Posted on September 11, 2019 by Katie Mortimer and Carlo Zoppo
How to Issue a Valid Notice for Information – Lessons from the Supreme Court
Regulatory authorities commonly issue statutory notices that require a person to furnish information or records. The Supreme Court recently considered such a notice, and provided useful guidance on the legal principles determinative of when a notice will be a valid exercise of power.
Regulators can glean lessons from the Court’s judgment on drafting techniques to adopt, to ensure their notices are validly issued.
Mr Mathieson, an authorised officer under the Water Management Act 2000 (WM Act), issued 2 notices on behalf of the Natural Resources Access Regulator (NRAR) (Notices) to Mr and Mrs Harris (Plaintiffs). The Plaintiffs operate farms close to Bourke, NSW and hold water approvals for water supply works and water use at those farms. The NRAR was investigating alleged breaches of the WM Act.
The Notices considered by the Court
The Notices were purportedly issued under s338A(2) of the WM Act, which provides:
338A Powers of authorised officers to require information and records
(2) An authorised officer may, by notice in writing given to a person, require the person to furnish to the officer such information or records (or both) as he or she may require for the purposes of this Act.
Notably, s338A of the WM Act is in similar terms to other legislative provisions that confer powers to require information or records, such as s9.22 of the Environmental Planning and Assessment Act 1979 (previously s119J), ss191 – 193 of the Protection of the Environment Operations Act 1997 and s37(1)(o) of the Food Act 2003.
Section 337 of the WM Act provides the purposes for which ‘other enforcement powers’ may be exercised, and applies to notices issued under s338A. It states at (1)(a) that powers may be exercised:
for determining whether there has been compliance with or a contravention of this Act or the regulations or any access licence, approval, notice or requirement issued or made under this Act …
The Notices stated that the express purpose for their issue, was to determine whether there had been compliance with or contravention of certain provisions of the WM Act.
Legal Principles Governing Validity of Notices
The Plaintiffs commenced proceedings alleging that certain paragraphs of the Notices did not amount to a valid exercise of the NRAR’s power pursuant to s338A(2) of the WM Act.
In order to determine the challenge raised by the Plaintiffs, the Court had regard to a number of Federal Court of Australia cases. Davies J summarised the legal principles relevant to notices to provide information and records as:
(a) The notice must convey with reasonable clarity to the recipient what information he/she is required to furnish or what documents are required to be produced: Pyneboard Pty Ltd v Trade Practices Commission and Bannerman (1982) 39 ALR 565 at 374;
(b) The documents sought must be capable of being properly regarded as related to the potential contravention: Pyneboard at 376;
(c) The notice must disclose the relationship between the information sought and the matter in respect of which the information is sought: Pyneboard at 375; SA Brewing Holdings Ltd v Baxt (1989) 89 ALR 105 at 370;
(d) These requirements (in (a), (b) and (c) above) are not to be applied in a precious, over-technical or hypercritical way: Pyneboard at 375 and 376;
(e) Provided the necessary relationship exists between the matter and the information and documents required, the notice is not open to objection on the ground that it is burdensome to furnish the information or to produce the documents: Melbourne Home of Ford Pty Ltd v Trade Practices Commission (No.3) (1980) 31 ALR 519 at 173;
(f) The power conferred is in aid of a function of investigation, not of proof of an allegation, and it is not possible to define … the limits of an investigation which might properly be made. In that way the power should not be narrowly confined: Melbourne Home of Ford at 173;
(g) The power may properly be exercised to ascertain facts which may merely indicate a further line of inquiry: Melbourne Home of Ford at 174;
(h) The invalidity of one question or requirement to produce will not lead to the invalidity of other independent questions unless the blue pencil deletion of what is invalid is not practicable or, if it is, would result in a substantially different question: Pyneboard at 376-7;
(i) Objection may be taken to production on the ground of relevance: A v Independent Commission Against Corruption (2014) 88 NSWLR 240 at  and -;
(j) The possibility, even the certainty, that the notice will cover documents which are not relevant to the investigation is not a basis for setting aside the notice: A v Independent Commission Against Corruption at .
(Extracted directly from paragraph  of the Court’s judgment)
Application to the NRAR’s Investigation & Notices
The Plaintiffs asserted that specified paragraphs of the Notices were beyond the NRAR’s powers as they did not comply with the relevant legal principles. They submitted that to be valid, the Notices needed to seek documents capable of being properly regarded as related to the potential contravention of the WM Act, and disclose the relationship between the information sought and the potential contravention (see ).
The Court’s Findings
There were 2 Notices – referred to as the Lakota Notice and the Janbeth Notice. The Court set both aside for the following reasons:
Lack of Clarity
The Lakota Notice was set aside entirely as the Court found there was a lack of clarity about the interrelationship of the contraventions alleged in the Notice. The Notice did not make clear whether the alleged contraventions were separate and distinct, or related. This was confusing and impacted upon the appropriateness of what was required of the Plaintiffs.
Questions beyond Power
The Janbeth Notice was not wholly void, but the Court found a number of its questions were beyond power. For this reason it was set aside in its entirety.
Examples of questions that the Court found were beyond power were:
- the economic activities undertaken … for which water was taken and used in connection with the combined approvals
- what was grown and produced, and in what quantities..
- the size and location of the areas of land at the Premises used for economic activity..
- the rate in terms of megalitres per hectare at which any water was applied to land at the Premises for economic activity..
- the amounts of water utilised for economic activities
The Court accepted that Mr Mathieson could enquire about facts which may indicate another line of enquiry, however it needed to be apparent on the face of the Notices, what the relationship is between the matters being investigated and the information sought. This was not clear.
Examples of information sought that the Court found was beyond power were:
- any documents including but not limited to emails, calendars, letters or invoices related to the property manager(s) for the farms relevant to combined approvals.
The Court found that Mr Mathieson did not make clear the relationship between these documents sought and the alleged contraventions.
Notices to require information and records are an important tool, and a useful starting point to gather information that will inform the course of an investigation. To ensure they are not susceptible to challenge, a notice should be carefully drafted. The drafter should ensure that the alleged contraventions are clearly stated, and the relationship between the alleged contraventions or matters being investigated and the material sought is clearly demonstrated.
Read the Court’s judgment here: Harris v Mathieson (in his capacity as an authorised officer under the Water Management Act 2000 (NSW)  NSWSC 1064
If you require advice on issuing notices, or to discuss this blog, please contact Carlo Zoppo on 8235 9705 or Katie Mortimer on 8235 9716.