GLEESON CJ, GUMMOW, KIRBY, HAYNE, CALLINAN, HEYDON AND CRENNAN JJ
Matter No S356/2006
RICHARD ALBARRAN APPELLANT
AND
MEMBERS OF THE COMPANIES AUDITORS AND LIQUIDATORS DISCIPLINARY BOARD & ANOR RESPONDENTS
Matter No S361/2006
VANDA RUSSELL GOULD APPELLANT
AND
DONALD MAGAREY & ORS RESPONDENTS
Albarran v Members of the Companies Auditors and Liquidators Disciplinary Board
Gould v Magarey [2007] HCA 23 24 May 2007 S356/2006 & S361/2006
ORDER
In each matter, the appeal is dismissed.
On appeal from the Federal Court of Australia
Representation
N Perram SC with A D Crossland for the appellant in Matter No S356/2006 (instructed by NOT Lawyers)
B W Walker SC with P J Brereton and P Kulevski for the appellant in Matter No S361/2006 (instructed by Henry Davis York)
Submitting appearances for the first and second respondents in both matters
Intervener
H C Burmester QC with K L Eastman intervening on behalf of the Attorney-General of the Commonwealth in both matters (instructed by Australian Government Solicitor)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Albarran v Members of the Companies Auditors and Liquidators Disciplinary Board
Gould v Magarey
Constitutional law (Cth) – Separation of powers – Judicial power – On the application of the Australian Securities and Investments Commission, the Companies Auditors and Liquidators Disciplinary Board ("the Board") suspended the registration of the appellants as liquidators pursuant to s 1292 of the Corporations Act 2001 (Cth) – Whether s 1292 of the Corporations Act 2001 (Cth) invalidly confers the judicial power of the Commonwealth upon the Board.
Constitutional law (Cth) – Judicial power – Meaning of judicial power – Whether disciplinary proceedings involve the exercise of judicial power – Whether the determination of wrongdoing or impropriety involves the exercise of judicial power – Whether the capacity to affect the appellants' "status" as registered liquidators involves the exercise of judicial power.
Insolvency – Liquidators – Suspension of registration as liquidator – Role and function of the Board – Whether the functions performed by the Board involved the ascertainment or enforcement of an "existing right or liability" – Whether the function performed by the Board involved the imposition of punishment – Relevance of the composition and membership of the Board – Relevance of the exercise of evaluative or discretionary power – Relevance of historical considerations – Relevance of chameleon principle – Whether the Board exercised judicial power.
Insolvency – Liquidators – Suspension of registration as liquidator – Meaning of "adequately and properly" and "fit and proper" in s 1292(2) of the Corporations Act 2001 (Cth).
Words and phrases – "adequately and properly", "chameleon principle", "disciplinary", "existing right or liability", "fit and proper", "functional analysis", "judicial power of the Commonwealth", "punishment", "registered liquidator", "separation of powers".
GLEESON CJ, GUMMOW, HAYNE, CALLINAN, HEYDON AND CRENNAN JJ.…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Albarran v Companies Auditors and Liquidators Disciplinary Board [2007] HCA 23
Case
[2007] HCA 23
Decision Date
CaseChat Overview and Summary
In Albarran v Members of the Companies Auditors and Liquidators Disciplinary Board, the appellants, registered liquidators, challenged the constitutional validity of section 1292(2) of the Corporations Act 2001 (Cth). This provision empowered the Companies Auditors and Liquidators Disciplinary Board (the Board) to suspend or cancel a liquidator's registration under certain circumstances, including failure to perform duties adequately and properly or being otherwise not a fit and proper person. The appellants argued that this power constituted the exercise of the judicial power of the Commonwealth, which, under the Australian Constitution, can only be vested in Chapter III courts.
The central legal issue before the High Court of Australia was whether the functions performed by the Board under section 1292(2) involved the exercise of the judicial power of the Commonwealth. This required the Court to determine whether the Board's power to suspend or cancel registration was akin to adjudicating guilt, enforcing existing rights or liabilities, or imposing punishment, all hallmarks of judicial power. The appellants contended that the Board's disciplinary proceedings and its capacity to affect their status as registered liquidators amounted to an exercise of judicial power, rendering section 1292(2) invalid.
The High Court, in dismissing the appeals, reasoned that the Board's functions under section 1292(2) did not involve the exercise of judicial power. The Court emphasised that the Board did not adjudicate guilt or inflict punishment. Instead, its role was to assess whether a liquidator met the required standards of conduct and fitness to remain registered. The Court noted that the Board lacked the power to enforce its own decisions, and that any enforcement required the exercise of jurisdiction by a court. Furthermore, the Board's decisions were subject to review by the Administrative Appeals Tribunal, indicating a non-judicial character. The Court concluded that while the Board's actions affected the "status" of registered liquidators, this did not automatically equate to the exercise of judicial power, and that the functions vested in the Board were not of a character that necessitated judicial performance.
Orders
Orders of the court
In each matter, the appeal is dismissed.(All members of the Court)
Background
Background to the litigation
It should be noted immediately that the citation by the appellants of Rich v Australian Securities and Investments Commission[7] does not assist them. That case concerned a different field of discourse, namely, the application of the body of law concerning privileges against penalties and forfeitures to court proceedings under ss 206C and 206E of the Corporations Act for disqualification of directors, in the course of which the directors were ordered to give discovery of documents. [7](2004) 220 CLR 129 at 145 [32].The facts Something now should be said respecting the facts. Mr Vanda Russell Gould has been registered as a liquidator under the Corporations Act and its predecessors since 7 January 1983. On 15 July 2001, ASIC applied to the Board for an order suspending Mr Gould's registration. On 21 December 2004, the Board made various orders including an order that the registration of Mr Gould as a liquidator be suspended for a period of three months. The orders had been preceded by a written determination and supporting reasons published on 26 August 2004. Mr Gould applied in this Court for prohibition against the Board and ASIC to prevent the taking of any further steps pursuant to the determination and the order. He also claimed a declaration that certain laws, in particular s 1292 of the Corporations Act, were invalid on the ground that the power to impose a penalty or otherwise punish a person is exclusively part of the judicial power of the Commonwealth and could not be exercised by the Board. The proceedings in this Court were remitted to the Federal Court and Black CJ directed that the Gould proceeding and the Albarran proceeding be dealt with by a Full Court. Mr Richard Albarran has been registered as a liquidator under the Corporations Act and its immediate predecessor since 19 August 1999. On 6 January 2005, ASIC applied to the Board for an order that Mr Albarran's registration be cancelled. Before the application was heard by the Board, Mr Albarran applied to this Court for an order preventing the taking of any further steps in the ASIC application. This Court refused a stay of the ASIC application and the balance of the cause was remitted to the Federal Court. The Board proceeded to a determination on 23 December 2005. This was adverse to Mr Albarran and, on 3 May 2006, the Board ordered a nine months suspension of his registration. On 21 March 2006, the Full Court heard argument in the Gould proceeding and the Albarran proceeding and, on 19 May 2006, published reasons in support of the conclusion that the exercise by the Board of power under s 1292(2) of the Corporations Act does not involve the exercise of the judicial power of the Commonwealth, with the consequence that each proceeding was to be dismissed with costs.The Board determinations Section 1292(2) provides as follows:"The Board may, if it is satisfied on an application by ASIC for a person who is registered as a liquidator to be dealt with under this section that, before, at or after the commencement of this section:(a)the person has:(i)contravened section 1288; or(ii)ceased to be resident in Australia; or(d)that the person has failed, whether in or outside this jurisdiction, to carry out or perform adequately and properly:(i)the duties of a liquidator; or(ii)any duties or functions required by an Australian law to be carried out or performed by a registered liquidator;or is otherwise not a fit and proper person to remain registered as a liquidator;by order, cancel, or suspend for a specified period, the registration of the person as a liquidator."
Structured in a slightly different way, similar functions might possibly have been vested in a Ch III court. But the functions vested in the Board were not of such a character that they required judicial performance. Conclusion and order It follows that the appellants' challenges to the constitutional validity of s 1292(2) of the Corporations Act were rightly dismissed by the Full Court, substantially for the reasons that it gave. As the joint reasons propose, each appeal should be dismissed.
Ratio Decidendi
Legal Principle Established
Established by:
GLEESON CJ, GUMMOW, HAYNE, CALLINAN, HEYDON AND CRENNAN JJ,
KIRBY J
The Australian Securities and Investments Commission ("ASIC") is the second respondent in each appeal. Both the Board and ASIC entered submitting appearances. The active opposition to the appeals was provided by the Attorney-General of the Commonwealth as intervener.The registration of liquidators Part 9.2 (ss 1276‑1298) of Ch 9 of the Corporations Act is headed "Registration of auditors and liquidators". Prohibitions are imposed by s 532(1) and s 448B of the Corporations Act respectively upon persons acting as a liquidator, or as administrator of a company or deed of company arrangement. These prohibitions are backed by the offence provision in s 1311(1) and in Pt 9.6A provision is made[2] for the vesting of federal jurisdiction in respect of criminal matters arising under the Corporations Act.[2]By Div 2 (ss 1338A-1338C). See generally Gordon v Tolcher (2006) 81 ALJR 507 at 509 [10], 511‑512 [29]‑[33]; 231 ALR 582 at 584, 587‑588. A registered liquidator is relieved from the effect of the prohibitions imposed by s 532(1) and s 448B, but suspension or cancellation of registration by the Board reactivates those prohibitions. However, enforcement of a suspension or cancellation order made by the Board requires the exercise by a court of jurisdiction provided for in Pt 9.6A of the Corporations Act. Section 1292 of the Corporations Act confers certain powers and functions on the Board. In particular, it is s 1292(2) which provides that, in the stipulated circumstances, the Board may by order cancel or suspend for a specified period the registration of a person as a liquidator. From decisions of the Board applications may be made under s 1317B for review by the Administrative Appeals Tribunal[3].[3]See Fletcher v Commissioner of Taxation (1988) 19 FCR 442 at 451‑453. Thus, not only does the Board lack the power to enforce its decisions[4], they are not conclusive in the sense used in authorities such as Attorney-General (Cth) v Breckler[5] and Luton v Lessels[6]. Nor, as will appear, does the Board settle disputes about existing rights and duties.[4]See Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 at 259‑260, 268‑269.[5](1999) 197 CLR 83 at 111‑112 [46]-[47].[6](2002) 210 CLR 333 at 346 [24], 360 [76], 374‑375 [127]-[128]. Nevertheless, the appeals challenge the holding by the Federal Court that the power conferred on the Board by s 1292(2) does not involve the exercise of the judicial power of the Commonwealth and that s 1292(2) is not an ineffective attempt by the Parliament to confer such power on a body other than one of the courts identified in Ch III of the Constitution. In a limited sense, it may be said that the exercise by the Board of its powers under s 1292(2) of cancellation and suspension affects the "status" of registered liquidators. But the invocation of that term does not necessarily lead to any particular answer to the questions of constitutional law raised in these appeals. In particular, and for reasons to be developed below, the Board does not adjudicate guilt or inflict punishment when acting under s 1292(2).