cole JA) (Cole JA) refusal of a licence to an entity with notorious, but not provable, criminal links, or as peripheral for example as refusing to hear a mass of evidence on whether operating times should be responsive to daylight saving changes. If the Authority is to function effectively on the public interest, appeals from its decisions should be confined to those permitted under CL153(2) namely appeals to the Supreme Court on a question of law against decisions to cancel or suspend a casino licence or to amend the conditions of a casino licence. 6.2.5 As well as recommending the deletion of CL153(4), I am of the view that there should be added to CL139, the clause that prescribes the functions of the Authority, a further sub-clause to the effect that in exercising its functions the Authority shall not be bound to observe the rules of natural justice." Later in his report, Sir Laurence Street addressed aspects of the process of selection of the licensee. He wrote: "7.4.1 I am of the view that sound policy requires that an independent authority have responsibility for the selection of an operator. The provisions of the draft Bill are demonstrably and commendably clear in assigning this responsibility to the Casino Control Authority. The Authority should be well established before the selection process is begun. The responsibilities and discretion which the Authority needs to exercise require considerable preliminary input from its members and staff. Procedures must be determined, design, corporate and operational criteria established and documents to brief applicants prepared. The process will be efficient and effective only with thorough preliminary planning by the Authority. Discretionary Powers of the Authority 7.4.2 The draft Bill gives the Casino Control Authority wide discretions in the determination of licence applications and in the continuing control over licence holders. It also protects the Authority from challenge. No appeal on a question of law is permitted regarding a decision to grant a licence. It is my view that the Authority should also be expressly relieved from the obligation to observe the rules of natural justice. This extends to all of the Authority's functions. I have stated my reasons for this view in para6.2.4. Determination of Applications 7.4.10 There is little guidance in the draft legislation as to how the assessment of applications for a casino licence is to be considered. It is clear that the Authority cannot delegate its functions of determining licence applications under CL15. The Authority has power to hold public or private inquiries (CL141). Procedures at its own meetings are to be determined by the Authority (Sch CL13). A decision to grant a casino licence requires the support of 4 of the 5 members of the authority to be valid (Sch CL16(2)). This recognises the need for consensus, without insisting on unanimity which could at times to impossible to obtain. In other matters the Authority's discretion is exercisable by a simple majority vote. 7.4.11 Bearing in mind the matters which the Authority has to consider, I do not consider that a public hearing of the type envisaged in the 1991 Connor Report is advisable. I refer to my earlier comments regarding the requirements of natural justice (para6.2.2-para6.2.5). A public hearing procedure is not followed in other Australian jurisdictions (The New Zealand Casino Control Act 1990 created the Casino Control Authority as a Commission of Inquiry which will conduct hearings before granting licences for casinos.), and the recommendation in the 1991 Connor Report was not adopted in the Victorian legislation. Whilst, 12 UNREPORTED JUDGMENTS it could promote public confidence in the licensing process, it has major disadvantages. There are adequate checks and balances in the draft Bill to ensure a fair and comprehensive evaluation. Moreover, it is quite likely that both applicants and the providers of information would, for different reasons, prefer a closed investigatory procedure. The assurance of regularity and public confidence will come from the stature of the membership of the Authority, and from the reporting requirements and other accountability mechanisms. Criteria for Determination of Applications 7.4.12 The prescribed criteria for considerations by the Authority (CL10(2)) leave no doubt that the probity and suitability of the successful applicant will have been fully considered. In order to ensure that sources of finance are free of taint, I recommend that the requirement in CL10(2)(d) that the authority consider whether the applicant has adequate financial resources should be amended to read adequate suitable financial resources." It is clear that the Street Report contemplated that the grant of the licence by an Authority comprised of five persons, four of whom must agree to the grant, such persons being persons of the highest integrity and with special skills!2, was not to be subject to challenge in the courts either on grounds of departure from principles of natural justice, or otherwise. The safeguard of judicial review of the administrative action of granting the licence was intended by the Street Report to be replaced by extensive investigation and ultimately decision by persons of high integrity. This was thought necessary to prevent lengthy and repetitive legal challenges which might emasculate the allocation process, or delay it unacceptably. In her second reading speech, the Chief Secretary and Minister for Administrative Services adopted the Street recommendations. She said: "... Iam proud that Sir Laurence's objective and comprehensive findings endorse this legislation. And I am proud that where critical, this Government has not shirked its community responsibilities to take up Sir Laurence's recommendations. The bill as presented to the Parliament embodies the structures and mechanisms which Sir Laurence found to be fully adequate. The recommendations which Sir Laurence made to further strengthen the bill have been taken up by this Government. I now turn to a closer examination of the important principles of the legislation. The bill contains measures to ensure that casino operations in New South Wales will be conducted in the public interest, and to the highest order of integrity. The object of the bill is to provide for the legal establishment of two legal casinos in New South Wales and to control their operations. The bill provides that gaming in the casinos is lawful where it is conducted by or on behalf of the holder of a casino licence. Incorporated in the bill are principles for the allocation of the functions of government. The public policy function of determining the size of the casino market in New South Wales is reserved for Parliament itself through this legislation. The function of allocating licences to casino operators is the process of deciding who shall be permitted to operate in the market. This is seen as the domain of the proposed Casino Control Authority, a statutory body. The authority will also licence key employees. Day to day surveillance of casinos will be vested in a separate entity... 12. See s135-s136. WRARLING CASINO LTD v NEW SOUTH WALES CASINO CONTROL AUTHORITY ana ORS (Cole JA) (Cole JA) A determination as to the location of the casinos will be able to specify a particular site only if that site is owned by the Crown. In other cases the Minister is empowered to specify a general locality only. The Minister will then be able to direct the authority to call publicly for expressions of interest in line with the determination. The Minister will also be able to direct the authority to invite applications publicly for a casino licence in line with the Minister's determination. The authority will be required to provide the same information to all parties expressing interest. In determining applications for a licence the authority will be required to take certain matters into account. Generally, these matters include: the suitability of and integrity of the applicant and close associates of the applicant; the standard and nature of the proposed casino, and the facilities to be provided in and with it; the likely impact of the casino on tourism, employment and economic development generally in the region; and the expertise of the application having regard to the obligations of a casino licensee. The bill will impose strict probity requirements on who may be granted a casino licence. The authority must consider whether an applicant and associates of the applicant are of good repute, having regard to character, honesty and integrity. The authority must also consider the financial background and viability of an applicant and their experience and business ability in the management of the operation of casinos. The authority will be prohibited from granting a licence unless it is satisfied that the applicant is a suitable person to be associated with the conduct of a casino. The test of suitability is one which must be applied by the authority in the light of the obligation imposed upon the authority by this bill to ensure that the management and operation of casinos is free from criminal influence and exploitation. This is an obligation which requires that the authority rigorously assess the suitability of those persons who seek to involve themselves in the operation of casinos. The authority is empowered by this legislation to be invasive and exhaustive in its search for information and in its probing of the background of individuals. The authority is obliged to carry out these duties diligently and to act to exclude from involvement with the casino any person about whose integrity, honesty and overall suitability the authority has significant doubt. In carrying out its investigations into applicants for casino licences the authority is obliged to obtain reports from the Commissioner of Police and the Director of Casino Surveillance and is at liberty to obtain information from law enforcement agencies and other sources before issuing a licence. Before issuing a licence it is also incumbent on the authority to similarly investigate any person who is or will be an associate of the applicant. The authority will be able to grant a licence subject to conditions. These conditions will be able to be amended at any later time by the authority. Many of the requirements which the bill will impose on each casino will be deemed to be conditions of the licence. A casino licence remains in force for the period for which it is granted unless it is sooner cancelled or surrendered. Surrender is possible only with the authority's consent. Casino licences, when issued, will define the boundaries of the authority's casinos. These boundaries can subsequently be changed only with the approval of the authority. The authority will be able to cancel or suspend a licence; impose a penalty of up to $1 million amend the terms of or conditions of a licence; or issue a letter of censure to the operator. A pecuniary penalty imposed by the authority as a disciplinary measure can be recovered as a debt up to six years after the occurrence of the matter constituting grounds for the measure. 14 UNREPORTED JUDGMENTS The grounds for taking disciplinary action will include: the licence has been improperly obtained; the Act or a condition of the licence is being or has been contravened; the authority believes that the casino premises are no longer suitable; the authority believes that the licensee is no longer suitable; the authority no longer considers it to be in the public interest that the licence should remain in force. Disciplinary action can be decided only at a meeting of the authority attended by a member of the authority with special legal qualifications. Appeals are allowed only against cancellation, suspension or amendment of a licence and the appeals must be to the Supreme Court on point of law only.... Sir Laurence concluded that the public interest in open government is dominated by the public interest in the integrity of the casino industry and that the authority's objects of ensuring the casino industry remains free from criminal activity and dishonest gaming set it apart from the usual public authority. It is on the basis of Sir Laurence's findings that the authority and the division of casino surveillance are not subjected to the requirements for public access to their records. The Government believes that Sir Laurence put a compelling case for information held by these agencies to be exempt from freedom of information access. Instead, the bill grants the casino regulatory agencies a discretion to divulge information in the public interest. This approach consistent with discretions given to the authority throughout the bill, and the limited rights of appeal from individual decisions of the authority. It is also consistent with CL149(3) and CL149(4) which confer, at the authority's discretion, a privilege from production of information in court. Rights of appeal against decisions of the authority are circumscribed in the bill. Appeals to the Supreme Court may be taken only by persons aggrieved by a decision of the Authority to cancel or suspend a casino licence or to amend the conditions of a casino licence - and only on questions of law. A proposal to allow judicial review where there was a failure by the authority to observe the rules of natural justice has been abandoned in line with another of Sir Laurence Street's recommendations. Sir Laurence was firmly of the view that for the authority to have the confidence to exercise its powers in pursuit of its objectives it should be expressly released from any obligation to observe the rules of natural justice. Sir Laurence made the following comments; the authority needs to be free to take account of criminal intelligence and to act swiftly and decisively; the authority can only function effectively in the public interest if appeals on natural justice grounds are banned; the nature of the authority's membership should be accepted as a significant assurance of fairness; his own experience was relevant in assessing the restrictive and obstructive potential of a natural justice requirement. It is also interesting to note that the Victorian legislation did not adopt a natural justice provision. The Government is convinced that the circumstances justify the unusual step of a statutory release from any obligation to observe natural justice rules...". The Minister was correct in describing the legislation as "hallmark legislation" for it conferred quite exceptional powers upon the Authority and other entities created by the legislation, both in relation to the process of selection of the successful applicant for the licence, and in the subsequent operation of the casino. Notwithstanding this grant, the Minister was clear that it was intended that the courts should not have any supervisory power based upon principles of natural justice. It was equally clear that the only appeals to be permitted to the Supreme Court were intended to be against cancellation, suspension, or WRARLING CASINO LTD v NEW SOUTH WALES CASINO CONTROL AUTHORITY ana ORS (Cole JA) (Cole JA) amendment of a licence and then only on a question of law. That intention of the Parliament made clear in the second reading speech by the Minister was enacted in the provisions of s155. The consequence is that the Supreme Court of NSW has no power to hear a challenge to the grant of the casino licence. The appeal of Darling Casino Limited should be dismissed. The cross-appeals of the New South Wales Casino Control Authority, Sydney Harbour Casino Pty Limited and the Minister for Gaming and Racing should be upheld. Darling Casino Limited should pay the costs of those three parties. The orders of Hulme J should be set aside and in lieu thereof the proceedings should be dismissed. I would propose the following formal orders: 1. Appeals of New South Wales Casino Control Authority, Sydney Harbour Casino Pty Ltd and the Minister for Gaming and Racing upheld. 2. Appeal of Darling Casino Limited dismissed. 3. Orders made by Hulme J on 5 June 1995 set aside. 4. In lieu thereof the proceedings be dismissed. 5. Darling Casino Limited is to pay the costs of New South Wales Casino Control Authority, Sydney Harbour Casino Pty Ltd and Minister for Gaming and Racing of the proceedings before Hulme J and of this appeal. 1. Appeals of New South Wales Casino Control Authority, Sydney Harbour Casino Pty Ltd and the Minister for Gaming and Racing upheld. Appeal of Darling Casino Ltd dismissed. Orders made by Hulme J on 5 June 1995 set aside. In lieu thereof order that the proceedings be dismissed. Darling Casino Ltd is to pay the costs of New South Wales Casino Control Authority, Sydney Harbour Casino Pty Ltd and Minister for Gaming and Racing of the proceedings before Hulme J and of this appeal. wRWN COUNSEL: Appellant (DCL): AC Archibald QC/JE Griffiths Respondent: Casino Control Authority and Minister: PD McClellan QC/LS Katz SHC: JC Campbell QC/DB Studdy SOLICITORS: Appellant: Minter Ellison and Co Respondents: Casino Control Authority: Clayton Utz Minister: IV Knight (State Crown Solicitor) SHC: Dunhill Madden Butler