The Court of Appeal has found that a failure to disclose the “substance” or “gist” of confidential information relied upon when making an exclusion order under the Racing Act 1958 (Vic) will not necessarily constitute a breach of procedural fairness.

Chief Commissioner of Police v Nikolic [2016] VSCA 248

In Chief Commissioner of Police v Nikolic [2016] VSCA 248, the Court of Appeal of the Supreme Court of Victoria considered the circumstances in which procedural fairness will not require a decision-maker to disclose confidential information, or the “substance” or “gist” of that information. The Court determined that, in the instant case, procedural fairness did not require the “substance” or “gist” of confidential information to be disclosed to the subject of an exclusion order under the Racing Act 1958 (Vic) (the Act), given the public interest in protecting that information.

In October 2015, a delegate of the Chief Commissioner of Police notified jockey Danny Nikolic that he was considering making an order to prohibit Mr Nikolic from attending specified racecourses during race meetings, pursuant to s 33(1) of the Act. In his letter, the delegate expressed the view that it was “necessary in the public interest to make an exclusion order”, in light of:

  • Mr Nikolic’s “proven criminal history”;
  • his “disciplinary history”; and
  • “other credible, protected information which, for reasons of public interest”, the delegate was unable to disclose.

The letter invited Mr Nikolic to make any submissions that he considered relevant to the delegate’s decision. Mr Nikolic’s solicitors requested that the substance of the protected information be disclosed; the Chief Commissioner’s solicitors resisted on the basis that “it would not be in the public interest to disclose even the general nature of that material”.

The delegate signed the exclusion order in November 2015. In his Statement of Reasons, the delegate relied on both Mr Nikolic’s “criminal and disciplinary history”, and the undisclosed protected information, to conclude that Mr Nikolic’s attendance at race meetings “poses a risk to the integrity of the Victorian racing industry and the safety and wellbeing of racing industry officials and participants and the general public”.

Mr Nikolic successfully sought judicial review of the delegate’s decision before Ginnane J in the Supreme Court of Victoria. His Honour held that Mr Nikolic had been denied procedural fairness as he had not been “provided with details of adverse allegations against him that were relevant, credible and significant”. Accordingly, the exclusion order was “invalid and of no legal effect”.

The Chief Commissioner appealed to the Court of Appeal (Maxwell P, Osborn and Kaye JJA). It was common ground that the delegate was required to afford Mr Nikolic procedural fairness when making the order. The principal question for the Court was the content to be given to that obligation in circumstances where disclosure of the protected information could prejudice ongoing police investigations, police investigative methods or confidential police sources.

The Court of Appeal determined that procedural fairness did not require that the documents containing the protected information, nor even the “substance” or “gist” of those documents, be disclosed.

The Court considered that Kioa v West[1] and Applicant VEAL of 2002 v MIMIA[2] did not establish “any general proposition about how the conflicting requirements of confidentiality and procedural fairness are to be accommodated in a given case”. However, it found that subsequent decisions demonstrated that:

in certain contexts, the importance of protecting highly sensitive information may have the consequence that the principles of procedural fairness do not require the disclosure of even the substance or gist of that information to the person who is the subject of the decision in question. In such a case, the dictates of procedural fairness are qualified in order to accommodate the overriding public interest which requires the protection of the sensitive information.

Following VEAL and SZBEL v MIMIA,[3] the Court emphasised the importance of the statutory framework to determining the content of procedural fairness in a particular case.

The Court then turned to consider the Act’s text, context and purpose, placing particular emphasis on s 35E(2) of the Act. Under that section, courts hearing judicial review applications which involve protected information may take steps to prevent disclosure of that information, including by:

  • receiving evidence by way of confidential affidavits that are not disclosed to one or more parties; and
  • holding the hearing without notice to one or more parties.

The Court considered that these measures “authorise the abrogation of fundamental principles of justice”, and (echoing the language of Brennan J in Kioa) that they “would, if implemented, reduce the content of procedural fairness to ‘nothingness’”. The Court determined that this legislative authorisation of “such wholesale departures from the principles of justice necessarily informs the view which should be taken of what procedural fairness requires” in this statutory context. Overall, the Court found that:

the statutory context of the Racing Act reveals the legislature’s recognition – and its intention – that in order to ensure the integrity of horse racing, the exercise of the power under s 33 by the Commissioner may, in particular cases, necessitate a significant departure from the ordinary application of the rules of procedural fairness, in order to protect highly sensitive intelligence or investigative processes of Victoria Police.

The Court’s decision has clear ramifications for the content to be given to procedural fairness in similar statutory contexts — contexts where the legislature has justified departure from the ordinary rules of natural justice by reference to public interest concerns (often relating to national security or serious criminal activity).