Australian Education Union v General Manager of Fair Work Australia Tim Lee & Ors

[2011] HCATrans 245

[2011] HCATrans 245

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M8 of 2011

B e t w e e n -

AUSTRALIAN EDUCATION UNION

Applicant

and

GENERAL MANAGER OF FAIR WORK AUSTRALIA TIM LEE

First Respondent

PRESIDENT OF AUSTRALIAN PRINCIPALS FEDERATION FRED WUBBELING

Second Respondent

AUSTRALIAN PRINCIPALS FEDERATION

Third Respondent

Application for special leave to appeal

GUMMOW J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 2 SEPTEMBER 2011, AT 10.01 AM

Copyright in the High Court of Australia

MR P.J. HANKS, QC:   Your Honours, I appear with MR J.H. KIRKWOOD for the applicant.  (instructed by (Holding Redlich)

MR R.C. KENZIE, QC:   If it please the Court, I appear with my learned friend, MR E.P. WHITE, for the second and third respondents.  (instructed by Ryan Carlisle Thomas)

GUMMOW J:   There is a submitting appearance by the first respondent.

MR HANKS:   Thank you, your Honour. Your Honours know that there are essentially two questions raised in the application for special leave. The first relates to the meaning and effect of section 26A of the Fair Work (Registered Organisations) Act.  In particular, it raises the question whether that section undoes the quashing by order of the Federal Court of the registration of the Australian Principals Federation.  Does it dissolve that order, in effect?  The second question is, assuming that it does that, as indeed the Federal Court found, what are the constitutional consequences of that?  Does that involve, as we put it, an interference with or a usurpation of the judicial power of the Commonwealth?

We have identified what we would describe, your Honours, as some uncontroversial facts against which those questions have to be considered.  The first is that the Industrial Relations Commission, effectively the predecessor of the first respondent, granted registration to the Principals Federation in January 2006.  That was a decision made by that entity.  That was affirmed by the full bench of the Commission in September of the same year. 

Then in July 2008, this is in a matter that was commenced in this Court but remitted to the Federal Court of Australia, the Full Court issued writs of certiorari which quashed not only the decision to register but also the registration itself. Then, section 26A was enacted and the first respondent made a decision that the effect of the enactment of 26A was to reinstate or instate the registration of the Principals Federation, notwithstanding the quashing of that registration by the Full Court of the Federal Court.

HAYNE J:   You say that was wrong as a matter of construction?

MR HANKS:   We say that, your Honour.

HAYNE J:   Why?  How do you grapple with the words “was purportedly registered”, “is taken, for all purposes, to be valid”?

MR HANKS: Yes. Well, your Honour, we have sought to explain in the written submissions that we have here obviously retrospective legislation. The extent to which it is retrospective is a matter of construction. We say that there are two conditions for the operation of section 26A and they are set out in paragraphs (a) and (b). Could I focus immediately on what is said in paragraph (b), your Honour, and that is that the registration but for the enactment of 26A would have been invalid merely because of the absence at any time of what we might describe as a purging rule. I do not think I am doing any injustice to the language to paraphrase it in that way.

GUMMOW J:   How do you work the court order into that?

MR HANKS:   That is the order of certiorari, your Honour.  That is our point, I think, your Honour.  You cannot.  The registration of the Principals Federation at the time of the enactment of 26A could not be said to have been invalid by reason of the absence of the purging rule because the registration had disappeared.  It had been quashed.  It had been brought to an end and we would say brought to an end, ab initio, by the issuing of the writ of certiorari which quashed the registration.  So that at the time of the enactment of 26A the condition that is prescribed by paragraph (b) was not present.  That is our critical, I think - our principal argument on the question of construction, your Honour.

HAYNE J:   So (a) is met, but (b) is not?  Is that the argument?

MR HANKS:   For present purposes, yes, your Honour.  We are focusing on (b) and we say it cannot be met because that condition was not present – could not be present once the writ of certiorari was issued by the Federal Court in 2008.  But if we are wrong on that, I want to say something if I might about the constitutional point, your Honour.  There is no doubt that the order that was made by the Full Court granting the writs of certiorari was an exercise of the judicial power of the Commonwealth.  It settled a controversy between the present applicant and the second respondent in the present proceeding.  It did so by making a final order.

Now, if the Federal Court in the present matter is correct, the enactment of section 26A expunged the quashing. It dissolved the quashing because what the Full Court has done here and what Justice North has done in this present case is to say the first respondent, when he decided that 26A reinstated the registration of the Principals Federation, when he made that decision he made no error.

We say that the enactment of 26A could not have had that effect.  What it did, plainly, was to remove any doubt about other organisations that might be currently purportedly registered as industrial associations under the Act, removed any doubt that arose as a result of the litigation where the Full Court granted certiorari, removed that doubt.  But it did not bring about a change in the legal state of affairs that was the direct result of the orders of the Full Court in issuing certiorari.

HAYNE J:   That is a point of construction, I think.  It is not a point of validity because ‑ ‑ ‑

MR HANKS:   That is so.

HAYNE J:   What, that you get to the point of validity if the Act says the particular organisation in question is taken for all purposes to be validly registered and to have always been validly registered.  That throws up the validity issue.

MR HANKS:   Yes, it does, your Honour, indeed.  I wanted, if I could, just to put on one side what we say the Parliament can do.  It can legislate, obviously, to affect or alter rights in issue in pending litigation.  We have, for example, Nicholas and the BLF Case which identify that as a principle but we say it cannot and, again, we would refer to what was said in the case of Chu Kheng Lim which is cited or quoted in Nicholas, what the Parliament cannot do is to direct a Chapter III court as to the outcome of the exercise of the court’s jurisdiction and, we say, by extension it cannot dissolve the effect of an order made by the court.  You cannot revoke a final order made by the Court.  It cannot deprive that final order of legal effect, whereas ‑ ‑ ‑

HAYNE J:   It has been a fairly common form of legislation for some time, has it not? 

MR HANKS:   No, I think not.  Again, we have to draw a distinction.

HAYNE J:   Where there is criticism, maybe justified, maybe not, about whether Parliament should.

MR HANKS:   Yes.  There is no doubt that, for example, if the court were to declare – a court were to declare that a particular condition was essential for registration, then the Parliament can enact legislation which makes that condition no longer essential for registration, but what the Parliament cannot do is to say, and the order made by the court on such and such a day has no legal effect.

GUMMOW J:   I think there are relatively recent cases on Article 3 in the United States which may turn on a distinction of impeachment of the actual order.

MR HANKS: Yes. That is what we say must be involved here if the first respondent in making his decision, which was then challenged before Justice North and before the Full Court in this case, is correct. If the first respondent was correct that section 26A had the effect of undoing the direct legal effect of the writ of certiorari, then that principle would be raised.

Could I offer some examples to your Honours?  What we say the Parliament cannot do, for example, is legislate to forbid the release of a named person in respect of whom this Court had granted habeas corpus.  It cannot legislate to quash a judgment of this Court requiring the payment of damages and that is not only because of section 51(xxxi) but also because that would be a direct interference with the exercise of judicial power.  You cannot legislate to validate some administrative action which has been found by, let us say, the Federal Court, to be void for jurisdictional error.  That just cannot be done because that is an abrogation or would be an abrogation by the Parliament of the role of an appellate court. 

Could I say something about a point that the Full Court in this case has pressed?  It is in the application book at page 33, your Honours.  Paragraph 31 on page 33 where their Honours said:

Nor, in our view, is there anything about the conditions for valid registration in such a system which makes them unsusceptible to legislative determination.

Their Honours cited some observations in the BLF Case.  Of course, we do not criticise that proposition but it misses a fundamental point about the issues that were presented to the Full Federal Court in the present case.  Although deregistration and its converse, registration, are not, as it was put, uniquely susceptible to judicial determination they can be determined legislatively, but the validity of a decision to register, in our submission, is uniquely susceptible of judicial determination.

Here, in Lawler’s Case the Full Court determined through the issue of the writs of certiorari that the decision to register the Principals Federation was invalid and, therefore, it quashed that decision and that registration.  That distinction, we think, lies at the heart of the constitutional point that we seek to raise.

HAYNE J:   Is the constitutional point that you seek to raise one which would require consideration of a distinction between public law remedies and private law remedies?  Remedies in issue in this case, certiorari to quash, public law remedies obtained at the suit of a party who had standing to obtain it but whose rights, I think, and interests were in play because what?  They had rights or interests to secure membership from the body, et cetera.

MR HANKS:   Let us put it down to the word “competition”, your Honour.

HAYNE J:   Such an ugly word these days, Mr Hanks.  But is the principle one which must somehow accommodate public law remedies differently, or is it a universal proposition?

MR HANKS:   It is a universal proposition, your Honour.  We have a final order form the court which has immediate legal consequences.  It may be that because it is certiorari those consequences are sharp and stark, starker than they might be, certainly starker than they would be in the case of a declaration.  Why are they so stark, because that which is quashed has gone.  That may throw the issue that we seek to present into sharper relief but the general principle, we would say, is one that applies across ‑ ‑ ‑

HAYNE J:   Now, you say that which is quashed is gone.  Again, is it necessary to distinguish between the two aspects of this Act - is, in effect, now deemed to be validly registered - prospective in its operation - and is always deemed to have been the retrospective aspect?

MR HANKS:   That is a very interesting question, your Honour.

HAYNE J:   That is why I asked it, Mr Hanks.

MR HANKS:   I appreciate that your Honours would prefer an answer.  The principle for which we agitate is that both the retrospective and prospective operation would be inconsistent with the quashing without some initiative having been taken by the second respondent to seek registration.

GUMMOW J:   I suppose a declaration of right in a contract dispute between private parties could be subject to legislative activity with respect to the law of contract which could impeach indirectly, I suppose, the declaration.

MR HANKS:   Yes.  As your Honour puts that to me, it is becoming apparent that the unique nature of the remedy which was granted by the Full Court here lies at the heart of the argument that we seek to advance, namely, the certiorari which brought to an end the registration.  For the Parliament then to legislate that the Federation is registered is for the Parliament to revoke or dissolve the effect of that order.

HAYNE J:   But certiorari to quash often goes in circumstances where the decision in question is then simply remade.  Take the ordinary procedural fairness case, certiorari to quash goes.  Do it again, do it properly.

MR HANKS:   There is no dispute, your Honour, that it could be done again and done properly.  There is no dispute about that, that is, that the repository of the power, Fair Work Australia, can make a decision if the circumstances are at the time of the application such as to warrant it, can make an application to register the Federation.  There is no dispute about that.  One of the matters that will be addressed or would be addressed in making such a decision would not be whether there was an absence of a purging rule because that has been removed, not by 26A but by the associated provision enacted at the same time.  That has been removed as an essential condition but, in our submission, what would be required would be an application to Fair Work Australia and a decision.  That is how the legislation is structured.  If your Honours please.

GUMMOW J:   Thank you, Mr Hanks.  Yes, Mr Kenzie.

MR KENZIE:   Yes, thank you, your Honour. Your Honour, if one starts this debate, as my friend has, from the point that section 26A is to be characterised as legislation that disturbs concluded litigation, then one has the sorts of debate that has taken place. If one starts the debate from the point of view that section 26A would not have been satisfied because of the existence of the order of the court, then one gets again into the debate that our friend has had.

That is not what the Federal Court did in relation to this. You will not find in the Federal Court decision any discussion about the intersection of section 26A with the court’s order. The reason for that is because of the way that the court construed section 26A. What the court did, and this is fundamental, is that it identified correctly, correctly, that what section 26A did was to point to the position of an association that was purportedly registered as an organisation under this Act before the commencement of this section, not immediately before the commencement of this section, but at any time before the commencement of this section.

The reasoning of the Federal Court, which is as clear as it can be in this regard, is that they identified that the organisation here, our client, answered the description in section 26A because it was an organisation that was purportedly registered as an organisation under the Act before the commencement of this section and ‑ ‑ ‑

GUMMOW J:   Do you mean at a time before the commencement of the section?

MR KENZIE:   Correct, correct.  And it satisfied (b) because at the time that it was registered and at the time that its name went on to the register, the only – it answered the description of (b) because, but for this section, it would have been invalid merely because at any time the association’s rules did not have the effect of terminating the membership purging rule.

So what the Federal Court did is that it focused correctly on the notion that this was intended to reach back to a time prior to any intervention of the Federal Court and to capture organisations that answered the description at that time.  That included our client as much as any other organisation that was registered at that time. 

The Federal Court then went on to say that that operated regardless of subsequent activity, in other words, regardless of whatever happened to that registration including whatever happened in a court of law.  So what it was doing was changing the law by reaching back into the past and saying whatever has happened, if you answered the description and you were on the register and at a time you were on the register you answered this description because the only vice was a purging rule, you answered the description and at the section applied.

GUMMOW J:   But Mr Hanks then fixes on the last couple of words “and to have always been valid” – “always”.

MR KENZIE:   But, your Honour, again, that does not challenge the order of the court.  It reaches back to an organisation that was registered at that time and reaches back to registration that was effected at that time.

GUMMOW J:   What time?

MR KENZIE:   At the time that it was extant in the registry and before the intervention of the court.  It identifies that if you answered that description your registration would then be valid and be deemed always to have been valid.  That is careless, your Honour, of anything that happened thereafter in the court.  It simply does not – it does not identify the court proceedings.  It has nothing to do with the court proceedings.  It is simply an attempt to reach back and to validate registrations which were in existence and at the time they were in existence had no vice other than the purging.  They failed to satisfy the purging rule.

The Federal Court considered that that construction of the provision was clear and, your Honours, it was clear because the words are wide and broad and they do not give rise to an exception. It is just wrong to characterise section 26A as a provision that is aimed at a court or giving directions to a court. It is not. It reaches back to an earlier point of time and it has an effect in relation to that point of time. It changes the law. So, one does not need to get into a debate about an intersection between this section and the order of the court. Neither did the Federal Court go there.

Now, your Honours, there was no error in the approach that the court took.  The court said that that was the meaning of the statute.  On the text that approach was clear.  Your Honours, this point of statutory construction, now that we are at it, has a cast of one.  In other words, this point of statutory construction by definition involves Mr Hanks’ client and my client.  The point of statutory construction concerns only the question of whether the Principals Federation is the only federation excluded from that definition.  It has absolutely no public interest beyond the interests of the parties to this particular point of statutory construction.  That is it.  Your Honours, that reasoning permeated the Federal Court’s decision in relation to the judicial power point as well because ‑ ‑ ‑

GUMMOW J:   When you say it changed the law, it changed the law upon which the Federal Court was operating?

MR KENZIE:   No, your Honour. For the future, the Federal Court order had come - was there. The following year, the Act was changed. Section 26A was part of a broader set of statutory amendments, a very large set of statutory amendments. They went to the past and the future. As the Federal Court appreciated, there was section 26A which picked up the position of organisations that had purportedly registered in the past and answered this description and there were a lot of them.

It was seen by Parliament that Lawler’s Case which identified my client as not having the requisite purging rule, gave rise to undesirable results because it affected a lot of unions. At the same time as section 26A was enacted, the general legislation was enacted by the introduction of section 171A which is referred to in the Federal Court’s decision and was relied on as demonstrating quite clearly that what Parliament was doing was changing the ground rules in relation to whether the presence or absence of a purging rule, the absence of a purging rule, prejudiced or prohibited your entitlement to participate as an organisation in the federal industrial system.

What section 26A did was it reached back and said, look if you were there in the past but you had this vice only, you are valid, for all purposes from here on forward. Section 171A then said, if there are organisations there that are registered then there will be other statutory mechanisms which are specifically designed to ensure that if you have members ‑ ‑ ‑

GUMMOW J:   It did not say you are deemed hereafter to be valid.

MR KENZIE:   No.

GUMMOW J:   But that is what you just said.

MR KENZIE:   But what I was putting was that it was part of a statutory regime which included the separate provision, section 171A, which was designed to solve that problem into the future and to ensure that existing organisations did not fall foul of the invalidity caused by Lawler because they did not have a purging rule.  So the legislative regime was changed for all.  That is what happened.  That is what the Federal Court appreciated.

That had implications for the Chapter III point as well because once one characterises the legislation properly, not as legislation that is aimed at the order of the court but for what it is, that is a general change in the law in relation to the purging rules, not directed at particular parties, not ad hominem, not having the appearance of being legislation that is directed to litigation or its outcome, general in nature, in relation to a subject matter that is within parliamentary power and dealing, not with a direction to the court, but with the subject matter of the proceedings.

HAYNE J:   Mr Kenzie, in the practical world, what is the interest of your client in maintaining the validity of the end of 26A, that is, what turns on whether the legislative statement that the registration is deemed to have always been valid is itself a valid legislative provision?  What is the real world consequence that we are fighting about?

MR KENZIE:   I am not sure, your Honour.  We never focused on the words “and to have always been valid”.  If the registration that we had was valid, it is valid. 

HAYNE J:   But why does it matter between these parties whether the valid registration dates from the enactment or coming into operation, more accurately, of 26A?

GUMMOW J:   Something happened which you need to be comfortable about.

MR KENZIE:   If we are right ‑ ‑ ‑

HAYNE J:   Let us into the secret.

MR KENZIE:   If we are right, we got registration when we did at the time that we were originally registered and that is deemed to be valid.

HAYNE J:   You can say yes, you are wrong, but what turns on it?  Why does it matter?

MR KENZIE:   Your Honour, in the real world, we got registered as an organisation.  We are entitled to participate under the Fair Work Act as a registered organisation.  If we are wrong, then the several large number of

years that have been taken to actually achieve this status - the litigation goes back years, a decade I think - then everyone starts again. 

In a practical sense, what Mr Hanks is inviting is we turn around and make a fresh application on the basis that we are the only organisation to have been excluded from this general legislative change. We are the only ones who are not embraced by section 26A, not because we are mentioned in there, not because we are singled out in there, but because of some theory that it actually is intended to intrude on an order of the court, which it does not. Now, if we are right about that then there is nothing in the Chapter III point, your Honour. It is not about directions to the court. It has nothing to say about directions to the court, never was intended to.

MR HANKS:   To answer Justice Hayne’s question, if we are correct, then the second respondent, the Federation, must make an application if it wishes to obtain registration ‑ ‑ ‑

HAYNE J:   No, the question I am asking is what happens if you sever ‑ ‑ ‑

MR HANKS:   That was a different question, your Honour.

HAYNE J:   That is, if deemed now to be valid, that is at the time of enactment, but you cut out the “deemed always to have been”, why does that matter?

MR HANKS:   Because that, your Honour, does dissolve the effect, the immediate legal effect of the writ of certiorari.  It does.  That is our argument and it has a practical consequence.

GUMMOW J:   What is the practical consequence?

MR HANKS:   The practical consequence is that the second respondent, if it wishes to obtain registration, would need to apply ‑ ‑ ‑

HAYNE J:   No.  I am not making myself plain, Mr Hanks.  My question is, if the Act is validly saying it is now registered, deemed now to be registered, but is saying invalidly that it is deemed in the past to have been registered, what practical value is there to you in obtaining a declaration or result that says that the past validation was bad?

MR HANKS:   Very little, your Honour, very little.  But that is not what we seek.  We are not limiting our attack to those final words.

HAYNE J:   I understand that.

MR HANKS:   We are focusing – your Honour understands how we put our case and I had thought that your Honour asked our friend whether there was some practical real world consequence that the parties were agitated by ‑ ‑ ‑

HAYNE J:   I know what – I can understand that, Mr Hanks, but ‑ ‑ ‑

MR HANKS:   It may be, your Honour, that when the second respondent now applies for registration, it will be successful or it may not be successful.  That will depend upon an assessment of whether it meets the current rules according to its current operations.  Your Honours, I believe your Honours understand that essentially on the question of construction ‑ ‑ ‑

GUMMOW J:   Just pardon us a minute.  Yes, Mr Hanks.

MR HANKS:   Thank you, your Honours.  What we say is missing from 26A is a clearly expressed intention, not merely that it operate retrospectively, in a general sense, but that it operate so as to change the rights and obligations which were already determined by the grant of the writ of certiorari.  On the constitutional point, your Honours understand that our concern is that this legislation, if the Full Court is correct, operates to dissolve the final judgment in Lawler and the writs of certiorari.  Thank you, your Honours.

GUMMOW J:   Mr Hanks, we are minded to refer this application for further consideration by a Full Court.  To that end, I think you need to give 78B notices if that has not already been done.

MR HANKS:   We have already, your Honour, perhaps out of an abundance of extraordinary caution, given 78B notices.  We will give further notices.

GUMMOW J:   I think in preparing your written submissions for the Full Court you, no doubt, will take into account some of the sophistications that have emerged in discussions with the Bench this morning.

MR HANKS:   Certainly.  I did hear your Honour refer to some recent United States authorities and we will, no doubt, think about those as well.  But the particular issues that Justice Hayne and your Honour have raised, we will address those as far as we can.

HAYNE J:   Speaking only for myself, if your arguments were arguments that would lead to partial invalidity, a question relevant to leave would be ‑ ‑ ‑

MR HANKS:   What consequence flows.

HAYNE J:   Yes.

GUMMOW J:   From a possible severance.

MR HANKS:   Yes, your Honour.

GUMMOW J:   We refer this application in for hearing by a Full Court and list it as a one‑day case, I would think.

MR HANKS:   Yes, your Honour, I am sure that will be adequate.

AT 10.36 AM THE MATTER WAS CONCLUDED