Melco Resorts & Entertainment Limited v The Independent Liquor and Gaming Authority

Melco Resorts & Entertainment Limited (the plaintiff) seeks declarations that s 17(1) of the Royal Commissions Act 1923 (NSW) has not come into effect for the purposes of an inquiry conducted by the Independent Liquor and Gaming Authority, the first defendant (the Authority), into certain of the activities of Crown Resorts Limited and CPH Crown Holdings Limited (the Inquiry) and that its privileges, including legal professional privilege, are not abrogated for the purposes of the Inquiry.

Whether the plaintiff’s privileges have been abrogated turns on the construction of the Casino Control Act 1992 (NSW), as amended to include s 143A, and the Royal Commissions Act, some provisions of which have been incorporated by reference into the Casino Control Act.

The Commissioner who was appointed to conduct the Inquiry, the Honourable Patricia Bergin SC, has been joined as the second defendant. Both the Authority and the Commissioner have filed submitting appearances. The Attorney General for New South Wales has been joined as the third defendant and is the only active defendant in the proceedings.

On 14 August 2019 the Authority appointed the Commissioner to conduct the Inquiry. The instrument of appointment relevantly states:

Between September 2019 and January 2020, nine summonses to produce documents were issued to the plaintiff. The plaintiff claimed legal professional privilege over documents otherwise covered by the summons. The Authority did not accept the claims for privilege. It contended that the plaintiff’s privilege was abrogated and that the plaintiff was obliged to produce all documents falling within the summons. This led to the plaintiff commencing these proceedings for declaratory relief on 22 January 2020.

In order to address the parties’ submissions it is necessary to identify the relevant statutory provisions.

The Authority is defined in s 3 of the Casino Control Act to mean the Independent Liquor and Gaming Authority constituted under the Gaming and Liquor Administration Act 2007 (NSW). Section 6 of the Gaming and Liquor Administration Act constitutes the Authority. By s 6(3), the Authority is subject to the control and direction of the responsible Minister in the exercise of its functions.

Section 143(1) of the Casino Control Act provides:

The Casino Control Act was amended in 2001 by the Casino Control Amendment Act 2001 (the 2001 Amendment Act), which relevantly inserted s 143A. The 2001 Amendment Act was intended to implement recommendations made by Peter McClellan QC who had been appointed by the Authority under s 143 of the Casino Control Act to conduct an inquiry into whether Star City, the casino operator, was a suitable person to continue to give effect to the casino licence and the Casino Control Act. His recommendations were included in a report dated 15 December 2000 (the McClellan Report). Of present relevance, Mr McClellan made the following recommendation with respect to s 143 inquiries:

Mr McClellan also recommended that the commissioner be empowered to make a direction that certain matters not be published. This was the only other recommendation that touched on the powers of the Authority to conduct inquiries. Importantly, Mr McClellan made no recommendation that the rights of witnesses summoned before the Authority or persons required to produce documents to the Authority be abrogated. This topic was not addressed at all in his report.

In the Second Reading Speech for the Bill that became the 2001 Amendment Act, the Honourable Mr Face, Minister for Gaming and Racing said, New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 7 March 2001, at 12323-12324:

The Explanatory note to the Bill that became the 2001 Amendment Act said, in respect of s 143A:

Section 143A of the Casino Control Act provides:

It was accepted that the Commissioner, relevantly, is an Australian lawyer of at least 7 years’ standing within the meaning of s 143A(1)(b) of the Casino Control Act.

Part 2 of the Royal Commissions Act contains two Divisions. Division 1, entitled “Commissions generally”, contains s 5, which provides:

It can be seen from a comparison between s 5 of the Royal Commissions Act and s 143 of the Casino Control Act that there is a significant difference between a Royal Commission on the one hand and the Authority on the other. A Royal Commission, as its name implies, is one constituted by letters patent issued by the Governor under s 5 of the Royal Commissions Act on the advice of Executive Council: s 14 of the Interpretation Act 1987 (NSW). By contrast the Authority is a creature of Parliament. Neither the Gaming and Liquor Administration Act nor the Casino Control Act contemplates any involvement by the Governor. It is the Authority which has the power, under s 143 of the Casino Control Act, to hold an inquiry. This difference is germane to at least some of the questions of interpretation which arise in the present case and which are addressed below.

Division 1 also contains s 8, which provides:

As s 8 confers a power on the commissioner, it is picked up and applied, by s 143A(1)(a) of the Casino Control Act, with the effect that the Commissioner has such a power when conducting the Inquiry. As referred to above, Mr McClellan recommended the conferral of such a power.

Section 11, which is also contained within Division 1, relevantly provides:

Division 2 of Part 2 of the Royal Commissions Act, entitled “Special powers”, applies only to particular inquiries. Section 15 provides:

Section 17 provides:

The question to be decided turns on whether s 17 of the Royal Commissions Act is picked up by s 143A of the Casino Control Act and, if so, to what extent and effect. It is common ground that no further question arises from the terms of reference or the instrument of appointment since these documents replicate the terms of s 143A(1)(b).

Before construing s 143A, it is helpful to summarise the respective contentions of the parties.

The plaintiff, for whom Mr Finch SC appeared with Mr Stoljar SC and Ms Hillman, accepted for the purposes of these proceedings that s 17(1) of the Royal Commissions Act had the effect of abrogating legal professional privilege. He contended that s 17(1) of the Royal Commissions Act would not take effect in a Royal Commission unless and until the following occurs:

Mr Finch submitted that there was nothing in s 17 which made it applicable to the Inquiry and that s 143A of the Casino Control Act did not, in terms, have the effect of making it applicable. First, he submitted that s 143A was apt to confer powers and authorities and that s 17(1) was neither a power nor an authority. Rather, it was an abrogation of fundamental common law rights which would otherwise accrue to witnesses in an inquiry and persons required to produce documents to an inquiry.

Second, and in the alternative, Mr Finch submitted that even if s 17(1) ought be construed as conferring a power (to require a witness to answer a question in respect of which privilege had been abrogated), it was nonetheless inapplicable since neither s 17(4) nor s 17(5) conferred a power. He contended that the words in s 143A of the Casino Control Act were entirely inapt to make s 17 applicable since the preconditions in s 17(4) and (5), which operated as safeguards, have not been, and could never be, met. He argued that s 143A still had work to do because there were several provisions in Part 2 of Division 2 which did confer powers or authorities on a commissioner and which s 143A would have the effect of conferring on a commissioner of an inquiry under the Casino Control Act. He instanced provisions such as s 16 (warrants), s 18 (general powers of commissioner to compel the attendance of a witness, to compel a witness to answer questions and to compel the production of documents) and ss 18B, 18C and 18D (the power to punish for contempt).

Mr Finch contended that the principle of legality required the legislature to express itself clearly if it wanted to abrogate fundamental rights and that the language of s 143A was insufficiently clear to have that effect.

The Attorney General, for whom Mr Free SC appeared with Mr Jones, contended that s 143A was clear and that Parliament plainly intended that the privileges otherwise available to witnesses before an inquiry were intended to be abrogated in inquiries where the commissioner fell into the categories set out in s 143A(1)(b) of the Casino Control Act. Mr Free submitted that s 17 of the Royal Commissions Act satisfied the test of “irresistible clearness” (from Potter v Minahan (1908) 7 CLR 277 at 304 (O’Connor J); [1908] HCA 63) for the purposes of the doctrine of legality and that the doctrine did not extend to requiring such clarity when construing the effect of s 143A of the Casino Control Act.

However, he submitted, in the alternative, that s 143A was sufficiently clear to have the effect of making s 17 (apart from s 17(4) and (5)) applicable to the Inquiry. Mr Free relied on what Basten JA said in Elliott v Minister administering Fisheries Management Act 1994 (2018) 97 NSWLR 1082; [2018] NSWCA 123 that, even where the principle of legality (also referred to by his Honour as the clear statement principle) applies, effect must be given to the words of the statute, read in context with regard to the legislative purpose: [35].

Mr Free contended that the words “powers and authorities” in s 143A were apt to refer to the whole of Division 2 of Part 2 of the Royal Commissions Act apart from s 15 and were not intended to qualify the words in parentheses “except for section 17(4) and (5)” which he accepted conferred neither powers nor authorities. He submitted that although s 17(1) was not expressed in terms of a power, there was a correlative power which arose by reason of the abrogation by s 17(1) of the rights and privileges which would otherwise apply: namely, the commissioner’s powers under s 18(1) to compel a witness to answer questions or to compel the person to produce documents notwithstanding a claim of privilege.

Mr Free contended that the evident intention of Parliament, as expressed in s 143A(1)(b), was to remove the restrictions in s 17(4) and (5) (which would apply to inquiries created by letters patent) from any inquiries arranged to be held by the Authority under the Casino Control Act in circumstances where the commissioner was either a judge of the Supreme Court or an Australian lawyer of at least 7 years’ standing whose instrument of appointment expressly so provides.

He submitted that the words in parentheses in s 143A(1)(b) indicated that Parliament had specifically turned its mind to s 17 of the Royal Commissions Act and ought be taken to have intended to incorporate the whole of the section apart from s 17(4) and (5). He submitted that the excision of s 17(4) and (5) only made sense if the balance of s 17 was otherwise picked up and was being treated as a source of power and authority. Mr Free argued that if the intention of Parliament had been to pick up powers and authorities in Division 2 of Part 2 but not s 17, it would have said so.

Further, Mr Free submitted that, even if s 17 was not picked up by s 143A(1)(b), it was picked up by s 143A(2) which applied to any witness summoned by or before a commissioner.

Mr Free relied on the circumstance that the extrinsic materials did not deal with abrogation of privilege and did not need to do so because all s 143A did was to apply Division 2 of Part 2 of the Royal Commissions Act to inquiries under the Casino Control Act in certain specified circumstances.

Mr Free referred to s 81 of the Crimes (Appeal and Review) Act 2001 (NSW) as being an example of the use by a legislative draftsperson of a similar device as appears in s 143A to make applicable the provisions of the Royal Commissions Act to other inquiries. He accepted that the purpose of his reference to this provision was illustrative only and did not contend that I could derive any particular guidance from it.

As referred to above, the plaintiff placed substantial emphasis on the safeguards that prevented the abrogation of rights in Royal Commissions until certain conditions had been met and the absence of such safeguards for an inquiry if the Attorney General’s preferred interpretation was accepted. While the comparison is of interest, it must be accepted that Parliament can remove common law rights when it chooses to do so as a matter of Parliamentary sovereignty. It would be open to Parliament to confer a power on the Authority to determine whether common law privileges ought apply or be abrogated. There would, in such circumstances, be none of the checks and balances that apply to a Royal Commission. The question is not, however, whether Parliament can do what the Attorney General contended it has done, but rather whether its words are sufficient to effect that consequence since the words used by Parliament are regarded as the best guide to its intention.

Accordingly, the first question is: does s 17 confer a power or authority on a commissioner within the meaning of s 143A(1)(b)? It was accepted that s 17, of itself, expressly confers neither a power nor an authority on a commissioner. Its effect is to abrogate, by s 17(1), certain rights and privileges and to provide, by s 17(2) and (3), for limited use of material and answers obtained by reason of such abrogation. When s 17 is read with s 18, it can be seen that a Royal Commissioner has powers to compel a witness both to attend and answer questions and also to compel a person to produce documents, notwithstanding any claim for privilege, such privileges having been abrogated by s 17(1). But s 143A does not in terms make the whole or any part of Division 2 of Part 2 applicable to inquiries under the Casino Control Act. What it does is confer certain “powers and authorities” on the commissioner. In other words, only those provisions in Division 2 of Part 2 which confer powers and authorities are imported into inquiries under the Casino Control Act.

I understood Mr Free to accept that for s 17 to be picked up by s 143A, it was necessary to construe s 17(1) as not only an abrogation of rights, but also as a conferral of a correlative power and authority in the commissioner to enforce such abrogation by requiring a witness to answer a question or a person to produce documents otherwise covered by a summons. The argument that s 17(1) is, in substance, a power since it contains within it an implicit correlative right or power in a commissioner to exercise compulsory powers unfettered by claims of privilege has considerable attraction. Lawyers are accustomed to the process of matching rights with remedies, obligations with powers and abrogation of rights and corresponding entitlement: see, for example, Maxwell v Murphy (1957) 96 CLR 261 at 268-269 (Dixon CJ). If this broad construction is given to “powers and authorities” in s 143A(1)(b), the abrogation of rights in s 17(1) applies in inquiries under the Casino Control Act.

Parliament can be taken to have used the words “powers and authorities” advisedly. The only provisions in Division 2 of Part 2 of the Royal Commissions Act which would appear to be necessarily unsuitable for, or irrelevant to, inquiries under the Casino Control Act are s 15 (application of the division), since s 143A has its own provision which provides for its application, and s 17(4) and (5), since the Governor plays no role in such an inquiry. Parliament could readily have imported the whole of Division 2 of Part 2 into the Casino Control Act, with the exception of ss 15, 17(4) and 17(5). While the drafting of a statute is at least a skill, if not an art, and it may be assumed that there are several ways of achieving the same result, the use of the words “powers and authorities” is no mere drafting device. It indicates a substantive limitation on what is imported from Division 2 of Part 2: that is, only powers and authorities are to be picked up and not those provisions which do not confer powers or authorities.

The extrinsic material may be taken into account as an aid to construction: s 34 of the Interpretation Act. The extrinsic material which may be taken into account in the present case comprises the McClellan Report (s 34(2)(b)), the Explanatory note (s 34(2)(e)) and the Second Reading Speech (s 34(2)(f)). The Second Reading Speech and the Explanatory note were presumably intended to give Parliament an assurance that the effect of s 143A was not such as to abrogate significant rights, or at least those rights which would be available to witnesses giving evidence in this Court. However, the construction for which the Attorney General contended would have the opposite effect. Far from a witness before the Commissioner having the “same protections” as in this Court, such a person would be deprived of any basis for not answering a question, save, potentially, relevance. I do not accept the Attorney General’s contention that the word “protections” in the Explanatory note and the Second Reading Speech is to be read as confined to protection from liability and is not intended to refer to privileges or other rights.

Although an Explanatory note may be used for the purposes of statutory interpretation, its initial, and primary, purpose is to explain a Bill, clause by clause, to members of Parliament. An Explanatory note complements the Second Reading Speech in which the responsible Minister explains the purpose of the legislation and the reasons for its enactment. It can hardly be thought that the Government would mislead members of Parliament by giving them an assurance in terms of the last sentence of the extract that witnesses would have the same protections as witnesses in this Court when it intended to abrogate such rights (including the right to refuse to answer a question on the grounds of privilege). The effect of the extrinsic material is a powerful indication that Parliament did not intend s 143A to have the effect of importing the widespread abrogation of rights in s 17(1) to inquiries conducted under the Casino Control Act.

It is significant that Parliament has chosen to import only “powers and authorities”, not all of the provisions in Division 2 of Part 2. It has also sought to “explain” through the Explanatory note that the effect of s 143A is to preserve rights, not to abrogate them. I regard the extracts from the Explanatory note and the Second Reading Speech as confirming the construction for which the plaintiff contended: namely, that it is only the express powers and authorities in Division 2 of Part 2 that are to be conferred on a commissioner by s 143A(1)(b) and not the balance of Division 2 of Part 2, which does not fall within that description.

I do not regard this construction as necessarily inconsistent with the exclusion of s 17(4) and (5) in s 143A(1)(b). Sections 17(4) and (5) plainly have no application to an inquiry under the Casino Control Act since the Governor has no role in the creation of any such inquiry. In these circumstances, it is understandable that Parliament would expressly except them.

I reject the Attorney General’s argument that if s 17(1) is not picked up by s 143A(1)(b), it is picked up by s 143A(2) because it applies to witnesses. Division 2 of Part 2 is excepted “subject to subsection (1)(b)”. Section 143A(1)(b) is qualified by the expression “powers and authorities”. Thus, s 143A(2) needs to be construed with that qualification.

Although the extrinsic material is inconsistent with the interpretation for which the Attorney General contended, his interpretation is nonetheless open and arguable. However, there is a further reason, in addition to the plain meaning of the words and the extrinsic material, for preferring the interpretation for which the plaintiff contended: the principle of legality. The so-called “principle of legality” (otherwise, in this context, known as the clear statement principle) was described by McHugh J in the following terms in The Daniels Corporation International Pty Limited v Australian Competition and Consumer Commission (2002) 213 CLR 543; [2002] HCA 49 at [39]:

If the words “powers and authorities” in s 143A are read broadly so as to include implied correlative powers and authorities, this will have the effect that all the common law rights and privileges covered by s 17(1) are abrogated for an inquiry under the Casino Control Act conducted by a person who qualifies under s 143A(1)(b).

The High Court (Mason CJ, Deane, Dawson, Toohey and Gaudron JJ) said in Balog v Independent Commission Against Corruption (1990) 169 CLR 625 at 635-636; [1990] HCA 28:

The rationale for the requirement that Parliament make its intention clear when removing a fundamental right was explained in an oft-quoted statement in R v Secretary of State for the Home Department; Ex parte Simm [2000] 2 AC 115 where Lord Hoffman said at 131:

I do not accept Mr Free’s contention that it is sufficient for the abrogation of rights and privileges effected by s 17 of the Royal Commissions Act to be clear. The Attorney General’s submission is that s 143A picks up s 17(1), the abrogation, and s 17(2) and (3), the limitations of use, and applies these provisions to inquiries where the commissioner falls into one or other of the categories set out in s 143A(1)(b). Thus, he contended that parties producing documents to such inquiries and witnesses compelled to answer questions before such inquiries will be deprived of important common law rights. In my view, the principle of legality applies not only to the construction of s 17(1) (which is tolerably clear) but also to any provision which is said to incorporate it by reference or make it applicable in circumstances other than under the Royal Commissions Act. Thus, for s 143A to have the effect of making s 17(1) applicable, it too needs to be expressed with clarity. This is not to suggest that Parliament may not incorporate a provision such as s 17(1) by reference into another statute; rather that if it intends to do so, it must use clear language.

The effect of the principle of legality in the present case is that the court ought not be left to guess whether the alleged correlative power and authority embedded in the abrogation of privileges and rights in s 17 is intended to be conferred on a commissioner appointed under the Casino Control Act. If Parliament intended that for which the Attorney General contended, it was obliged to make its intention clear. The wording of s 143A, the Second Reading Speech and the Explanatory note was such as to give rise to a substantial risk that the full implications of the Attorney General’s preferred interpretation would go unnoticed in the course of the Bill’s passage through both Houses of Parliament. It is not for this Court, by a process of construction which relies on implied correlative powers and authorities, to enable Parliament to avoid confronting the inevitably controversial question whether, in inquiries held by the Authority under the Casino Control Act, it is desirable to abrogate fundamental privileges and rights of witnesses and persons required to produce documents.

There does not appear to be any reason why costs ought not follow the event in accordance with the general rule: Uniform Civil Procedure Rules 2005 (NSW), r 42.1. However, as I have not heard the parties on costs, I will make provision in the orders for any application for a different order to be made.

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