K-generation Pty Ltd and Another v Liquor Licensing Court and Another

• Jurisdiction: Australia Federal only
• Court: High Court
• Judge: Gummow,Hayne,Heydon,Crennan,Kiefel JJ.,Kirby J.
• Judgment Date: 02 February 2009
• Neutral Citation: 2009-0202 HCA A,[2009] HCA 4
• Docket Number: A12/1999
• Date: 02 February 2009

K-generation Pty Limited & Anor

Appellants

and

Liquor Licensing Court & Anor

Respondents

[2009] HCA 4

French CJ, Gummow, Kirby, Hayne and Heydon, Crennan and Kiefel JJ

A12/1999

HIGH COURT OF AUSTRALIA

K-Generation Pty Ltd v Liquor Licensing Court

Constitutional law (Cth) — Chapter III — Judicial power — Vesting of federal jurisdiction in State courts — Licensing Court of South Australia established under Liquor Licensing Act 1997 (SA) (‘Licensing Act’) — Licensing Court constituted by District Court judge — Whether Licensing Court ‘court of a State’ within meaning of s 77(iii) of Constitution — Whether Licensing Court invested with federal jurisdiction by s 39(2) of Judiciary Act 1903 (Cth) (‘Judiciary Act’) — Significance of absence of express power of punishment for contempt.

Constitutional law (Cth) — Chapter III — Judicial power — Vesting of federal jurisdiction in State courts — Integrity of State courts — Requirement of impartiality and independence for repository of federal jurisdiction — Licensing Act, s 28A required Licensing Court to take steps to maintain confidentiality of information classified by Commissioner of Police as ‘criminal intelligence’ in proceedings under Licensing Act — Steps included receipt of evidence and argument in absence of parties — Whether s 28A invalid for denying Licensing Court character of independent and impartial tribunal.

Statutes — Interpretation — Licensing Act, s 28A — ‘Criminal intelligence’ defined to include information which ‘could reasonably be expected’ to prejudice criminal investigations — Whether classification by Commissioner of Police of information as ‘criminal intelligence’ amenable to review by Licensing Court — Whether mandatory for Licensing Court to hear evidence and argument in absence of parties.

Constitutional law (Cth) — Chapter III — Judicial power — Vesting of federal jurisdiction in State courts — Integrity of State courts — Whether consequence of impairment of integrity is that Licensing Court no longer ‘court of a State’ to which s 77(iii) of Constitution applies — Whether s 39(2) of Judiciary Act ambulatory and would cease to apply — Whether States may establish ‘court of a State’ then subsequently deprive court of independence and impartiality.

Constitutional law (Cth) — Chapter III — Judicial power — Nature of judicial power — Whether exercise by Licensing Court of judicial or administrative power.

Practice and procedure — Interveners — Procedure where interveners seek remedy and assert arguments opposed by immediate parties.

Words and phrases — ‘could reasonably be expected’, ‘court of a State’, ‘criminal intelligence’.

Constitution, Ch III, s 77.

Judiciary Act 1903 (Cth), s 39.

Liquor Licensing Act 1997 (SA), s 28A.

Representation:

S C Churches for the appellants (instructed by Starke Lawyers)

Submitting appearance for the first respondent.

M J Hinton QC with S A McDonald and T D McLean for the second respondent (instructed by Crown Solicitor for South Australia)

Interveners

S J Gageler SC, Solicitor-General of the Commonwealth with

C D Bleby intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor)

R J Meadows QC, Solicitor-General for the State of Western Australia with R M Mitchell SC intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor for Western Australia)

M G Sexton SC, Solicitor-General for the State of New South Wales with M L Rabsch intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor for New South Wales)

P M Tate SC, Solicitor-General for the State of Victoria with S P Donaghue intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor)

W Sofronoff QC, Solicitor-General of the State of Queensland with G P Sammon and G J D Del Villar intervening on behalf of the Attorney-General of the State of Queensland (instructed by Crown Law Queensland)

ORDER

Appeal dismissed with costs.

On appeal from the Supreme Court of South Australia

Introduction

1 K-Generation Pty Ltd (‘K-Generation’) is trustee for the K-Generation Unit Trust. Genargi Krasnov is the sole director of the company. He holds 100 units as trustee of the Krasnov Family Trust, of which he and Adeline Tay are beneficiaries.

2 On 20 October 2005, K-Generation made an application to the Liquor and Gambling Commissioner under the Liquor Licensing Act 1997 (SA) (‘the Act’) for an entertainment venue licence. The licence was sought in respect of premises located in the basement and part of the ground floor of 362–366 King William Street, Adelaide to be known as Sky Lounge KTV. It was proposed to fit out the premises as a karaoke venue.

3 The Commissioner of Police for South Australia gave notice of intervention in the proceedings on 28 July 2006. The stated purpose of his intervention was to introduce evidence or make representations on any question before the Liquor and Gambling Commissioner and, in particular, on whether:

‘It would be contrary to the public interest if Mr Genargi Krasnov and Ms Adeline Tay were to be approved as fit and proper persons.’

4 The application was heard by Liquor and Gambling Commissioner Pryor. A police officer tendered information which had been classified by the Commissioner of Police as criminal intelligence pursuant to s 28A of the Act. In reliance upon that section the information was not disclosed to the representative of K-Generation nor to Mr Krasnov. On 17 January 2007, acting upon that information, Commissioner Pryor refused the application on the ground that to grant it would be contrary to the public interest.

5 K-Generation sought review of Commissioner Pryor's decision in the Licensing Court of South Australia. The Court was invited by the parties to determine whether, on the criminal intelligence information alone, the decision of Commissioner Pryor would be upheld.

6 On 12 February 2007, the Court, after having considered the criminal intelligence information, announced its agreement with the view of Commissioner Pryor and made an order affirming his decision.

7 K-Generation and Mr Krasnov (‘the appellants’) instituted proceedings in the Supreme Court of South Australia. They named as defendants the Licensing Court and the Commissioner of Police. They sought a declaration that s 28A of the Act was invalid insofar as it impermissibly interfered with the exercise by the Licensing Court of the judicial power of the Commonwealth. They also sought a declaration that the Court, in affirming the decision of Commissioner Pryor, had failed to observe the requirements of procedural fairness and that the decision of the Court was void and of no effect. They sought orders in the nature of certiorari and mandamus, quashing the decision of the Licensing Court and directing the Court to consider K-Generation's appeal from Commissioner Pryor according to law.

8 On 8 May 2007 Kelly J made an order, by consent, referring the application to the Full Court of the Supreme Court. On 30 August 2007, the Full Court of the Supreme Court by a majority (Duggan and Vanstone JJ) refused the application for the declarations and dismissed the application for judicial review. Gray J dissented.

9 On 23 May 2008, the appellants were granted special leave to appeal to this Court from the judgment and orders of the Supreme Court of South Australia.

10 Section 28A infringes upon the open justice principle that is an essential part of the functioning of courts in Australia. It also infringes upon procedural fairness to the extent that it authorises and effectively requires the Licensing Court and the Supreme Court to consider, without disclosure to the party to whom it relates, criminal intelligence information submitted to the Court by the Commissioner of Police. However, it cannot be said that the section confers upon the Licensing Court or the Supreme Court functions which are incompatible with their institutional integrity as courts of the States or with their constitutional roles as repositories of federal jurisdiction. Properly construed the section leaves it to the courts to determine whether information classified as criminal intelligence answers that description. It also leaves it to the courts to decide what steps may be necessary to preserve the confidentiality of such material. The courts may, consistently with the section, disclose the material to legal representatives of the party affected on conditions of confidentiality enforced by undertaking or order. It leaves it open to the courts to decide whether to accept or reject such material and to decide what if any weight shall be placed upon it.

11 The constitutional objections to s 28A are not made out and the appeal should be dismissed with costs.

The decision of the Liquor and Gambling Commissioner

12 The decision of Commissioner Pryor was preceded by a hearing on 20 December 2006 at which K-Generation was represented by Mr Hoban and the Police Commissioner was represented by Sergeant Jakacic. Mr Krasnov gave evidence and was cross-examined. No transcript of that proceeding has been reproduced. Sergeant Jakacic tendered two ‘Police Commissioner Office files’, containing information which had been classified as criminal intelligence pursuant to s 28A of the Act. The files were ‘admitted into evidence at the hearing’. Their contents were not disclosed to K-Generation. Commissioner Pryor did not read the files during the hearing. Counsel representing K-Generation did not ask him to provide a summary of the criminal intelligence at any time.

13 Sergeant Jakacic also tendered material relating to a known associate of Mr Krasnov. This was received by consent. Statutory declarations testifying to Mr Krasnov's good character...