Australian Securities and Investments Commission v Edensor Nominees Pty Ltd
[2001] HCA 1
•8 February 2001
HIGH COURT OF AUSTRALIA
GLEESON CJ,
GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJMatter No M20/2000
AUSTRALIAN SECURITIES AND
INVESTMENTS COMMISSION APPLICANTAND
EDENSOR NOMINEES PTY LTD & ORS RESPONDENTS
Australian Securities and Investments Commission v Edensor Nominees Pty Ltd
[2001] HCA 1
Date of Order: 30 August 2000
Date of Publication of Reasons: 8 February 2001
M20/2000ORDER
1. Special leave to appeal granted, and appeal treated as instituted and
heard instanter and allowed.2. Set aside paragraphs 1 and 2 of the declarations made by the
Full Court of the Federal Court of Australia on 9 March 2000.3. Remit the matter to the Full Court of the Federal Court of Australia
for further hearing and determination.4. The respondents to pay the appellant's costs.
On appeal from the Federal Court of Australia
Representation:
D F Jackson QC with S D Rares SC and R D Strong for the applicant (instructed by Australian Securities and Investments Commission)
P R Hayes QC with I D Martindale for the first respondent (instructed by Clayton Utz)N J Young QC with M C Garner and D J Batt for the second to seventh respondents (instructed by Freehills)
Interveners:
D M J Bennett QC, Solicitor-General of the Commonwealth with M A Perry and J S Stellios intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor)
D Graham QC, Solicitor-General for the State of Victoria with S G E McLeish intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor)
R J Meadows QC, Solicitor-General for the State of Western Australia with R M Mitchell intervening on behalf of the Attorney-General for the State of Western Australia (instructed by Crown Solicitor for Western Australia)
B M Selway QC, Solicitor-General for the State of South Australia with R F Gray intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor for South Australia)
M G Sexton SC, Solicitor-General for the State of New South Wales with M J Leeming intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor for New South Wales)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
HIGH COURT OF AUSTRALIA
GLEESON CJ,
GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJMatter No M23/2000
EDENSOR NOMINEES PTY LTD APPLICANT
AND
AUSTRALIAN SECURITIES AND
INVESTMENTS COMMISSION & ORS RESPONDENTSEdensor Nominees Pty Ltd v Australian Securities and Investments Commission
Date of Order: 30 August 2000
Date of Publication of Reasons: 8 February 2001
M23/2000ORDER
Application dismissed.
On appeal from the Federal Court of Australia
Representation:
P R Hayes QC with I D Martindale for the applicant (instructed by Clayton Utz)
S D Rares SC with R D Strong for the first respondent (instructed by Australian Securities and Investments Commission)
N J Young QC with M C Garner and D J Batt for the second to seventh respondents (instructed by Freehills)
Interveners:
D M J Bennett QC, Solicitor-General of the Commonwealth with M A Perry and J S Stellios intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor)
D Graham QC, Solicitor-General for the State of Victoria with S G E McLeish intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor)
R J Meadows QC, Solicitor-General for the State of Western Australia with R M Mitchell intervening on behalf of the Attorney-General for the State of Western Australia (instructed by Crown Solicitor for Western Australia)
B M Selway QC, Solicitor-General for the State of South Australia with R F Gray intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor for South Australia)
M G Sexton SC, Solicitor-General for the State of New South Wales with M J Leeming intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor for New South Wales)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
HIGH COURT OF AUSTRALIA
GLEESON CJ,
GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJMatter No M24/2000
YANDAL GOLD PTY LTD & ORS APPLICANTS
AND
AUSTRALIAN SECURITIES AND
INVESTMENTS COMMISSION & ORS RESPONDENTSYandal Gold Pty Ltd v Australian Securities and Investments Commission
Date of Order: 30 August 2000
Date of Publication of Reasons: 8 February 2001
M24/2000ORDER
Application dismissed.
On appeal from the Federal Court of Australia
Representation:
N J Young QC with M C Garner and D J Batt for the applicants (instructed by Freehills)
S D Rares SC with R D Strong for the first respondent (instructed by Australian Securities and Investments Commission)
P R Hayes QC with I D Martindale for the second respondent (instructed by Clayton Utz)
Interveners:
D M J Bennett QC, Solicitor-General of the Commonwealth with M A Perry and J S Stellios intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor)
D Graham QC, Solicitor-General for the State of Victoria with S G E McLeish intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor)
R J Meadows QC, Solicitor-General for the State of Western Australia with R M Mitchell intervening on behalf of the Attorney-General for the State of Western Australia (instructed by Crown Solicitor for Western Australia)
B M Selway QC, Solicitor-General for the State of South Australia with R F Gray intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor for South Australia)
M G Sexton SC, Solicitor-General for the State of New South Wales with M J Leeming intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor for New South Wales)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
HIGH COURT OF AUSTRALIA
GLEESON CJ,
GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJMatter No M35/2000
RE EDENSOR NOMINEES PTY LTD & ORS RESPONDENTS
EX PARTE AUSTRALIAN SECURITIES AND
INVESTMENTS COMMISSION
APPLICANT/PROSECUTORRe Edensor Nominees Pty Ltd; Ex parte Australian Securities and Investments Commission
Date of Order: 30 August 2000
Date of Publication of Reasons: 8 February 2001
M35/2000ORDER
Application dismissed.
Representation:
No appearance for the first and second respondents
P R Hayes QC with I D Martindale for the third respondent (instructed by Clayton Utz)
N J Young QC with M C Garner and D J Batt for the fourth respondent (instructed by Freehills)
D F Jackson QC with S D Rares SC and R D Strong for the applicant/prosecutor (instructed by Australian Securities and Investments Commission)
Interveners:
D M J Bennett QC, Solicitor-General of the Commonwealth with M A Perry and J S Stellios intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor)
D Graham QC, Solicitor-General for the State of Victoria with S G E McLeish intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor)
R J Meadows QC, Solicitor-General for the State of Western Australia with R M Mitchell intervening on behalf of the Attorney-General for the State of Western Australia (instructed by Crown Solicitor for Western Australia)
B M Selway QC, Solicitor-General for the State of South Australia with R F Gray intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor for South Australia)
M G Sexton SC, Solicitor-General for the State of New South Wales with M J Leeming intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor for New South Wales)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
HIGH COURT OF AUSTRALIA
GLEESON CJ,
GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJMatter No M38/2000
RE AUSTRALIAN SECURITIES AND
INVESTMENTS COMMISSION & ORS RESPONDENTSEX PARTE EDENSOR NOMINEES PTY LTD
APPLICANT/PROSECUTORRe Australian Securities and Investments Commission; Ex parte Edensor Nominees Pty Ltd
Date of Order: 30 August 2000
Date of Publication of Reasons: 8 February 2001
M38/2000ORDER
Application dismissed.
Representation:
No appearance for the first respondent
S D Rares SC with R D Strong for the second respondent (instructed by Australian Securities and Investments Commission)
N J Young QC with M C Garner and D J Batt for the third respondent (instructed by Freehills)
P R Hayes QC with I D Martindale for the applicant/prosecutor (instructed by Clayton Utz)
Interveners:
D M J Bennett QC, Solicitor-General of the Commonwealth with M A Perry and J S Stellios intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor)
D Graham QC, Solicitor-General for the State of Victoria with S G E McLeish intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor)
R J Meadows QC, Solicitor-General for the State of Western Australia with R M Mitchell intervening on behalf of the Attorney-General for the State of Western Australia (instructed by Crown Solicitor for Western Australia)
B M Selway QC, Solicitor-General for the State of South Australia with R F Gray intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor for South Australia)
M G Sexton SC, Solicitor-General for the State of New South Wales with M J Leeming intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor for New South Wales)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
HIGH COURT OF AUSTRALIA
GLEESON CJ,
GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJMatter No M39/2000
RE AUSTRALIAN SECURITIES AND
INVESTMENTS COMMISSION & ORS RESPONDENTSEX PARTE YANDAL GOLD PTY LTD & ORS
APPLICANTS/PROSECUTORSRe Australian Securities and Investments Commission; Ex parte Yandal Gold
Pty Ltd
Date of Order: 30 August 2000
Date of Publication of Reasons: 8 February 2001
M39/2000ORDER
Application dismissed.
Representation:
No appearance for the first respondent
S D Rares SC with R D Strong for the second respondent (instructed by Australian Securities and Investments Commission)
P R Hayes QC with I D Martindale for the third respondent (instructed by Clayton Utz)
N J Young QC with M C Garner and D J Batt for the applicants/prosecutors (instructed by Freehills)
Interveners:
D M J Bennett QC, Solicitor-General of the Commonwealth with M A Perry and J S Stellios intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor)
D Graham QC, Solicitor-General for the State of Victoria with S G E McLeish intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor)
R J Meadows QC, Solicitor-General for the State of Western Australia with R M Mitchell intervening on behalf of the Attorney-General for the State of Western Australia (instructed by Crown Solicitor for Western Australia)
B M Selway QC, Solicitor-General for the State of South Australia with R F Gray intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor for South Australia)
M G Sexton SC, Solicitor-General for the State of New South Wales with M J Leeming intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor for New South Wales)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Australian Securities and Investments Commission v Edensor Nominees Pty Ltd
Courts and judges – Federal courts – Jurisdiction – Whether Federal Court exercising federal or State jurisdiction – Whether Federal Court had power to make orders pursuant to the Corporations Law of a State – Whether Australian Securities and Investments Commission "the Commonwealth" – Whether remedies sought were "an injunction or declaration".
Constitutional law (Cth) – Courts – Jurisdiction – Whether Federal Court exercising federal or State jurisdiction – Whether Australian Securities and Investments Commission "the Commonwealth".
Words and phrases – "jurisdiction" – "power" – "State jurisdiction" – "federal jurisdiction" – "accrued jurisdiction" – "the Commonwealth" – "an injunction or declaration".
Constitution, s 75(iii).
Australian Securities and Investments Commission Act 1989 (Cth).
Corporations Act 1989 (Cth), ss 49(1)(d), 56(2), 58AA.
Judiciary Act 1903 (Cth), ss 39B(1A)(a), 79, 80.
Corporations Law, ss 737, 739.
Corporations (Victoria) Act 1990 (Vic).GLEESON CJ, GAUDRON AND GUMMOW JJ.
Introduction
The ultimate question in the proceedings in this Court is whether the Full Court of the Federal Court erred in holding that a judge of that Court had acted beyond its jurisdiction or powers in making certain orders in litigation arising from a company takeover bid. However, at the heart of the controversy lie basic principles of the Australian federal constitutional structure and the exercise of the authority of the judicial branch of government.
It is convenient to begin with the word "jurisdiction". This is a "generic term"[1] generally signifying authority to adjudicate. It is used in various senses. The jurisdiction of a court to hear and determine a personal action and to grant relief may depend upon no more than effective service of that court's process upon the defendant within the territorial bounds of its competence or pursuant to the exercise of a "long‑arm" jurisdiction; or it may depend also upon the proceeding being with respect to a particular subject-matter[2].
[1]Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR (Pt 2) 1087 at 1142.
[2]Flaherty v Girgis (1987) 162 CLR 574 at 598; John Pfeiffer Pty Ltd v Rogerson (2000) 74 ALJR 1109 at 1112 [13]-[14]; 172 ALR 625 at 630.
The classification between State and federal jurisdiction is a consequence of the nature of Australian federalism; it assumes the existence of the criteria outlined above but supplements or displaces them. State jurisdiction may be described as "the authority which State Courts possess to adjudicate under the State Constitution and laws"[3]. Federal jurisdiction is "the authority to adjudicate derived from the Commonwealth Constitution and laws"[4] and, as will appear, it is attracted in some instances by subject-matter and in others by identity of parties or the nature of the relief sought.
[3]Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR (Pt 2) 1087 at 1142.
[4]Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR (Pt 2) 1087 at 1142.
The distinction between State and federal jurisdiction directs attention to considerations which underlie the issues for determination in these proceedings. The structure of the Constitution reflects notions of responsible and representative government as understood by the framers through experience of colonial self‑government. However, the institutions of federalism perceived from study of the United States Constitution suggested a vertical division of legislative, executive and judicial power across all three arms of government. Hence the distinction between federal and State jurisdiction, constitutional concepts with no immediate counterpart in the treatment by the common law of the term "jurisdiction".
This division between courts and jurisdictions may not be essential for a system of government properly to be identified as "federal" in nature. Sir Owen Dixon said that, while the framing of the Australian Constitution in this respect had been influenced by the plan of the United States Constitution, it was "not easy to see why the entire system of superior Courts should not have been organized and erected under the Constitution to administer the total content of the law"[5].
[5]Dixon, "The Law and the Constitution", (1935) 51 Law Quarterly Review 590 at 607.
The federal division of the judicial function as adopted in Australia differed from that in the United States in two significant respects. First, s 73 placed this Court in the position to develop the common law for Australia[6] and, secondly, s 77(iii) expressly empowered the Parliament to confer on State courts the federal jurisdiction laid out in ss 75 and 76.
[6]John Pfeiffer Pty Ltd v Rogerson (2000) 74 ALJR 1109 at 1122‑1123 [66]-[75], 1135 [142]; 172 ALR 625 at 643‑645, 662.
That latter aspect is important for these proceedings. A State court receives State jurisdiction under the constitution and laws of that State. It may also be invested with federal jurisdiction by a law made by the Parliament under s 77(iii) of the Constitution; s 39(2) of the Judiciary Act 1903 (Cth) ("the Judiciary Act") is an example of such a law. The federal courts established by the Parliament, the Federal Court of Australia, the Family Court of Australia and the Federal Magistrates Court[7], exercise their jurisdiction, necessarily federal, by reason of its conferral by laws enacted under s 77(i) of the Constitution. A "matter" in respect of which that jurisdiction is conferred may, in a given case, include claims arising under common law or under the statute law of a State. But the jurisdiction invoked remains, in respect of all of the claims made in the matter, "wholly" federal; even in a State court "there is no room for the exercise of a State jurisdiction which apart from any operation of the Judiciary Act the State court would have had" and "there is no State jurisdiction capable of concurrent exercise with the federal jurisdiction invested in the State court". These terms were used by Barwick CJ in Felton v Mulligan[8].
[7]Created by s 8 of the Federal Magistrates Act 1999 (Cth).
[8](1971) 124 CLR 367 at 373‑374.
Further, State jurisdiction may not be conferred upon a federal court as an exercise of State legislative power and the federal legislative power is limited by the content of Ch III of the Constitution. That is what follows from Re Wakim; Ex parte McNally[9]. While the Constitution expressly enables the conferral of federal jurisdiction on State Courts, the converse does not apply.
[9](1999) 198 CLR 511.
In the present proceedings, whilst recognising that the Federal Court was seised of federal jurisdiction, the Full Court of the Federal Court denied the competency of orders made to resolve claims under State law which were elements of the controversy. The errors this involved, including the nature of "accrued" jurisdiction and confusion between notions of "jurisdiction" and "power", are explained in what follows in these reasons.
The Full Court misconceived the significance, for the dispute before it, of Re Wakim. The decision of this Court in that litigation, in one of its branches[10], affirmed and applied the authorities respecting the inclusion of non‑federal claims in some "matters" within federal jurisdiction. With the significance of Re Wakim for the conferral of State jurisdiction on federal courts, the present litigation in the Federal Court was not concerned.
[10](1999) 198 CLR 511 at 546 [25], 563‑564 [72]-[78], 582‑588 [129]-[150].
This litigation, unlike Re Wakim and other recent decisions[11], does not immediately involve the operation and validity of "co‑operative" legislative schemes. Here, the consequence of the decision of the Full Court would be that no court, State or federal, would be competent in the exercise of federal jurisdiction to administer remedies such as those sought and obtained at first instance in the Federal Court. Even if the "co‑operative" legislation at stake in Re Wakim had been upheld, the result here would be no different; by definition, the "co‑operative scheme" considered in Re Wakim was concerned with the exercise of State not federal jurisdiction[12].
[11]Byrnes v The Queen (1999) 73 ALJR 1292; 164 ALR 520; Bond v The Queen (2000) 74 ALJR 597; 169 ALR 607; R v Hughes (2000) 74 ALJR 802; 171 ALR 155.
[12]It also was decided in the Re Wakim litigation (in particular, in Spinks v Prentice) that, applying Northern Territory v GPAO (1999) 196 CLR 553, a "matter arising under" a law supported by s 122 of the Constitution attracts a conferral of federal jurisdiction under s 76(ii) of the Constitution.
The significance of the decision in Re Wakim appears from the following statement[13]:
"Australia is a federation of a dualist kind, consistently with the common law tradition. While some provisions in the Constitution provide for co‑operation, they do not fundamentally alter its dualist character; indeed, if anything, they reinforce it. The nature of the Australian constitutional system needs to be borne in mind in designing co‑operative procedures. The issues at stake essentially are questions of principle."
[13]Saunders, "Administrative Law and Relations Between Governments: Australia and Europe Compared", (2000) 28 Federal Law Review 263 at 290.
The litigation in the Federal Court
On 25 March 1999, Yandal Gold Pty Ltd ("Yandal Gold") declared unconditional the takeover offers and contracts arising from the acceptance of offers which had been made for all of the shares on issue in a listed company, Great Central Mines Ltd ("Great Central"). It appears that Great Central was a company incorporated or taken to be incorporated under the Corporations Law of Victoria ("the Corporations Law" or "the Corporations Law of Victoria"). That expression identifies the Corporations Law which is set out in s 82 of the Corporations Act 1989 (Cth) ("the Commonwealth Act") and which s 7 of the Corporations (Victoria) Act 1990 (Vic) ("the Victorian Corporations Act") applies as the Corporations Law of Victoria.
The offer and Pt A Statement had been served by Yandal Gold on Great Central on 12 January 1999. At that time, Yandal Gold had a "relevant interest" in 40.37 per cent of the shares in Great Central[14]. Yandal Gold was a wholly owned subsidiary of Yandal Gold Holdings Pty Ltd ("Yandal Holdings"). Edensor Nominees Pty Ltd ("Edensor") held, as trustee for a discretionary trust for the benefit of the Gutnick family, 50.1 per cent of the shares in Yandal Holdings. The balance of the shareholding in Yandal Holdings was held by Normandy Consolidated Gold Holdings Pty Ltd ("Normandy Consolidated"). This was a member of the Normandy Group, the ultimate holding company of which was a listed company, Normandy Mining Ltd ("Normandy").
[14]The term "relevant interest" is defined and explained in Div 5 (ss 30‑45) of Pt 1.2 of Ch 1 of the Corporations Law. It is unnecessary for present purposes to pursue the text of this definition. Division 5 of Pt 1.2 of Ch 1 was repealed by Item 309 of Pt 9 of Sched 3 of the Corporate Law Economic Reform Program Act 1999 (Cth) ("the CLERP Act") with effect from 13 March 2000. Notwithstanding this repeal, the present tense will continue to be used in this judgment in respect of these sections.
When the offer and Pt A Statement were served, Edensor held 12.56 per cent of the shares in Great Central and a member of the Normandy Group, Normandy Mining Holdings Pty Ltd ("Normandy Holdings"), held 27.81 per cent of the shares in Great Central. The "relevant interest" in 40.37 per cent of the shares in Great Central held by Yandal Gold reflected those two percentages held by the other companies, and the operation of a Shareholders Agreement which had been made on 11 January 1999. The parties to that instrument included Edensor, Yandal Gold and Normandy Holdings, and it contained provisions relating to the bid then proposed to be made by Yandal Gold.
On 21 April 1999, the day after the closure of the takeover offers, Yandal Gold became "entitled" to 94.37 per cent of the shares in Great Central, including the 40.37 per cent referred to above. Thereafter, Yandal Gold was entitled to utilise the compulsory acquisition provisions of Div 6 (ss 701‑703) of Pt 6.5 of Ch 6 of the Corporations Law.
Section 615 is found in Pt 6.2 of Ch 6 of the Corporations Law[15]. Chapter 6 is headed "Acquisition of Shares" and Pt 6.2 "Control of Acquisition of Shares". Part 6.10 (ss 737‑744) is headed "Powers of Court". Sections 737 and 739 authorise the making of certain curial orders where provisions of Ch 6, including s 615, have been contravened. In each case the application for relief may, by express provision, be made by the Australian Securities and Investments Commission ("ASIC").
[15]Chapter 6 was repealed by Item 5 of Sched 1 of the CLERP Act with effect from 13 March 2000. The present tense will also be used in respect of these sections.
Sub‑section (4) of s 615 states:
"A person shall not offer to acquire, or issue an invitation in relation to, shares in a company if the person is prohibited by subsection (1) from acquiring those shares."
Sub‑section (1) of s 615 states that, except as provided by Ch 6 of the Corporations Law:
"[A] person shall not acquire shares in a company if:
(a)any person who:
(i)is not entitled to any voting shares in the company; or
(ii)is entitled to less than the prescribed percentage of the voting shares in the company;
would, immediately after the acquisition, be entitled to more than the prescribed percentage of the voting shares in the company; or
(b)any person who is entitled to not less than the prescribed percentage, but less than 90 per cent, of the voting shares in the company would, immediately after the acquisition, be entitled to a greater percentage of the voting shares in the company than immediately before the acquisition." (emphasis added)
The term "prescribed percentage" means 20 per cent or such a lesser percentage as is prescribed by regulation (s 615(7)).
It followed from the definition of "company" in s 9 of the Corporations Law, as interpreted by s 9 of the Victorian Corporations Act[16], that the prohibitions imposed by s 615 of the Corporations Law applied in respect of the takeover offers for shares in Great Central. ASIC formed the view that as a result of the Shareholders Agreement there had been contraventions of the prohibitions imposed by s 615. The Shareholders Agreement had been made on 11 January 1999, the day before Yandal Gold had served its offer and Pt A Statement.
[16]The effect of s 9 is that the expression "this jurisdiction" in the definition of "company" in the Corporations Law means "Victoria".
ASIC contended that, by entering into the Shareholders Agreement, Yandal Gold, Normandy Holdings and Edensor each became respectively entitled to the relevant interest in the shares in Great Central held by Edensor and Normandy Holdings and that, in each case, there was an "acquisition" of that deemed relevant interest which contravened the prohibition in s 615. The relevant interest said to be acquired in respect of Yandal Gold was in 40.37 per cent of the shares in Great Central, being the shares held by Normandy Holdings and Edensor; in respect of Edensor in an additional 27.81 per cent of the shares in Great Central, being the shares held by Normandy Holdings; and in respect of Normandy Holdings, in an additional 12.56 per cent of the shares in Great Central, being the shares held by Edensor.
On 25 March 1999, ASIC instituted a proceeding in the Federal Court, Victoria District Registry. ASIC sought declaratory, injunctive and other relief. By amendment, ASIC later claimed that the parties to the Shareholders Agreement had had informal arrangements that Edensor and Normandy Holdings would not accept the takeover offers and would retain their shares for the purposes of the bid by Yandal Gold. This would enable Yandal Gold to reach the 90 per cent acceptance threshold which would entitle it to use the compulsory acquisition provisions of the Corporations Law to acquire the remaining shares in Great Central. ASIC alleged that this involved a second species of contravention of s 615.
ASIC also claimed in the Federal Court proceeding that Yandal Gold, in despatching the takeover offers, had engaged in conduct in trade and commerce that was misleading and deceptive. This was said to be in contravention of s 52 of the Trade Practices Act 1974 (Cth) ("the Trade Practices Act") or, alternatively, s 12DA of the Australian Securities and Investments Commission Act 1989 (Cth) ("the ASIC Act") and s 995(2)(b) of the Corporations Law[17]. Section 12DA of the ASIC Act forbids engagement by corporations in conduct in relation to "financial services" that is misleading or deceptive. The remedies which may be sought by ASIC in respect of contravention of s 12DA of the ASIC Act include the injunctive remedies provided by s 12GD. With effect from 1 July 1998, s 52 of the Trade Practices Act has not applied to "conduct engaged in in relation to financial services"[18]. There is a debate, which it will be unnecessary for this Court to resolve at this stage, as to which of these regimes applied. It turns upon the meaning to be given to the legislative definition of "financial services".
[17]Chapter 7 of the Corporations Law is headed "Securities" and s 995 forbids engagement in conduct in or in connection with dealings in securities which is misleading or deceptive.
[18]Trade Practices Act, s 51AF(2)(a); see Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 74 ALJR 604 at 615 [61]; 169 ALR 616 at 631.
The trial judge (Merkel J) delivered his reasons for judgment on 16 June 1999[19]. He found that there was no dispute that, by reason of the Shareholders Agreement, Edensor, Normandy Holdings, Yandal Holdings and Yandal Gold were deemed to have relevant interests, which each increased to 40.37 per cent, in shares in Great Central and that the relevant interests had increased to 40.37 per cent in a manner not provided for in Ch 6. His Honour said that the issue was whether the increased relevant interests were "acquired" in contravention of s 615[20]. His Honour held that there had been acquisitions in the necessary sense with the result that there had been contraventions of s 615[21].
[19]Australian Securities and Investments Commission v Yandal Gold Pty Ltd (1999) 32 ACSR 317; 17 ACLC 1,126.
[20](1999) 32 ACSR 317 at 338; 17 ACLC 1,126 at 1,148.
[21](1999) 32 ACSR 317 at 342; 17 ACLC 1,126 at 1,151.
Merkel J also found that ASIC had established its case with respect to the informal arrangements[22]. Pursuant to those arrangements, each of Yandal Gold, Normandy Holdings and Edensor had acquired a relevant interest in shares of Great Central, in contravention of s 615[23]. The result was that the primary judge upheld ASIC's case as to contravention of s 615 on the two bases it had alleged.
[22](1999) 32 ACSR 317 at 332‑334; 17 ACLC 1,126 at 1,143.
[23](1999) 32 ACSR 317 at 335; 17 ACLC 1,126 at 1,146.
His Honour indicated that he was satisfied that, in the exercise of its federal jurisdiction, in particular its "accrued" jurisdiction, the Federal Court had "jurisdiction to grant all of the relief sought by ASIC in the present matter"[24].
[24](1999) 32 ACSR 317 at 344; 17 ACLC 1,126 at 1,153.
Merkel J made various orders and declarations[25]. These included a declaration of contravention of s 615 by entry into the Shareholders Agreement (order 1) and a declaration of contravention of s 615 by Yandal Gold, Edensor and Normandy Holdings by reason of their entry into the informal arrangements (order 2). Order 7 thereof was in the following form:
"Within 21 days, or such further period as the Court may within 21 days order, [Edensor] pay to [ASIC] the sum of $28.5 million for payment of that sum by [ASIC], on a pro rata basis, to the shareholders in [Great Central] (other than the respondents):
(a)who have accepted the said takeover offers of [Yandal Gold] and have not exercised their entitlement under these orders to withdraw that acceptance;
(b)who have had their shares acquired by [Yandal Gold] under s 703(2) of the Corporations Law and have not avoided the acquisition pursuant to these orders;
(c)who have had their shares compulsorily acquired under s 701(5) and have not avoided the acquisition pursuant to these orders."
His Honour described this as an order requiring Edensor to disgorge to shareholders deprived of receiving a higher offer at the time of the bid the value of the benefit Edensor received for its contravening conduct; the order was "just" under s 737 and protective of the interests of shareholders under s 739[26].
[25](1999) 32 ACSR 317 at 358‑362; 17 ACLC 1,126 at 1,163‑1,167.
[26](1999) 32 ACSR 317 at 354‑355; 17 ACLC 1,126 at 1,161.
The Full Court of the Federal Court
An appeal against these orders was taken by Edensor to the Full Court of the Federal Court. In the meantime, on 17 June 1999, this Court had delivered its judgment in Re Wakim. Grounds 1, 2 and 3 of the Supplementary Notice of Appeal by Edensor (dated 24 August 1999) challenge the jurisdiction of the Federal Court to make the orders, including order 7, under the Corporations Law of Victoria. Other grounds attack the merits of the decision which had been adverse to Edensor.
After a hearing on 31 August and 1 September 1999, the Full Court (Hill, Sundberg and Mansfield JJ)[27] delivered reasons for judgment in which it dealt with what it described[28] as a "preliminary point" which had arisen as a result of the decision in Re Wakim. Their Honours expressed their understanding of the holding in Re Wakim and its bearing on the "preliminary point" as follows[29]:
"In that case, and the related cases which were heard with it, it was held that the Corporations Law was void to the extent that it was an Act of a State Parliament which purported to confer upon the Federal Court of Australia jurisdiction to entertain applications brought under it. The States of the Commonwealth could not confer jurisdiction upon a federal court where that jurisdiction was not provided for in ss 75, 76 and 77 of the Constitution. In consequence it was submitted that to the extent that the orders and declarations were made by the primary judge under the Corporations Law, he had no power to make them."
[27]Edensor Nominees Pty Ltd v Australian Securities and Investments Commission (1999) 95 FCR 42.
[28](1999) 95 FCR 42 at 46.
[29](1999) 95 FCR 42 at 46.
The Full Court went on to agree with Merkel J that "there was a common substratum of fact which conferred on the Court jurisdiction to decide the whole 'matter', the whole controversy between the parties"[30]. This would suggest acceptance by the Full Court that it was federal not State jurisdiction that was exercised; if that were so (and as will appear it was the case), Re Wakim has no immediate relevance. Their Honours went on to consider whether "the Court was not empowered to grant the relief sought under the Corporations Law"[31].
[30](1999) 95 FCR 42 at 48.
[31](1999) 95 FCR 42 at 48.
After reference to Smith v Smith[32] and other authorities, the Full Court concluded its reasons by stating that the appeal must be allowed and that the parties should file written submissions as to any further orders that should be made.
[32](1986) 161 CLR 217.
Thereafter, on 9 March 2000, after the Court had considered further oral and written submissions, the Full Court made orders and gave reasons for those orders. Their Honours said:
"The focus has largely been upon whether the Court should now order that the $28.5 million to be paid to ASIC pursuant to the orders of the learned trial judge (and in fact paid into Court pending the hearing and determination of the appeal) be repaid to Edensor."
In the interval between the delivery of reasons on 10 December 1999 and the reasons of 9 March 2000, the Federal Courts (State Jurisdiction) Act 1999 (Vic) ("the State Jurisdiction Act") had come into force. One of the issues considered in the later reasons was whether order 7 of the orders made by Merkel J was an "ineffective judgment" of a federal court in a State matter, within the meaning of the definition in s 4 of the State Jurisdiction Act. This presented the question whether the orders made by Merkel J had been made in a "State matter", ie one in respect of which a State law had purported to confer jurisdiction on the Federal Court. Their Honours answered that question in the affirmative so that the State Jurisdiction Act was engaged. Given the conclusions which had been reached by the Full Court in its reasons of 10 December, ASIC had sought to salvage its position by maintaining that order 7 was such an "ineffective judgment". The Full Court decided not to accede to the application by Edensor and related parties that the Full Court direct the $28.5 million be repaid to Edensor. Rather, their Honours said:
"That is now properly a matter for the Supreme Court of Victoria."
They added that there remained for consideration "the further conduct of this appeal". The Full Court then made other orders and declarations. There has been debate as to the nature and effect of what was done, making it convenient to set out the text in full:
"THE COURT DECLARES THAT:
1.Order 7 of the orders of the Court on 16 June 1999 is invalid for want of jurisdiction.
2.The Federal Court of Australia had no jurisdiction to hear and determine the proceedings brought by [ASIC] against [Yandal Gold], [Yandal Holdings], [Edensor], [Normandy], Normandy Mining Finance Ltd, Normandy Consolidated Gold Holdings Pty Ltd and [Normandy Holdings] under the Corporations Law.
THE COURT FURTHER ORDERS THAT:
Upon [ASIC] by its counsel undertaking to the Court that it will with all reasonable expedition:
(a)make and prosecute an application to the High Court of Australia for special leave to appeal against the above declarations;
(b)if special leave is granted to file and prosecute such an appeal,
this appeal be stood over until a date to be fixed following the hearing and determination of that application and, if the application is granted, that appeal."
The proceedings in this Court
ASIC sought from this Court special leave to appeal and full argument was heard on that application. In essence, ASIC submitted that the Full Court had erred in deciding both that order 7 of the orders made by Merkel J was invalid for want of jurisdiction and that the Federal Court had had no jurisdiction to hear and determine the proceeding brought by ASIC. In particular, ASIC relied upon the conferral of jurisdiction upon the Federal Court by s 39B(1A)(a) of the Judiciary Act. Section 39B(1A) relevantly provides:
"The original jurisdiction of the Federal Court of Australia also includes jurisdiction in any matter:
(a)in which the Commonwealth is seeking an injunction or a declaration".
ASIC referred to the declaratory and injunctive relief sought by it in the proceeding heard by Merkel J and submitted that ASIC was "the Commonwealth" within the meaning of this provision. It was said to follow that, independently of any ineffective conferral of jurisdiction under State law, (an issue determined by Re Wakim), the Federal Court had been exercising federal jurisdiction in respect of a matter comprising the proceeding in question. It followed that there had been no "ineffective judgment" (the expression used in the State Jurisdiction Act) and no occasion for the operation of that statute to provide a remedy involving further conduct of the litigation in the Supreme Court of Victoria.
At the conclusion of the hearing on 30 August 2000, this Court announced its opinion that the two declarations made by the Full Court respecting the lack of jurisdiction over the proceeding in that Court should be set aside and that the Full Court should now hear and determine the appeal by Edensor on the merits of the appeal. The merits lay in the matters raised by grounds 5‑10 of Edensor's Supplementary Notice of Appeal to the Full Court, dated 24 August 1999.
Accordingly, this Court ordered that special leave to appeal be granted, the appeal by ASIC be treated as instituted, heard instanter and allowed, pars 1 and 2 of the declarations made on 9 March 2000 be set aside, the matter be remitted to the Full Court of the Federal Court for further hearing and determination and that the respondents pay ASIC's costs.
In addition or as an alternative to its appeal, ASIC sought from the Full Court orders absolute for certiorari and mandamus respectively to set aside the orders of the Full Court made on 9 March 2000 and oblige the Federal Court to consider and determine the appeal before it. These applications were dismissed, given the orders made on the appeal by ASIC.
There were before this Court other applications for special leave to appeal, one by Edensor and the others by Yandal Gold, Yandal Holdings and members of the Normandy Group. These applicants drew a distinction between "jurisdiction" and "power" and submitted that, while the Federal Court had been seised of jurisdiction, it had lacked the power to make order 7. Their complaint was that the Full Court should have decided the appeal on the footing that the Federal Court had had no power to make orders under s 737 or s 739 of the Corporations Law of Victoria and that the Full Court should have ordered payment out of the $28.5 million to Edensor. In addition, or in the alternative, these parties sought orders for certiorari and mandamus directed to the Federal Court. This Court ordered that all these applications be dismissed.
What follows are our reasons for joining in the making of those orders.
The status of ASIC and par (a) of s 39B(1A)
The first question which arises concerns the status of ASIC. It is established by ss 7 and 8 of the ASIC Act as a body corporate. That circumstance does not, of itself, deny the proposition that ASIC falls within the scope of the expression "the Commonwealth" in s 75(iii) of the Constitution. In an appropriate context, those words are of sufficient width to include a corporation which is an agency or instrumentality of the Commonwealth[33]. The ASIC Act provides (s 9) that its members are appointed by the Governor-General on the nomination of the Minister administering the ASIC Act[34]. Provision is made in s 12 of the ASIC Act for the giving by the Minister of written directions to ASIC respecting the exercise of its functions and powers. Those functions and powers are spelled out in ss 11 and 12A and pertain to the executive functions of government. Section 120 of the ASIC Act provides that the staff of ASIC are appointed as employees under the Public Service Act 1922 (Cth)[35]. The Parliament appropriates money for the purposes of ASIC (s 133) and its activities are inquired into by the Parliamentary Joint Committee on Corporations and Securities appointed pursuant to s 241 of the ASIC Act. ASIC is subjected to audit by the Auditor-General under s 8 of the Commonwealth Authorities and Companies Act 1997 (Cth).
[33]Deputy Commissioner of Taxation v State Bank (NSW) (1992) 174 CLR 219 at 232; Austral Pacific Group Ltd v Airservices Australia (2000) 74 ALJR 1184 at 1187‑1188 [10], 1194 [48]; 173 ALR 619 at 622‑623; 631‑632.
[34]See Acts Interpretation Act 1901 (Cth), ss 18C-19BA.
[35]Section 120 was amended by the Public Employment (Consequential and Transitional) Amendment Act 1999 (Cth), effective from 5 December 1999. These amendments are immaterial.
This is a clear case of a corporation established by a law of the Commonwealth which answers the description of "the Commonwealth" in s 75(iii) of the Constitution[36]. Section 39B(1A)(a) of the Judiciary Act is a law supported by s 77(i) of the Constitution; it defines the jurisdiction of the Federal Court with respect to a limited class of the matters mentioned in s 75(iii). The limitation is expressed in two ways. First, by identifying matters where the Commonwealth sues but not those where it is sued, and, secondly, by the nature of the relief sought.
[36]cf, as to the status of the National Companies and Securities Commission, The Broken Hill Pty Co Ltd v National Companies and Securities Commission (1986) 160 CLR 492 at 504‑505.
The moving party is identified as "the Commonwealth". The phrase in s 75(iii) "or a person suing … on behalf of the Commonwealth" was not reproduced in s 39B(1A)(a). It was submitted that this indicates an intention by the Parliament to exclude a body such as ASIC from the grant of jurisdiction by par (a) of s 39B(1A). This submission should be rejected.
The phrase in s 75(iii) upon whose absence in par (a) reliance is placed does not operate in s 75(iii) as words of limitation. The contrary is the case. In Deputy Commissioner of Taxation v State Bank (NSW), it was said in the joint judgment of the whole Court, with respect to the expression in s 75(iii) beginning "or a person suing …", that[37]:
"[n]o doubt these words were included in order to ensure that the jurisdiction conferred extended to cases in which the Commonwealth itself was not the nominal plaintiff or defendant. But that circumstance cannot operate as a reason for reading the references to the Commonwealth in the Constitution in a restricted sense."
The jurisdiction conferred by the use of the phrase "the Commonwealth" in par (a) should not be construed more narrowly than that conferred on this Court by the same phrase in s 75(iii) "unless", in the words of Brennan J, "the restriction appears expressly or by necessary intendment"[38]. The Judiciary Act contains various provisions in which the term "the Commonwealth" is used. In Maguire v Simpson, Mason J said[39]:
"There may be some question whether 'the Commonwealth' bears such a broad meaning in ss 61, 65, 66 and 67 of [the Judiciary Act], but these provisions are procedural in character, dealing with the name in which the Commonwealth may sue, and execution and satisfaction of judgments in suits in which the Commonwealth is a party. Likewise s 55E, which was inserted by Act No 55 of 1966, is a special provision setting out the persons or bodies for whom the Crown Solicitor may act. Even if in these provisions the expression 'the Commonwealth' should be more narrowly construed, I would not regard that circumstance as requiring that a similar interpretation be given to ss 56, 57 and 64."
The Judiciary Act did not then include s 39B in any form[40]. Moreover, the power of remitter by the Court to the Federal Court now conferred by s 44(2A) of the Judiciary Act[41] adopts as a whole the terms of s 75(iii) in describing the class of proceedings instituted in this Court which may be remitted.
[37](1992) 174 CLR 219 at 232.
[38]Deputy Commissioner of Taxation v Richard Walter Pty Ltd (1995) 183 CLR 168 at 193.
[39](1977) 139 CLR 362 at 399.
[40]Section 39B was introduced by the Statute Law (Miscellaneous Provisions) Act (No 2) 1983 (Cth), s 3 and Sched 1. Sub‑section (1A) of s 39B was added by the Law and Justice Legislation Amendment Act 1997 (Cth), s 3 and Sched 11.
[41]By s 3 and the Schedule to the Statute Law (Miscellaneous Provisions) Act (No 1) 1984 (Cth).
However, it is now settled that in s 64 of the Judiciary Act "the Commonwealth" is not used in some restricted sense so as to exclude statutory corporations which are agencies or instrumentalities of the Commonwealth[42]. There is no apparent necessary intendment that the absence from par (a) of s 39B(1A) of words which in s 75(iii) of the Constitution do not restrict the scope of that provision confines the statutory conferral of jurisdiction on the Federal Court.
[42]See Austral Pacific Group Ltd v Airservices Australia (2000) 74 ALJR 1184 at 1188‑1189 [15], 1194 [48]; 173 ALR 619 at 624, 631‑632.
The second limitation upon the class of s 75(iii) matters in respect of which jurisdiction is conferred by par (a) of s 39B(1A) refers to the nature of the relief sought. The relief sought by ASIC in the proceeding instituted in the Federal Court included a declaration of contravention of s 615 of the Corporations Law. Interlocutory relief, plainly injunctive in nature in the traditional sense, was sought, together with final orders, mandatory in substance and form, sought under s 737 and s 739 of the Corporations Law. Neither of these provisions uses the term "injunction" to describe the orders for which it provides. Remedies styled "injunctions" in accordance with the terms of the relevant statutory provisions (s 80 of the Trade Practices Act and s 12GD of the ASIC Act) also were sought by ASIC. These statutory regimes do not replicate the general law.
However, the term "injunction" in par (a) of s 39B(1A) should not be restricted to remedies having the particular characteristics of the remedy given traditionally by courts of equity, nor to the injunctive remedy against officers of the Commonwealth provided for in s 75(v) of the Constitution. In Australia, the injunctive remedy is still the subject of development in courts of equity, particularly in public law[43]. The remedies created by legislation such as s 737 and s 739 are not fundamentally distinct from the equitable remedy. The same is true of s 80 of the Trade Practices Act and s 12GD of the ASIC Act[44]. The limitation in par (a) of s 39B(1A) expressed by requiring injunctive or declaratory relief to be claimed is apt to exclude from this grant of jurisdiction to the Federal Court, for example, actions in which the Commonwealth seeks damages in tort or contract and no relief which is equitable in nature.
[43]Bateman's Bay Local Aboriginal Land Council v The Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247; Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135.
[44]See ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 at 263‑267; Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 74 ALJR 604 at 616 [67]; 169 ALR 616 at 632‑633.
Counsel for Edensor submitted that par (a) of s 39B(1A), and indeed the whole of s 39B, was excluded from any operation in the Federal Court proceeding. He referred to s 49(1)(d) and s 56(2) of the Commonwealth Act. These provisions are contained in Div 1 (ss 49‑61A) of Pt 9 of the Commonwealth Act. Division 1 is headed "Vesting and cross‑vesting of civil jurisdiction". Section 49 states:
"(1) This Division provides in relation to:
(a)the jurisdiction of courts in respect of civil matters arising under the Corporations Law of the Capital Territory; and
(b)the jurisdiction of the courts of the Capital Territory in respect of civil matters arising under any Corporations Law of a State;
and so provides to the exclusion of:
(c)the Jurisdiction of Courts (Cross-vesting) Act 1987; and
(d)section 39B of the [Judiciary Act].
(2)Nothing in this Division affects any other jurisdiction of any court."
The litigation instituted by ASIC in the Federal Court was not a civil matter arising under the Commonwealth Act in its operation (pursuant to s 5 thereof) as the Corporations Law of the Capital Territory, nor was the jurisdiction of the courts of that Territory engaged. In any event, the enactment of sub‑s (1A) of s 39B was later than that of s 49 of the Commonwealth Act. Finally, s 56(2), the other provision to which counsel referred, provides for the exercise by the Federal Court of jurisdiction conferred by State law. That conferral, by reason of the decision in Re Wakim, is ineffective. Moreover, the issue presently under consideration concerns the exercise by the Federal Court of federal, not State, jurisdiction. The provisions relied on by Edensor do not deny any operation par (a) of s 39B(1A) otherwise has in the present litigation.
Here, both limitations in par (a) of s 39B(1A) were satisfied and the proceeding in the Federal Court was one in which jurisdiction, necessarily federal, was conferred by that provision. That is not to deny that, concurrently, the Federal Court was exercising federal jurisdiction conferred by other laws of the Commonwealth supported by s 77(i) of the Constitution. Section 86(1) of the Trade Practices Act, s 12GJ of the ASIC Act (which confers exclusive jurisdiction in respect of proceedings such as those instituted by ASIC for contravention of s 12DA) and par (c) of s 39B(1A) (which confers jurisdiction in respect of non‑criminal matters arising under any laws made by the Parliament[45]) were all put forward by ASIC as additional sources of jurisdiction in this case.
[45]The effect of s 11(7) of the ASIC Act was that ASIC had any functions expressed to be conferred upon it by the Corporations Law of Victoria, and thus by ss 737 and 739 of that legislation. ASIC submitted that, in its operation in the present litigation, s 11(7) was supported by s 51(i) and (xx) of the Constitution and that, in applying to the Federal Court, ASIC was embarked upon a matter "arising under" s 11(7); this then engaged par (c) of s 39B(1A) of the Judiciary Act.
A proceeding in which jurisdiction is conferred on a federal court by a law under s 77(i) of the Constitution fixing upon one category of matter in ss 75 and 76 may involve the concurrent operation of other federal laws conferring jurisdiction defined by reference to the same or another head of jurisdiction specified in ss 75 and 76[46]. Further, s 32 of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act") confers upon the Federal Court federal jurisdiction in matters "associated" with matters in which its jurisdiction is invoked, being matters not otherwise within its jurisdiction[47].
[46]See Re East; Ex parte Nguyen (1998) 196 CLR 354 at 361 [14].
[47]Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261 at 278, 292.
However, it is convenient to test the contentions of ASIC respecting the exercise in the subject proceeding of federal jurisdiction by the Federal Court by reference first to par (a) of s 39B(1A). If ASIC's contentions be accepted, there will be no need to consider its alternative or cumulative submissions as to jurisdiction. They should be accepted. For the reasons given above, federal jurisdiction had been conferred in the proceeding as a matter in which the Commonwealth was seeking an injunction or a declaration.
The content of the "matter" under par (a) of s 39B(1A)
What was the content of that matter? The observations by Toohey, McHugh and Gummow JJ in Re McJannet; Ex parte Minister for Employment, Training and Industrial Relations (Q) (adjusted to refer to s 75(iii) rather than s 76(ii)) are pertinent. Their Honours said[48]:
"The matters mentioned in ss 75 and 76 identify federal jurisdiction by such characteristics as identity of parties (s 75(iii), (iv)), remedy sought (s 75(v) itself), content (interpretation of the Constitution – s 76(i)), and source of the rights and liabilities which are in contention (ss 75(i), 76(ii)). (The constitutional term 'matter' also extends to include accrued and pendent claims and pendent parties, but for immediate purposes nothing turns on this.) For this litigation, the particular jurisdiction of the Federal Court invoked by the applicants had been defined by the Parliament with respect to matters arising under laws made by it (s 76(ii)). The question then becomes one of identifying the metes and bounds of any matter said so to arise."
In Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd, Gaudron J observed that[49]:
"'matters' is a word of such generality that it necessarily takes its content from the categories of matter which fall within federal jurisdiction and from the concept of 'judicial power'".
[48](1995) 184 CLR 620 at 653. See also Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 74 ALJR 604 at 619‑620 [86]-[87]; 169 ALR 616 at 637.
[49](2000) 74 ALJR 604 at 611 [42]; 169 ALR 616 at 626.
In the submissions in the present application to this Court, the term "accrued jurisdiction" was used to identify the claims by ASIC to relief for contravention of s 615 of the Corporations Law. The authorities in which that expression was given currency by this Court were all cases in which the Federal Court was seised of jurisdiction in a matter which, within the meaning of s 76(ii) of the Constitution, was one arising under a law made by the Parliament. In Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd[50], Fencott v Muller[51] and Stack v Coast Securities (No 9) Pty Ltd[52], the federal law was the Trade Practices Act and claims also were made based on one or more of contract, tort and breach of fiduciary duty. These non-federal claims were elements in the one controversy constituting the relevant "matter".
[50](1981) 148 CLR 457.
[51](1983) 152 CLR 570.
[52](1983) 154 CLR 261.
There is no harm in the continued use of the term "accrued jurisdiction" in such situations provided several matters are borne in mind. First, while there are various claims, in these cases there is but one "matter" in the constitutional sense and the court in question either does or does not have jurisdiction in respect of it. Moreover, in Re Wakim[53], Gummow and Hayne JJ (with whom Gleeson CJ and Gaudron J agreed generally) expressed doubts as to what was meant by statements in some of the cases that the "accrued jurisdiction" was "discretionary" rather than "mandatory". Ordinarily, questions of abuse of process, forum non conveniens and the like aside, jurisdiction conferred upon a court is to be exercised[54].
[53](1999) 198 CLR 511 at 588 [149].
[54]Ward v Williams (1955) 92 CLR 496 at 505‑506; Mitchell v The Queen (1996) 184 CLR 333 at 345‑346; Gould v Brown (1998) 193 CLR 346 at 458 [228].
Secondly, the phrase "accrued jurisdiction" may be likely to mislead where federal jurisdiction is attracted, not by the existence of federal law as a source of substantive rights and liabilities, but by the identity of the parties or a party. The identity of a party as the Commonwealth, within the sense of s 75(iii) of the Constitution, may be a sufficient animating circumstance without any federal law supplying the substantive rights and liabilities which are tendered for adjudication. The present is one such case. Litigation between residents of different States, within the meaning of s 75(iv), would be another.
In the proceeding commenced here by ASIC, the Federal Court was seised of federal jurisdiction by reason of the identity of the moving party and the nature of the relief sought by that party. The "matter" was a justiciable controversy identifiable independently of the proceeding brought for its determination[55]. The focus of attention is that indicated by the joint judgment of five members of this Court in Crouch v Commissioner for Railways (Q)[56], namely "upon the substance of the dispute" and "the substantial subject matter of the controversy".
[55]Fencott v Muller (1983) 152 CLR 570 at 603‑606.
[56](1985) 159 CLR 22 at 37.
The controversy was to be determined, in the words of Deane and Gaudron JJ, "in accordance with the independently existing substantive law"[57]. That body of law will supply the measure of the rights and liabilities which are at stake. It will include the common law of Australia[58] (which incorporates choice of law rules expounded in John Pfeiffer Pty Ltd v Rogerson) as modified by federal law or any applicable State law and, common law apart, the rights and liabilities created by applicable statute law. The resolution of the controversy by the Federal Court in the proceeding instituted by ASIC, as was pointed out in the joint judgment in John Pfeiffer Pty Ltd v Rogerson[59], strictly did not "involve any choice between laws of competing jurisdictions"; this is because the jurisdiction of the Federal Court is clearly Australia wide.
[57]Deputy Commissioner of Taxation v Richard Walter Pty Ltd (1995) 183 CLR 168 at 205.
[58]The Commonwealth v Mewett (1997) 191 CLR 471; Austral Pacific Group Ltd v Airservices Australia (2000) 74 ALJR 1184 at 1196 [56]; 173 ALR 619 at 634.
[59](2000) 74 ALJR 1109 at 1119‑1120 [53]; 172 ALR 625 at 640.
The Full Court was therefore correct to conclude that the power to make order 7, if it was to be found at all, had to be found under the Corporations Law. Unfortunately, in my view, in the aftermath of Wakim, the legislative provisions propounded fall short of providing the necessary power. There being no other way of circumventing this conclusion, order 7 was, in my view, invalid. Edensor and the Yandal Gold interests were entitled, in the Full Court, to relief on that footing. They were entitled to such relief, not on the basis that the Federal Court lacked jurisdiction over the parties and the matter but on the basis that it lacked power to make order 7 as it did.
Conclusion: concurrence and variation of orders
It follows that, on my approach, it was necessary for this Court to set aside the two declarations made by the Full Court in the terms in which those declarations were expressed. That is why I joined in the orders of this Court to that end. I also joined in this Court's order that the Full Court should proceed with the hearing and determination of the appeal to it by Edensor on the merits raised by the appeal. To give effect to these conclusions, I concurred in all of the orders announced by this Court, except that order providing that Edensor and the Yandal Gold interests should pay the costs of the proceedings in this Court.
Once the Full Court severed order 7 for separate consideration, it was basically correct, so far as it went, in its original reasoning which addressed the power of the Federal Court to make that order. It was then misled into formalising its record in terms of erroneous declarations of a want of jurisdiction so as to facilitate the application of the State Jurisdiction Act. But this occurred because of the submissions of ASIC. It occurred in the face of the contrary submissions of the opposing parties.
In logic, and in law, the original reasoning of the Full Court required it to set aside order 7. The Full Court, if minded to sever the challenge to that order from the other grounds of appeal (still undetermined) should have afforded appropriate relief. It should have relisted the appeal for determination of such of the remaining grounds of appeal as raised questions within its jurisdiction over the parties and the matter. Clearly, to the extent that the Federal Court has jurisdiction on any basis, including the jurisdiction to determine its own jurisdiction, it must fully discharge that jurisdiction once it is invoked. This would be so even if the State Jurisdiction Act in its various provisions dealing with "ineffective judgment[s]"[239] were constitutionally valid. Because, in my opinion, it is not[240], the duty to exercise whatever jurisdiction the Federal Court has is paramount, unqualified and necessary. It should be performed with eyes firmly fixed on the Constitution, the Federal Court Act and other federal law. It should be discharged without undue attention to the siren song of the State Jurisdiction Act that, on this occasion, seems to have diverted the Full Court from completing its functions by making orders consistent with its original reasoning.
[239]State Jurisdiction Act, ss 3, 6-8, 10.
[240]Re Macks; Ex parte Saint [2000] HCA 62 at [307]-[310].
Orders
On 30 August 2000, the Court announced its orders. To give effect to my conclusions, I joined in all of the orders save order 4. In my opinion, that order should have read: The appellant, Australian Securities and Investments Commission, to pay the respondents' costs.
HAYNE AND CALLINAN JJ. The facts and circumstances giving rise to these matters are set out in the reasons of Gleeson CJ, Gaudron and Gummow JJ and we need not repeat them. We agree generally with the reasons of Gleeson CJ, Gaudron and Gummow JJ. We write separately only because there are some matters dealt with in their Honours' reasons about which we need reach, and express, no concluded view.
The course which this litigation has taken suggests that insufficient attention has been given to the fact that the Federal Court of Australia had jurisdiction in the matter. That the Federal Court did have jurisdiction in the matter was not disputed. Nor was it doubted that it was exercising federal jurisdiction. The consequences of this were not, however, explored. Once a court is exercising federal jurisdiction, the provisions of the Judiciary Act 1903 (Cth), which provide for the application of relevant State and Territory laws, must be considered. In particular, reference must be made to s 79 and its provision that "[t]he laws of each State or Territory … shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable".
It is as well to examine how the Federal Court had jurisdiction (necessarily federal) because this throws light on the issues of statutory construction which lie at the heart of these proceedings. For the reasons given by Gleeson CJ, Gaudron and Gummow JJ, the Australian Securities and Investments Commission ("ASIC") is, for the purposes of both s 75 of the Constitution and s 39B(1A)(a) of the Judiciary Act, "the Commonwealth". It follows that, because ASIC sought a declaration and an interlocutory injunction, s 39B(1A)(a) of the Judiciary Act gave the Federal Court jurisdiction in the matter. (The argument that either s 49 or s 56 of the Corporations Act 1989 (Cth) limited the operation of s 39B(1A) of the Judiciary Act in this case should be rejected.) The Federal Court had jurisdiction to quell the whole of the controversy between the parties. It is, therefore, unnecessary to say whether a claim only for statutory relief of the kind then provided for by ss 737 and 739 of the Corporations Law would provide a basis for jurisdiction under either s 75(v) or s 39B(1A)(a).
There is another path which leads to the conclusion that the Federal Court had jurisdiction. The subject matter of the controversy included claims under the Trade Practices Act 1974 (Cth) and the Australian Securities and Investments Commission Act 1989 (Cth). As the Full Court of the Federal Court pointed out, this meant that the whole matter was within its jurisdiction.
Central to the contentions of the parties who submitted that the primary judge had no power to make order 7 was the proposition that, despite the fact that the Federal Court had jurisdiction, the Corporations Law of Victoria did not give it authority to make orders under ss 737 and 739 of that Law. This proposition was said to follow from the use of the expression "when exercising the jurisdiction of this jurisdiction" in the definition of "Court" in s 58AA. As Gleeson CJ, Gaudron and Gummow JJ point out, however, s 58AA does not seek to distinguish between federal and non‑federal jurisdiction. It is a provision directed to distinguishing between provisions of the Corporations Law permitting curial relief which all courts in the judicial hierarchy of the State may grant and those provisions permitting relief which only superior courts in that hierarchy may grant.
That s 58AA is not concerned to treat federal and non‑federal jurisdiction differently is evident once it is remembered that federal jurisdiction can be, and often is, attracted because of the identity of one or more of the parties. In matters arising under the Corporations Law of a State, federal jurisdiction will often be attracted, and exercised by a State court or a federal court, because ASIC is the Commonwealth. As Gleeson CJ, Gaudron and Gummow JJ point out, reference to "accrued jurisdiction" in a case where federal jurisdiction is attracted because of the identity of a party may distract attention from the central question, which is to identify the relevant "matter": the controversy which is to be quelled. As their Honours say, ordinarily, questions of abuse of process, forum non conveniens and the like aside, jurisdiction conferred upon a court is to be exercised. References to "accrued jurisdiction" being "discretionary" are apt to mislead[241].
[241]Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 588 [149] per Gummow and Hayne JJ.
The questions which would arise if a State attempted to preclude courts exercising federal jurisdiction from making particular kinds of order do not arise. They do not arise because the Corporations Law did not seek to limit the powers of courts exercising federal jurisdiction. The only questions are, therefore, whether and how ss 737 and 739 can be invoked by a court exercising federal jurisdiction. It is sufficient for present purposes to say that, for the reasons given by Gleeson CJ, Gaudron and Gummow JJ, s 79 of the Judiciary Act operated to pick up ss 737 and 739. Even if those sections had been cast in terms which spoke only of the courts of the State granting remedies under them, it would not mean that they were not, in the words of s 79, "applicable" to the litigation between these parties in the Federal Court[242]. We need not say whether this conclusion can be derived directly from the operation of Ch III of the Constitution. Nor do we need to consider the comparison that may be drawn with United States authorities.
[242]Austral Pacific Group Ltd v Airservices Australia (2000) 74 ALJR 1184 at 1188 [13]; 173 ALR 619 at 624.
The definition of "Court" in s 58AA, which must be read into ss 737 and 739, does refer to the Federal Court. That explicit reference to the Federal Court does not deny the operation of s 79 of the Judiciary Act. It does not make ss 737 and 739 any less applicable to this litigation than they would have been had s 58AA referred only to State courts.
It is for these reasons that we joined in the orders which were made.
39
3