Davies v Smith (No 2)

By summons filed on 11 May 2018, Detective Sergeant Evan Davies (the plaintiff) sought a declaration pursuant to s 3 of the Restricted Premises Act 1943 (NSW) (the Act) in respect of premises of which Malcolm Smith (the defendant) is the registered proprietor and in which he presently lives with two of his grandsons and, from time to time, two of his sons. On 3 June 2019, the evidence in the matter was adduced and submissions made.

On 12 June 2019 I published reasons for my decision that there were grounds to exercise the discretion under s 3 of the Act by reason of the matters in s 3(1)(b), (c) and (d): Davies v Smith [2019] NSWSC 700. Those reasons ought be read with the reasons that follow.

In order to give context to the submissions on outstanding issues it is necessary to outline in greater detail the conduct of the proceedings to date.

Ms Rogers appeared on behalf of the plaintiff throughout. Mr Godkin appeared on behalf of the defendant on 29 July 2019 and 24 September 2019. On all other occasions, the defendant appeared on his own behalf.

At the substantive hearing of the summons on 3 June 2019, Ms Rogers submitted, in response to my question, that the effect of a declaration, if made, would be that the defendant would be able to return home to the “restricted premises” where he had lived for some decades but that if other reputed criminals “resorted” to the premises, he would be guilty of an offence under the Act. The following exchanges in the course of the plaintiff’s oral submissions are sufficient to indicate the plaintiff’s then position as to the effect of a declaration in the present case:

As I was unable to draft a declaration consistent with the provision of the Act which would have the effect for which the plaintiff had contended, I sought assistance from the parties on that issue. On 12 June 2019 I made orders directing the plaintiff to provide submissions as to the form of declaration he sought, having regard to submissions made by Ms Rogers, and listed the matter for further argument, including on the form of the declaration, on 29 July 2019.

On 22 July 2019 the plaintiff provided written submissions in accordance with my earlier directions. These submissions contained the following statements:

When the matter came before the court on 29 July 2019, Mr Godkin sought an adjournment of the matter on the basis that it was only when the defendant received the plaintiff’s further submissions on 24 July 2019 that the defendant appreciated that, if a declaration were made, he could lose access to his home. I granted the adjournment and directed the defendant to serve any submissions in response by 19 August 2019 and the plaintiff to serve any reply submissions by 2 September 2019. I stood the matter over for further hearing to 5 September 2019. On that day, the matter was listed before me at Parramatta, where I was conducting a criminal trial. The defendant did not appear by reason of his misapprehension as to the location. He did however attend the Court in Queens Square on that day. The plaintiff accepted that the matter ought be stood over to 24 September 2019 to give the defendant an opportunity to be heard.

I set out the relevant legislative provisions in my earlier decision. However, for completeness, they are reproduced below.

The long title of the Act is as follows:

Section 3 provides:

Section 2 defines “reputed criminal” as follows:

A “senior police officer” is defined in s 2 as meaning “a police officer of or above the rank of sergeant”.

The effect of a declaration under s 3(2) or s 3(3) is that a search warrant is not required before police officers can enter premises. Further, after a notice under s 6 of the making of a declaration is served on the owner or occupier of the premises, the owner is guilty of an offence if any of the conditions referred to in s 3(1) apply to the premises while the declaration is in force: s 8(1). Because of its importance to the consequences of a declaration under s 3 of the Act, s 8 is set out in full. It provides:

The term “indictable offence” is defined by s 3 of the Criminal Procedure Act 1986 (NSW) as “an offence (including a common law offence) that may be prosecuted on indictment”. A “summary offence” is an offence that is not an indictable offence: s 3 of the Criminal Procedure Act. Sections 5 and 6 of the Criminal Procedure Act have the combined effect that an indictable offence is one for which the maximum penalty is imprisonment for more than two years.

A declaration may be rescinded under s 4 of the Act on the application of the owner or occupier of the premises if the Court is satisfied that the conditions referred to in s 3(1) have ceased for a period of 12 months before the application is made and are unlikely to reoccur at the Premises. A senior police officer may apply for a declaration to be rescinded on proof that there is no reasonable ground for suspecting that any of the conditions referred to in s 3(1) obtain in relation to the premises.

The plaintiff’s unwillingness or inability to draft a declaration that would not deprive the defendant of the right to live in his own home is a powerful indication that it is not possible to do so. Accordingly, it would appear that the plaintiff’s submissions to me on 3 June 2019 were incorrect.

Ms Rogers submitted, in effect, that I am obliged to make the declaration under s 3 of the Act. She further contended that disruption to the defendant’s continued residence in the premises is not a relevant consideration in the exercise of the discretion whether to make a declaration. I understood the plaintiff to submit that to take into account the disruption to the defendant’s continued residence at the premises would cause the discretion to miscarry: see Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24 at 40 (Mason J); [1986] HCA 40.

Mr Godkin submitted that, although the jurisdiction to make the declaration had been established, I have a discretion not to make the declaration which I should exercise in the present case. Mr Godkin contended that it was of significance that the premises in respect of which the declaration is sought is the defendant’s family home where his grandsons and, from time to time, two of his sons, reside. He argued that, in effect, the defendant was providing a safe place for his relatives to live which was a form of rehabilitation and that to deprive them of this by making a declaration would amount to a form of extra-curial punishment.

Further, Mr Godkin submitted that the Act was not intended to apply to residential premises. In support of this submission, Mr Godkin relied on the following extracts from the Second Reading Speech for the Disorderly Houses (Commercial Supply of Prohibited Drugs) Bill 2002 (NSW) (New South Wales Legislative Council, Parliamentary Debates (Hansard), 20 November 2002 at 7101):

Mr Godkin submitted that the amendments made by the Disorderly Houses (Commercial Supply of Prohibited Drugs) Bill were intended to “solve the issue of illegal drugs being sold by legitimate businesses” and were not intended to affect the right of a home owner to live in his or her dwelling.

In response, Ms Rogers submitted that the passages in the Second Reading Speech which were relied upon by the defendant were irrelevant since they related to the insertion of Part 2A into the Act, which made provision for closure of certain premises from which there were reasonable grounds for suspecting that prohibited drugs were supplied. She contended that the only part of the Act relevant to the present proceedings was Part 2 of the Act, entitled, “Disorderly Houses”.

I am entitled to take into account extrinsic material in construing legislation whether or not there is an ambiguity: s 34 of the Interpretation Act 1987 (NSW). Extrinsic material, such as the Second Reading Speech, can be used to determine the meaning of a provision “if the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act . . . and the purpose or object underlying the Act . . .) leads to a result that is manifestly absurd or is unreasonable”: s 34(1)(b)(ii) of the Interpretation Act. I accept Ms Rogers’ submission that the Second Reading Speech does not address the effect or import of the provisions which are presently relevant. The operation of Part 2 of the Act is not confined to business premises. Nor is there any support in the wording of the legislation for any distinction between “business” premises on the one hand and “residential” premises on the other since plainly premises may be used not only for business purposes but also as a residence. Thus, no assistance can be gained from the Second Reading Speech for the Disorderly Houses (Commercial Supply of Prohibited Drugs) Bill.

The word “may” in s 3 of the Act imports a discretion: s 9(1) of the Interpretation Act; The Commissioner of Police v Tanos (1958) 98 CLR 383 at 390 (Dixon CJ and Webb J); [1958] HCA 6. However, in Sibuse Pty Ltd v Shaw (1988) 13 NSWLR 98, the majority (Priestley and McHugh JJA) said that proof of the continuance of at least one of the conditions in s 3 would, in most cases, require a declaration to be made. Their Honours reasoned that this consequence flowed in part from the wording of s 4, which sets out the circumstances in which a declaration will be rescinded: at 114 (Priestley JA) and at 119-120 (McHugh JA). McHugh J said at 120 that if a condition in s 3 has ceased to exist at the time of the hearing of the application, there would be a discretion not to make the declaration on that basis. His Honour continued at 121:

McHugh J expressed his conclusion about the ambit of the proper exercise of the discretion at 123:

Although Priestley JA was also in the majority, his Honour decided the case on a narrower ground. His Honour nonetheless agreed that it would not be an appropriate exercise of discretion to refuse to make a declaration where the owner or occupier was taking part in the illegal activity (in that case, brothel-keeping or profiting from the prostitution of another) at the time of the application.

In the present case, I am satisfied that the conditions in s 3(1)(b), (c) and (d) exist and that there is no reason to suppose that they will not continue in the future. Although the Act does not distinguish between these conditions, there is a logical distinction between, on the one hand, the condition in s 3(1)(b) and, on the other, the conditions in s 3(1)(c) and s 3(1)(d). The condition in s 3(1)(b) relates, relevantly, to unlawful sale or supply of a drug from the premises and is therefore something which can change over time. By contrast, the conditions in s 3(1)(c) and (d) cannot be changed, without a change of residence or management and control since the defendant, his two sons, Darren Smith and Damien Smith Snr, and his three grandsons, Damien Smith Jnr, Kobi Smith and Callum Smith are “reputed criminals” by reason of the historical fact of their respective convictions for at least one indictable offence.

If the condition in s 3(1)(b) had not been made out, a nice question would arise whether it would nonetheless be appropriate to make a declaration, which could not be rescinded unless the defendant divested himself of his rights to possession, management and control of the premises because he would remain a reputed criminal.

I have also considered whether the express words of the Act are sufficient to override the usual benefits of ownership of property: the right to its use and enjoyment; the right to exclude others; and the right to alienate it: Milirrpum v Nabalco Pty Ltd (Gove Land Rights Case) (1971) 17 FLR 141 at 272 (Blackburn CJ). In the present case, if a declaration is made, the defendant will lose the first two of these rights in respect of property of which he is the registered proprietor. He will neither be able to use or enjoy it since mere entry will constitute a criminal offence under s 8 of the Act. Nor will he be able to exclude the police from entering it, since one of the effects of a declaration under s 3 of the Act is that no search warrant is required to authorise entry to the premises. It is a fundamental principle of statutory interpretation that clear words are required to abrogate common law rights: Al-Kateb v Godwin (2004) 219 CLR 562; [2004] HCA 37 at [19] (Gleeson CJ) and the authorities referred to in Electrolux Home Products Pty Limited v Australian Workers’ Union (2004) 221 CLR 309; [2004] HCA 40 at [20]-[21] (Gleeson CJ). In my view the wording of the Act is sufficiently clear to indicate that it is intended to affect (and, in some cases, drastically curtail) the rights of owners and occupiers, who may be the same person.

At the conclusion of the hearing, Mr Godkin informed me that he had instructions to offer an undertaking on behalf of the defendant that the defendant would ensure that no criminal activity took place on the premises. I do not regard the undertaking offered as being sufficient to indicate that the condition in s 3(1)(b) (unlawful sale or supply of a drug from the premises) will not continue in the future, having regard to the evidence summarised in my earlier decision.

I am persuaded, on the basis of the plaintiff’s submissions, that I am not entitled to take into account that a declaration will have the effect that the defendant, his sons and his three grandsons will no longer be entitled to live in the restricted premises and that the defendant, and those members of his family who reside in the premises, will, accordingly, lose the right to use and enjoy the defendant’s home. That any rehabilitation that they may currently be undergoing (as to which no assumption can be made) may be derailed by a disruption to their residence does not, on the basis of Sibuse v Shaw, constitute a relevant factor in the discretion. There is nothing in the wording of the Act to indicate that the discretion would enable me to take into account the effect of a declaration on the defendant or members of his family or any public interest in neither dispossessing those with a settled home nor disrupting family units.

I have also had regard to the difficulty, if not impossibility, of the defendant ever being able to have the declaration rescinded under s 4 to permit him to reside in the premises again since his status as a reputed criminal is immutable.

The Act has been described as draconian: Sibuse v Shaw, at 109 (Street CJ). Its application in a case such as the present might be thought to meet that description. Nonetheless, I consider the statutory wording, as interpreted by the majority in Sibuse v Shaw, to require the result for which the plaintiff contended. As the plaintiff has established the basis for the exercise of the discretion and as there is no relevant countervailing factor which would weigh against its exercise in the present case, I am persuaded that the only proper exercise of my discretion is to make a declaration under s 3(1) of the Act, notwithstanding the dire effect of such a declaration on the defendant and his family.

The plaintiff also seeks a declaration under s 3(3) of the Act that the reason or the predominant reason for the declaration is that reputed criminals have attended or are likely to attend the premises or that a reputed criminal has, or takes part in, or assists in, the control of management of the premises. I do not regard these matters as constituting either the reason or the predominant reason for making the declaration since the plaintiff’s reasonable grounds for suspecting that drugs have been unlawfully sold on and from the premises and are likely to be sold again on or from the premises constitute a significant reason for making the declaration. Although the plaintiff happens to fall within the definition of “reputed criminal” by reason of his conviction for a minor instance of an indictable offence which was dealt with summarily, this factor is relatively insignificant compared with the drug activity on the premises as evident from the evidence summarised in my earlier reasons. Accordingly, I refuse to make an application under s 3(3) of the Act.

A declaration under the Act is not a declaration as to existing legal rights. The making of the declaration will fundamentally change the defendant’s legal rights and deprive him of access to real property of which he is the legal owner. As such, the conventional limitation on granting a stay of a declaration does not apply: cf. Young PW, Declaratory Orders (2nd ed, 1984, Butterworths) at [2408]. It will be necessary, in order to avoid criminal liability under s 8 of the Act, for the plaintiff at least to move away from the property. It need not be determined whether he is obliged to transfer his title to the property in order to relinquish control over the premises for the purposes of the Act. In any event, he ought be permitted some time to make other arrangements.

Mr Godkin sought a stay for a period of six months on the basis that the defendant had been living at the premises for many decades and had several animals and motor vehicles there as well as his personal effects. Ms Rogers informed me that the plaintiff consented to a stay for 60 days.

In the circumstances, I consider that the effect of the declaration ought be stayed for a period of 120 days to give him the opportunity to make arrangements for himself, his family and for the property.

The plaintiff seeks his costs of the proceedings. Although the plaintiff has largely been successful in obtaining the orders he sought in the summons, I am not persuaded that this is a case where the general rule that costs ought follow the event ought apply: Uniform Civil Procedure Rules 2005 (NSW), r 42.1. As set out above, in the initial hearing, the plaintiff submitted that the defendant’s continued residence at the premises would not be disturbed by a declaration under the Act. I am satisfied that that submission was wrong as a matter of law. By reason of the plaintiff’s conduct of the proceedings, it was necessary for the matter to be listed again, the premise of the plaintiff’s original application having been revealed to be false. In these circumstances I am not satisfied that it would be appropriate to order the defendant to pay the plaintiff’s costs of the proceedings.

The defendant appeared on his own behalf until the adjourned hearing on 29 July 2019. Mr Godkin appeared on that date and on 24 September 2019. In all the circumstances, the appropriate order is that there be no order as to the costs of the proceedings.

For the reasons given above, I make the following orders: