Altobelli & Ors v The Commonwealth of Australia

[2011] HCATrans 259

[2011] HCATrans 259

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S211 of 2011

B e t w e e n -

THOMAS ALTOBELLI AND BARBARA AVALON BAKER AND MICHAEL PETER BAUMANN AND EVELYN RUTH BENDER AND JAMES HAROLD BREWSTER AND JAMES STEWART BROWN AND PHILIP DONALD BURCHARDT AND MICHAEL JOHN FRANCIS BURNETT AND ROBERT ANGUS CAMERON AND MARGARET MARY CASSIDY AND GILES ANTHONY COAKES AND STEPHEN PATRICK COATES AND JOHN McGILCHRIST COKER AND PETER RAYMOND COLE AND MICHAEL KEVIN CONNOLLY AND ANNE ELIZABETH DEMACK AND WARREN LESLIE DONALD AND LEWIS ROLF DRIVER AND DAVID IAN DUNKLEY AND SYLVIA RUTH WHISTLER EMMETT AND GARRY FREDERICK FOSTER AND DAVID PETER HALLIGAN AND NORAH HELENE HARTNETT AND LOUISE HELEN HENDERSON AND PAUL ANTHONY JOSEPH HOWARD AND KATE HELENA HUGHES AND MICHAEL JARRETT AND CHARLOTTE MARIE SIMEON KELLY AND DALE JAMES KEMP AND KEVIN MATHEW LAPTHORN AND STUART HAMILTON LINDSAY AND MICHAEL LLOYD‑JONES AND TERRENCE JOHN McGUIRE AND CHRISTINE ANN MEAD AND GEOFFREY IAN MONAHAN AND WARWICK JOHN NEVILLE AND NICHOLAS SAMUEL NICHOLLS AND DANIEL PATRICK O’DWYER AND JOHN LEONARD O’SULLIVAN AND JOHN HENRY PASCOE AND MAURICE BEAUMONT PHIPPS AND SUSAN FAY PURDON‑SULLY AND KENNETH RAPHAEL AND GRANT THEO RIETHMULLER AND HEATHER MARGARET RILEY AND STUART ALDEN ROBERTS AND STEPHEN HUGH SCARLETT AND ROBYN MARGARET SEXTON AND DENYS OLIVER SIMPSON AND KEITH ALAN SLACK AND LEANNE KATHLEEN SPELLEKEN AND JANET MADELON TERRY AND JEFFREY FRANK EDWARD TURNER AND LEANNE FAYE TURNER AND JUDITH ANNE WALKER AND JOHN MYER WALTERS AND DOMINICA MARY WHELAN AND JOSEPHINE ANNE WILLIS

Plaintiffs

and

THE COMMONWEALTH OF AUSTRALIA

Defendant

GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON TUESDAY, 13 SEPTEMBER 2011, AT 2.28 PM

Copyright in the High Court of Australia

MR A.W. STREET, SC:   May it please the Court, I appear for the plaintiffs with my learned friend, MR R.A. YEZERSKI.  (instructed by Yeldham Price O’Brien Lusk Lawyers)

MR S.J. GAGELER, SC, Solicitor‑General for the Commonwealth of Australia:   If your Honour pleases, I appear for the defendant.  (instructed by Australian Government Solicitor)

MR STREET:   Your Honour, there is a summons, obviously, for directions and there are two affidavits in support, apart from the affidavit of service of the 78B.  They are of Timothy Randolph Price sworn 9 September and 1 July.  The 9 September annexes the latest version of the proposed amended statement of claim and also the proposed draft special case.

HIS HONOUR:   This is the affidavit of Mr Price sworn 9 September?

MR STREET:   Yes, your Honour.

HIS HONOUR:   Just pardon me a minute.  Now, I am just looking at the questions for determination.  What is the purport of the first question, the definition of “judge” in section 4 of the current pension legislation?  It precludes your clients at the moment.

MR STREET:   Your Honour, it does not because the definition excludes a federal magistrate in section 4, so that ‑ ‑ ‑

HIS HONOUR:   Yes, that is what I am saying.  At the moment, it excludes your client.

MR STREET:   Yes, and it is that amending Act, Schedule 18 of the Federal Magistrates (Consequential Amendment) Act 1999, and its validity, which is the first subject of our argument, that that provision is invalid and that Parliament had fixed the remuneration for a federal judge.

HIS HONOUR:   Yes, I see.

MR STREET:   So the first case is, in essence, a question of the constitutionality of the amending Act and if, in our submission, the Court were to accept the propositions we advance in relation to section 72, that amending Act is invalid.  If the Court does not accept our argument in relation to section 72 in relation to the amending Act we say that, in essence, there is still nonetheless a structural component that the plaintiffs are entitled to in the nature of a guaranteed pension for life that the Court can declare.

HIS HONOUR:   How would that be implemented?

MR STREET:   Your Honour, it is for Parliament to fix.  It is not for this Court.  This Court is able to declare, in our respectful submission ‑ ‑ ‑

HIS HONOUR:   Well, where would the power of the Parliament to fix be?

MR STREET:   In section 72, your Honour.

HIS HONOUR:   Section 72?

MR STREET:   Section 72 is the power to fix.

HIS HONOUR:   “Such remuneration” for judges.

MR STREET:   Yes, your Honour.

HIS HONOUR:   Well, they are not judges when they are pensioners.

MR STREET:   Your Honour, the federal magistrates at the moment, because of the amendment, are purportedly excluded from the Judges’ Pensions Act.  So the case, in essence, is one where our argument remains the same, both in terms of the challenge to the validity of the amending Act as well as what I will call the declaration that we seek in terms of an entitlement.  It is founded on precisely the same constitutional facts, we say in argument, that in this case the federal magistrates have no pension component.  So that upon cessation of office not only does their salary cease they have no component of what I will call a guaranteed life pension and we say ‑ ‑ ‑

HIS HONOUR:   Just a minute, has there always been a judges’ pension provision in the federal sphere?

MR STREET:   Your Honour, prior to the Judges’ Pensions Act 1968 one had, obviously, in existence the life appointment which remained until the referendum ‑ ‑ ‑

HIS HONOUR:   No, there was the Judges’ Pensions Act 1948, was there not?

MR STREET:   I think your Honour is correct, yes, but there was, nonetheless, the life appointment that was taken away by the referendum in 1977.  So, your Honour, one had at that time no question of continuity of, in essence, the component in the nature of remuneration by way of salary and

pension.  There was not an issue that could arise.  When the Judges’ Pensions Act was passed in ‑ ‑ ‑

HIS HONOUR:   Why?  They did not always serve until they dropped.

MR STREET:   Well, your Honour, nonetheless we would have respectfully submitted that to the extent that one was looking to see was there a protection, a protection was found in section 72 because they were life appointments.  So, your Honour, could I just indicate that in the present case the issue, as I understand, that is raised by the Commonwealth is the suggestion that there is some scope for factual dispute which the plaintiffs respectfully submit does not arise.  We say that our case is not a case of what I will call a quantitative kind.  It is simply one of a structural component that we say the plaintiffs are entitled to pursuant to section 72.  That structural component, we contend, is a guaranteed pension.

HIS HONOUR:   Let me ask the Solicitor, in the Commonwealth’s outline of submissions, paragraph 4, that phrase “financial insecurity” that is picked up from somewhere in Mr Street’s documents?

MR GAGELER:   From almost everywhere, your Honour.  If your Honour has the proposed amended statement of claim, which would be within the affidavit ‑ ‑ ‑

HIS HONOUR:   Yes.

MR GAGELER:   One starts with paragraph 17 and moves to paragraph 18 - your Honour will see the language of “financial insecurity”.  Then paragraph 19 spells that out by reference to the security necessary to avoid “an actual or perceived threat to judicial independence”.  Then you go to paragraph 29 – this becomes progressively more alarming as one reads.  At paragraph 29 again you will see the same reference to “financial insecurity”.  Paragraph 30 it becomes “financial uncertainty” and then your Honour will see what is said to be the consequence of this financial insecurity in paragraph 31.

HIS HONOUR:   Yes.

MR GAGELER:   It is then said in paragraph 33, apparently accepting that the alleged financial insecurity that comes from not having the same pension entitlements as a Federal Court judge might be redressed in fact by other aspects of the remuneration package.  It is said that the financial insecurity “is not redressed” – a factual allegation.

HIS HONOUR:   Sorry, which paragraph?

MR GAGELER:   Paragraph 33, your Honour.  So it is said that this alleged financial security “is not redressed” by, amongst other things, the 15 per cent superannuation entitlement.  Other aspects of the remuneration package are not spelt out, but apparently are meant to be included within that.  All of this, apparently, is said to be somehow relevant to the pleading in paragraphs 36 and 37 that the amendment to the Pension Act in 1999 to exclude a federal magistrate from the definition of “judge” is invalid.  But your Honour reads on in paragraph 38, where it says:

Further, and in the alternative, if Schedule 18 of the Amending Act is valid, the remuneration and provision after retirement provided to Federal Magistrates does not satisfy the minimum requirements imposed by Ch. III.

You tie that to the relief that is sought in paragraph 41, which is an extraordinary declaration.  Underlying it all, your Honour, is this notion that there is some minimum constitutional level of financial security required in retirement that is reflected, apparently, in the existing terms of the Judges’ Pensions Act and this flows through to our learned friend’s proposed special case where there is a rather bland fact recited in the proposed paragraph 39 based on “Reasonable actuarial estimates”.  I do not know if your Honour has that.

HIS HONOUR:   Whereabouts is this?

MR GAGELER:   Again, it is within that affidavit.  It is the draft special case.  This is the document that our learned friends want us to sign up to.

HIS HONOUR:   Yes.  Whereabouts, though?

MR GAGELER:   If you go to page 7, paragraph 39.

HIS HONOUR:   Yes, I see.

MR GAGELER:   So what it says is that:

Reasonable actuarial estimates indicate that a Federal Magistrate’s annual income in retirement from the superannuation accrued under the Superannuation Arrangements could be between 6% and 32% of the annual income that the Federal Magistrate would have received if he or she were entitled to a judicial pension under the Pension Act.

Now, implicit in that appears to be some notion that the entitlement that a judge would receive under the Pension Act is a constitutionally required entitlement in quantum and what is being sought to be compared here is the remuneration or benefits that would be received in fact.  That is said to be

based on reasonable actuarial estimates.  Our actuarial estimates are really quite different, but the point is the comparison is just a false comparison.  There is much more that can be said, your Honour.

HIS HONOUR:   I was just wondering about this Consequential Amendments Act 1999, Schedule 18.

MR GAGELER:   Yes.

HIS HONOUR:   Was all that synchronised so that at the time the Magistrates Court was set up, this from day one was the pension arrangement?

MR GAGELER:   Yes, and every one of these magistrates has been appointed and sworn a judicial oath in those circumstances, your Honour.  Yes.

HIS HONOUR:   Yes, Mr Street.

MR STREET:   If the Court pleases.  Your Honour, can I just respond.  In relation to the issue of financial insecurity that, in essence, is the ultimate constitutional question in terms of the want of independence required by section 72.  It is not in the special case that we propose.  There is no fact in the special case that we have articulated that picks up that language.  So, your Honour, can we start by saying that what was honed in on in the pleading is something we say is ultimately an inference for the Court ‑ ‑ ‑

HIS HONOUR:   Well, it should not be in the pleading, Mr Street.  You cannot have it every way.  What is the point of paragraph 33 of the pleading?

MR STREET:   No, no, I am sorry, your Honour.  What I was seeking to say was ultimately it is a matter for the Court, if it seeks to draw that inference, which we would seek to persuade the Full Court to draw.  The facts, we would have said, cannot be the subject of dispute in terms of the underlying facts.  The ultimate constitutionality or the ultimate constitutional question in terms of whether or not there is a want of independence required by section 72 for want of the component in terms of the nature of a pension is a matter for the Court to determine.  Ultimately, this Court only can determine that fact.  So, your Honour, in terms of the special case, there is nothing in the draft special case that identifies financial ‑ ‑ ‑

HIS HONOUR:   Only this Court can determine that fact, why?

MR STREET:   Ultimately, it is this Court that must determine the constitutional facts.  This Court is the ultimate determiner of the ‑ ‑ ‑

HIS HONOUR:   It is not the only determinant of constitutional facts.

MR STREET:   Ultimate – but yes, your Honour, I accept it is not the only.  Your Honour, can I just focus in on the issue of criticism that has been advanced in terms of financial insecurity.  That does not form part of our pleaded – at least of our proposed special case.  There is no reference in the special case to that fact.  Further, your Honour, to the extent that it is advanced that there is some problem with paragraph 39, your Honour, our argument does not turn on paragraph 39 and if that was opposed that paragraph could be deleted.

Your Honour, so far as the plaintiffs are concerned, the proposed special case is one which does not involve any relevant question of fact which we would have said needs to be remitted to some other court to determine.

HIS HONOUR:   At the moment, I am not sure I really understand all the aspects of your case, Mr Street.  You use this expression “entitlement” – looking at the proposed questions.

MR STREET:   Yes, your Honour.

HIS HONOUR:   Where do we see that?

MR STREET:   If one goes to the proposed special case, what we seek to advance first ‑ ‑ ‑

HIS HONOUR:   Just a minute.  So Schedule 18 was invalid and if that does not work out you then want declarations.

MR STREET:   On the same argument, your Honour, that is that section 72 provides an entitlement to a structural component ‑ ‑ ‑

HIS HONOUR:   That provides an entitlement – what does that mean?

MR STREET:   That section 72 entrenches the benefit of a component in the nature of a guaranteed pension for life so that one has, in essence, a fixed benefit ‑ ‑ ‑

HIS HONOUR:   Wait a minute, Mr Street.

MR STREET:   From the time of appointment, your Honour.

HIS HONOUR:   It creates a debt, does it?

MR STREET:   Your Honour, in terms of guarantee, it would be obviously an obligation by the Commonwealth, yes.  So it is not a contributory ‑ ‑ ‑

HIS HONOUR:   Requires an appropriation, does it, to meet it?

MR STREET:   Your Honour, it must be fixed by the Parliament.  We accept that there will be ‑ ‑ ‑

HIS HONOUR: Just listen to me for a minute. It might be a good idea. Most of the implications in the Constitution, I think, impose limitation upon what otherwise would be a legislative or executive power. You seem to be using an implication to create an extension to legislative power and deal not only with the power, but impose a duty to exercise it upon the Parliament. That seems to me to be pretty novel.

MR STREET:   Your Honour, there is – in section 72 it has language that requires the Parliament to fix and section 72 imposes an obligation to fix.  What we say it imposed an obligation to fix is a component for life which is what I will call a fixed benefit.  That fixed benefit for life is not provided ‑ ‑ ‑

HIS HONOUR:   It says “Shall receive such remuneration as the Parliament may fix”.  It says nothing as to the level of remuneration and it is remuneration in office, surely.

MR STREET: Your Honour, our case is not, and nor do we seek to make it, one where the Court is to look at what I will call a quantitative analysis. It is the component. We say that a fixed benefit in the nature of a guaranteed pension for life must be a component that must, under section 72, be provided for for a Justice appointed under section 72. We say the language and obligation to do so is found in the Constitution. So, your Honour, our case is not one which involves questions of fact. It is one which, in our respectful submission ‑ ‑ ‑

HIS HONOUR:   At the moment I would not put that case before a Full Court because it does not seem to be properly based on the statement of claim.

MR STREET:   Your Honour, we would seek, if we can, the opportunity to further amend, to remove the ‑ ‑ ‑

HIS HONOUR:   No, we are not going round and around, Mr Street.  Now, why should I not remit this to the Federal Court where all these matters can

be sorted out, including any actuarial material that has to be put before the court?

MR STREET:   Your Honour, there is no actuarial material that we would respectfully submit that was necessary.

HIS HONOUR:   It will be if it goes to trial without a stated case, will there not?  If it goes to trial on your pleading there will be.  At the moment I am not foreclosing what any Federal Court judge might say as to the stating of any case to the Full Court of the Federal Court.

MR STREET:   Your Honour, at this stage we would respectfully submit that it would be appropriate to retain in this Court given the absence of factual dispute, but if your Honour is disposed to remit it, your Honour, in our respectful submission, it is not one which we would have said was appropriate for remittal in circumstances where there is no real issue of fact and the Commonwealth has not put on any evidence to identify some area of fact.  The assertion that there is an actuarial case that needs to be developed is contrary to the proposition I put that ours is a structural case in respect of components and not one dealing with a quantitative case in terms of the nature of the rights asserted.  If the Court pleases.

HIS HONOUR:   Now, if I am against you on the question of remitter or non‑remitter, do you have any objections to the timetable and steps proposed in paragraph 7 of the defendant’s outline today?

MR STREET:   No, your Honour.

HIS HONOUR:   Having listened to the oral submissions and considered the written outline of submissions that were filed for today’s directions hearing, in my view the appropriate course is to follow that proposed in paragraph 7 of the Commonwealth submissions.  I therefore direct as follows:

1.The matter be remitted to the Federal Court of Australia –

It is New South Wales Registry, is it not?

MR STREET:   Yes, your Honour.

MR GAGELER:   Yes, your Honour.

HIS HONOUR:  

1.The matter be remitted to the Federal Court of Australia, New South Wales District Registry, pursuant to section 44(1) of the Judiciary Act 1903 (Cth).

2.The matter proceed in the Federal Court as if the steps taken in the matter in this Court had been taken in the Federal Court.

3.The Deputy Registrar of this Court forward to the proper officer of the Federal Court photocopies of all documents filed in this Court.

4.The plaintiffs’ summons for directions filed on 4 July 2011 be adjourned to a date to be fixed by the Deputy District Registrar of the Federal Court.

5.The costs of this action to the date of remitter, including the costs of this order, be costs according to the scale applicable to proceedings in this Court and thereafter according to the scale applicable in the Federal Court and in the discretion of the Federal Court.

6.The costs of the summons by the plaintiffs filed on 4 July be costs in the cause.

I make those directions.

MR STREET:   If the Court pleases.

AT 2.50 PM THE MATTER WAS CONCLUDED