Adler v Ludlam; Adler v Waters

[2018] HCATrans 133

[2018] HCATrans 133

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney   No S226 of 2017

B e t w e e n -

DAVID ADLER

Plaintiff

and

SCOTT LUDLAM

Defendant

Office of the Registry
  Sydney   No S227 of 2017

B e t w e e n -

DAVID ADLER

Plaintiff

and

LARISSA JOY WATERS

Defendant

GORDON J

TRANSCRIPT OF PROCEEDINGS

FROM MELBOURNE BY VIDEO LINK TO SYDNEY AND BRISBANE

ON WEDNESDAY, 11 JULY 2018, AT 9.43 AM

Copyright in the High Court of Australia

____________________

MR P.E. KING:   If your Honour pleases, I appear for Dr Adler, the plaintiff.  (instructed by Roderick Storie Solicitors)

MR A.N.P. McBETH:   Your Honour, I appear for the defendants in both matters.  (instructed by Fitzgerald & Browne)

HER HONOUR:   Yes, Mr King.

MR KING:   Your Honour, if your Honour has my friend’s written submissions, which we received yesterday, and in the light of the order that your Honour has just made in the Barrow matter, it appears to us that there are two questions of law only that arise in this matter.

HER HONOUR:   Yes.

MR KING:   The first is at paragraph 15 of my friend’s written submission and that is that under section 3(3) of the Common Informers Act there is no further entitlement and nothing – any effective statutory bar on my client proceeding.  We say that is a misreading of the statute.  That is the first point. 

The second question of law appears to arise at paragraph 20 of my friend’s submission.  He makes the point that Re Canavan may not be a sufficient basis for my client succeeding.  We also dispute that.  In the matter of Alley the Court simply stayed the proceeding pending the determination of the Court of Disputed Returns of the disqualification.  In this case that has occurred. 

We say that Alley is not distinguishable and supports the present application but my friend’s question of law at 20 would seem to be an impediment.  But subject to that we say the admitted facts, and facts found in Re Canavan, Re Ludlam and Re Waters entitle the plaintiffs to judgment.

HER HONOUR:   I see.  Could I raise a number of issues with you, Mr King, which are of concern to me and which would seem to me to be anterior to any of those questions?

MR KING:   Yes, your Honour.

HER HONOUR:   The first is this.  On one reading of section 3 of the Common Informers Act it imposes a penalty on a person who relevantly sits as a senator while they are declared to be incapable of so sitting.  That penalty is itself significant, but second, it covers two very distinct time periods and those time periods are divided by the day on which the originating process in the suit under the Act is served.  One of them is that set out in subsection (a).  The second is set out in subsection (b) of section 3(1) of the Act.

The second matter is that under section 3(2) of the Act a suit is not entitled or able to be filed any earlier than 12 months – sorry, I withdraw that.  The suit cannot relate to any period earlier than 12 months upon the date on which the suit is instituted.

The third and related issue that I see is that the High Court Rules require any statement of claim that is filed in these matters to identify the specific provisions of any Act relied on – that is rule 27.04(c); contain the necessary particulars of any fact or matter pleaded, including all particulars necessary to enable a defendant to plead to that matter – that is set out in rule 27.04(d). 

On one view your statement of claim fails in both, or is deficient in both of those respects, that is it does not identify the provisions and while it refers to a number of dates on which it contends the defendant sat, it provides no other particulars.  So if one was to step back from it, it is at least arguable that one could not plead to it.

The next issue that is of concern to me is this.  That lack of specificity, both by reference to the Act and the Rules, is reinforced in a sense by the orders that you now seek.  As I understand it, they are final orders.  They are final orders in the nature of a penalty.

My problem, in addition to those I have just identified, is that given that it is a penalty it is at least arguable that because of the nature of a penalty giving rise to the reason – that is, the Court imposing a penalty, that if one has regard to some of the authorities that the Court has looked at in other jurisdictions about the Court imposing a penalty, especially one which is agreed, not only does there have to be evidence establishing that the person is liable, and here that liability is not simply the fact that they were declared to be incapable of being chosen or sitting, but identifying with precision the days upon which it is said that they were sitting and, therefore, liable to a penalty of a particular amount in each day, and those factors are reinforced in relation to at least some of these people because both Senator Ludlam and I think Senator Waters, took a very distinctly different step from a number of the other politicians.  They did not sit as a senator after your writ of summons was filed and, as I understand it, let alone served.

So that would, on one view, arguably put aside the liability under section 3(1)(b) but if one comes back to section 3(1)(a), again we have the difficulties I identified earlier of lack of specificity consistent with the Rules and the Act, and as I said, I have no evidence.

MR KING:   Yes, your Honour.

HER HONOUR:   Then I have another issue and the other issue is this.  As I said it may very well be, and I have no concluded view about this matter, but I would be interested in hearing submissions from Mr McBeth and probably yourself as well if it is possible, that considerations giving rise to the imposition of a penalty, especially one where there is going to be an agreement if there is one, the Court has to itself assess each of those questions.

Now, that may be a bit easier in this case by way of contrast to impositions of penalties under the Australian Consumer Law Act or the workplace relations‑type legislation, but here I have nothing upon which this Court could make any of those orders which you seek at present, as I understand it. You may seek to persuade me otherwise.

Finally, I have the problem which Mr McBeth raised which gives rise then I think to – if we get there – the two legal issues which you have identified, being the impact of section 3(3) of the Common Informers Act having regard to the nature of the relief which was granted in the other matters to which you have made reference.

Now, there are a number of issues there, Mr King, and they are all significant.  Would you like some time to think about them?

MR KING:   Yes, your Honour, although I can, if it may assist the Court, give a preliminary response and that is that the orders we seek today are in response to our summons for directions.  The reason I mentioned paragraphs 15 and ‑ ‑ ‑

HER HONOUR:   Sorry, Mr King, I understood you sought judgment this morning.  That is why I raised these matters with you. 

MR KING:   No.

HER HONOUR:   What you put to me before – when you stood up – was you were entitled to judgment.

MR KING:   No.  In the light of what your Honour has said, what has fallen from your Honour, we would not oppose the orders that my friend has proposed at paragraph 22 of his outline, which we received yesterday.  We accept that there is no reference ‑ ‑ ‑

HER HONOUR:   Why should I permit that to proceed given that this matter has now been in this Court for a considerable period of time and not prosecuted?

MR KING:   Well, your Honour, we filed this summons for directions on 5 October last year in accordance with the Rules and it was only listed last week by the Registrar by letter.

HER HONOUR:   Yes.  So the Registrar prompted it.  Why should I permit this matter to proceed further?

MR KING:   We have contacted the Registry informally, your Honour, on a couple of occasions and the response was that you should wait.  It will be listed in due course.  That is in response to our summons for directions.

HER HONOUR:   Given the deficiencies in your case, why should I permit it?

MR KING:   Your Honour, your Honour has raised, as I understand it, two principal issues of deficiency.  The first is that it does not specify the precise provision in the Common Informers (Parliamentary Disqualifications) Act under which we proceed.  But your Honour has correctly identified, in what has fallen from your Honour, that we are seeking an order, in effect, under section 3(1)(a).  That is apparent because the days that we particularised, the 42 days we particularise at paragraph 2 all fall within 12 months of the commencement of the proceedings in accordance with the limitation in section 3(2).

The only question, in the light of what has just happened in Barrow’s Case, is whether or not we are precluded from proceeding by operation of subsection (3) but, in our respectful submission, that is a misconceived position put by the defendant because what subsection (3) provides is that the defendant shall not be penalised more than once and then the critical words are “in respect of any period or day of sitting as a senator or as member of the House of Representatives”.

The $200 that has been paid in Barrow can only be in respect of one day, having regard to the figure mentioned in subsection (1) and the balance 42 days have not yet been the subject of any hearing or proceeding.  So, in the light of the decision in Alley which has occurred after we filed our

summons, our writ of summons, we would respectfully submit it is appropriate to file an amended statement of claim specifying the decision of the Court declaring each of the defendants to be a person declared by the Constitution to be incapable of so sitting, consistently with what happened in Alley’s Case, and then to permit the defendant to file a defence as they proposed in their short minutes of orders in respect of the two questions of law which remain.

We anticipate there are no issues of fact in these cases, subject to seeing the consent orders in the Barrow Case which obviously we have not seen yet.

HER HONOUR:   Thank you.  Mr McBeth.

MR McBETH:   Your Honour, the defendants’ position in these matters is that the matter ought to be stayed, either on the basis that section 3(3) of the Common Informers Act would result necessarily in a second penalty, which is to say that the defendants would be penalised more than once in respect of a period in which they sat as senators whilst disqualified.

So the only possible outcome of permitting this matter to proceed would be either that it is dismissed or that a penalty is pronounced which would have the effect in section 3(3) which is to say the defendants will be penalised twice given that they have already now had a penalty ordered in the matter of Barrow.

That is one basis on which the matter should be stayed.  The alternative basis is that the statement of claim simply does not make out a cause of action and so it should be either stayed or dismissed pursuant to rule 27.04.

The defendants note the same deficiencies that your Honour pointed out in the statement of claim and furthermore, it does not identify the basis on which it is claimed the matter is within the original jurisdiction of the High Court.  It does not identify the specific statutory provisions relied on.  It does not identify sufficient material facts to give rise to liability under the Common Informers Act. 

It would, at a minimum, be necessary to identify when and how the defendants were declared by the Constitution to be capable of sitting in light of the decision in Alley v Gillespie.  It would be necessary to identify the basis of liability for sitting or declared incapable of sitting on or before the date the writ was served under paragraph (a) and it would be necessary to identify the days on which the defendants are said to have sat after the date the writ was served which, of course, in this case is impossible because there were none.  But in any case that needed to be pleaded with a degree of specificity in the statement of claim which is simply not there.

HER HONOUR:   Are they the matters that I have just raised with Mr King?

MR McBETH:   Broadly.  I think I have gone into more detail, but yes, they are, your Honour.  So we respectfully adopt those concerns.  Furthermore, there is plainly no reasonable prospect of success as far as section 3(1)(b) is concerned.  The submissions from the plaintiff, which my learned friend has effectively reanimated this morning, assume that subsection (b) relates to a period before the matter was served, before the originating process was served.  That is, in my submission, completely untenable on the face of the statute.

Subsection (1)(b) provides a penalty for $200 for every day subsequent to that day.  Well, the phrase “that day” can only mean the day on which the originating process was served as described in paragraph (a).  Now, because both defendants resigned in July of 2017, neither of them sat after this originating process was filed or served so there is plainly no prospect of success under paragraph (b).

So, insofar as the writ relies on liability under paragraph (b), it should be struck out and as far as paragraph (1)(a) is concerned, it would at a minimum need to be re‑pleaded but, in my submission, because of the operation of section 3(3), together with the plain defects in the statement of claim, the better course is for your Honour either to stay the matter permanently or to dismiss it under rule 27.04.

There is some doubt about whether there is liability at all under section 3(1)(a).  I am not sure that I need to go into that at this stage but I am happy to if your Honour ‑ ‑ ‑

HER HONOUR:   Yes, you should.

MR McBETH:   Yes, indeed, thank you, your Honour.  The reason that I say there is a live issue is because, as I mentioned, both defendants resigned their Senate seats in July 2017 before either of these matters was filed and before either defendant was declared to be incapable of being chosen in the 2016 election following the referral to the Court of Disputed Returns under section 376 of the Commonwealth Electoral Act.

Now, this Court in Alley v Gillespie determined that liability under the common informers cause of action can only be established by a prior determination under section 47 of the Constitution. I am taking that, your Honour, from paragraph 74 of the judgment of Justice Gageler. The same point is made in paragraph 67 of the judgment of the plurality.

Does your Honour have a copy of the Commonwealth Electoral Act?

HER HONOUR:   Yes, I do.

MR McBETH:   Could I take your Honour to that, specifically to section 381 – the heading “Division 2 – Qualifications and vacancies” that begins with section 376.  Section 376 is about the reference of questions as to qualification or vacancy.  It was under that section that the reference regarding the defendants was made in the matter of Re Canavan.  Section 381 within that division provides that the provisions of certain sections, including section 374, apply so far as applicable to proceedings on a reference to the Court of Disputed Returns under this part.  Then, if your Honour could turn to section 374, it says:

Effect shall be given to any decision of the Court as follows:

(i)If any person returned is declared not to have been duly elected, the person shall cease to be a Senator or Member of the House of Representatives -

So on that language it is at least arguable that it is a prospective disqualification rather than a retrospective qualification which would mean that in the case of the defendants in this matter the disqualification would operate from the date of the orders pronounced by this Court in Re Canavan which were 27 October 2017 and of course neither ‑ ‑ ‑

HER HONOUR:   How does that sit with the finding in Alley v Gillespie that the effect of the disqualification in a sense was from nomination?

MR McBETH:   If that is the finding in Alley v Gillespie, your Honour, then that would not sit well.  In that case it would not be tenable to suggest that it was prospective.  In my submission, it was at least arguable that that is the effect.  That is one issue.  A related issue is that given that the Court in Alley v Gillespie said that the disqualification itself is a necessary element of cause of action, in effect, the writ must have been incompetent at the time it was filed because the cause of action had not accrued.

HER HONOUR:   Sorry.

MR McBETH:   The cause of action had not accrued at the time that the writ was filed and served and so cannot disclose a cause of action in any event.  So there is, as I say, at least some question as to whether there could be any liability under paragraph (a) in the case of these defendants, but on

any view there is no prospect whatsoever of any liability under paragraph (b) because that paragraph applies only to the days on which the person sat subsequent to the day on which the writ was served, and there were no such days in the case of these defendants.

So from the defendants’ point of view the possible outcomes here are there is either no liability under paragraph (a) or there is liability to a penalty of $200 under paragraph (a) only.  The expense of the litigation and the occupation of the resources of this Court could not be justified to litigate that difference between zero and $200.  So taken together with the deficiencies in the statement of claim and the fact there is no prospect of success beyond the $200 mark, in my submission the matter ought to be either dismissed or stayed.

As to the deficiencies in the statement of claim, I also note, your Honour, that the plaintiff was put on notice in correspondence from the defendants on 22 September, that is to say two days after the writ was served, as to what those deficiencies were and as to the fact that the defendant could not possibly plead in response to the statement of claim as served and there has been no amendment to the statement of claim after that time.

So, on all of those bases and also on the alternative basis that given the consent orders that your Honour pronounced this morning in the matter of Barrow under subsection (3), allowing this matter to proceed could, at best for the plaintiff, result in a duplication of that very same penalty that your Honour has already ordered this morning then your Honour ought not allow the matter to proceed because of the operation of section 3(3) of the Common Informers Act and so it should be stayed on that alternative basis, your Honour.

HER HONOUR:   Anything else, Mr McBeth?

MR McBETH:   No, your Honour.

HER HONOUR:   Thank you.  Mr King.

MR KING:   Yes, thank you, your Honour.  Your Honour, can I just clarify that we are dealing with the summons for direction which was our understanding of what was to occur today.  I have not heard any argument of the sort – either in my friend’s written submissions or until now in relation to the Commonwealth Electoral Act point in respect of subsection (a) of section 3(1) of the Act.  We just have not had any notice of that or an opportunity to consider it.

HER HONOUR:   Would you like time to put submissions in in relation to that?

MR KING:   Yes, we certainly can do that, your Honour.

HER HONOUR:   How many days do you need, Mr King?

MR KING:   Seven days, your Honour, to respond to that.

HER HONOUR:   Perfect.

MR KING:   Has your Honour seen our written submissions of yesterday?

HER HONOUR:   I have.  So the position was this.  The reason why I – as I said to you at the outset, when you stood up you sought judgment and that caused me some concern which is the reason why I raised those very significant and substantial substantive matters with you.  But, as you will have understood from the debate I have just had with Mr McBeth and also from the extensive submissions of Mr McBeth, these substantive issues really fall into, in effect, two stages to the proceeding.  Not only would they affect any application for judgment, which I understand you have now abandoned, but secondly, they effect more significantly for present purposes whether or not the matter should be entitled to proceed, given the deficiencies exist in a statement of claim and as a matter of law and I think that is what you will need to address in your submissions which you are going to file within seven days.

MR KING:   Yes, thank you, your Honour.  Can I just indicate in response to my friend’s point about section 3(1)(b), on the face of these writs of summons it is plain and apparent that this is not a 3(1)(b) case, this is a 3(1)(a) case.  Each of the days that are particularised by ‑ ‑ ‑

HER HONOUR:   I am sorry, Mr King, but that is the first time that I knew that there was no claim under section 3(1)(b) was with you telling me that now.  So that just identifies with absolute clarity the very problem with this writ of summons and statement of claim or at least one of the problems only – as I said I think there are a number.

MR KING:   Can I just indicate in response, your Honour, and we did point this out in the correspondence, that if we were to claim – this writ plainly does not claim any days subsequent to the date of the writ.  It only claims dates prior to the date of the writ and, indeed, prior to the date ‑ ‑ ‑

HER HONOUR:   The problem with that is it is not the date of the writ which is the distinguishing factor which is one of the reasons I raised with you before.  If one goes to section 3(1)(a) and (b), the important date for relevant purposes between the division of the two categories is the day on which the originating process in the suit is served on the defendant.

MR KING:   Yes, and our particulars relate only to 12 months prior to that date.

HER HONOUR:   No, there are two different time limits.  There is the 3(1)(a) and (b) and then there is an additional time limit imposed under section 3(2).

MR KING:   Yes, and we say, your Honour, that the dates particularised in paragraph 2 of the statement of claim precisely coordinate with those limitations, in other words ‑ ‑ ‑

HER HONOUR:   Well, that is what is not clear or at least one of the additional matters that is not clear on the statement of claim.  Anyway, let us come back to ‑ ‑ ‑

MR KING:   As a factual matter, your Honour, though that is the position we say.

HER HONOUR:   I see.

MR KING: We submit that it is the facts that are the critical aspect. We can make it more apparent, if we have not already in the correspondence, that this is a claim in respect of 12 months prior to the date of service of the writ. That is what paragraph 2 of the statement of claim makes clear and the only admission in terms of particulars from this document, which was an impossibility at the time it was filed, was that the defendant was not, in each case, a person declared by the Constitution to be so incapable.

The reason for that is that the decision in Alley had not been made at the time this summons was filed and it has since been made and that decision was on 18 March.  In that decision it was made apparent that the writ is not summarily dismissible merely because it does not specify the nature of the declaration.  The writ is simply stayed until the declaration has occurred.  In this case that is exactly what has happened.

HER HONOUR:   No.  I think you and I are at cross‑purposes.  I raised with you a list of what I regarded as potential questions for me, and for you, about the form of this writ and statement of claim.

MR KING:   Yes, thank you.

HER HONOUR:   Mr McBeth has raised some additional matters it would seem – in addition to those that I raised with you.  This is not a question

about it being stayed at that point.  The question is what has happened in the intervening period and what I am now faced with.

MR KING:   Yes.  Thank you, your Honour.  We would respectfully submit that these are questions of form and that the appropriate way to deal with it is in the orders as proposed by my friend at paragraph 22 of his submissions, which we only received yesterday, and which we would not oppose.  It will involve two amendments to the statement of claim to make it clear that this is a 3(1)(a) claim, not a 3(1)(b) claim, and to then specify the declaration, that is in the cases of Re Ludlam and Re Waters which is the foundational basis specified in Alley v Gillespie for making such a claim.

But the substratum, we respectfully submit, of the whole claim is apparent and we would submit that the form questions can be addressed and should be addressed in the way we have proposed and, indeed, as my friend has proposed in his orders.

HER HONOUR:   Yes.  I am not prepared to make those orders, Mr King, for the reasons that I have outlined to you.  I think that there are some serious concerns about this matter.  What I propose to do is to give you seven days to file any further written submissions directed to the question about whether or not both proceedings should be stayed and/or dismissed and you might turn your mind to the matters that I have raised with you, as well as the matters raised by Mr McBeth, both in his written submissions and in his oral submissions.

MR KING:   Thank you, your Honour.  We will do that.

HER HONOUR:   Mr McBeth, do you wish to say anything further this morning?

MR McBETH:   No, your Honour.

HER HONOUR:   I do not propose that the matter should be relisted at this moment.  I will wait to see what Mr King’s submissions look like, Mr McBeth.  I will give you a period of seven days to respond yourself if you would like to and you should notify both Mr King and the Court whether you wish to take up that opportunity or not and the Court will then advise you of what it proposes to do.

MR McBETH:   Do I take it, your Honour, that we can receive Mr King’s submissions before electing whether to take the opportunity or not?

HER HONOUR:   Yes.

MR McBETH:   Yes, thank you.

HER HONOUR:   So once you have received them and had an opportunity to consider them perhaps you would let both Mr King’s solicitors and the Court know what course you propose to take.

MR McBETH:   Yes, as the Court pleases.

HER HONOUR:   Anything else, Mr King?

MR KING:   No, thank you, your Honour.

HER HONOUR:   Mr McBeth?

MR McBETH:   No, your Honour.

HER HONOUR:   Thank you.  Adjourn the Court.

AT 10.16 AM THE MATTER WAS ADJOURNED