Bogan & Anor v The Estate of Peter John Smedley (Deceased) & Ors

[2024] HCATrans 30

[2024] HCATrans 030

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M21 of 2024

B e t w e e n -

ANTHONY BOGAN

First Applicant

MICHAEL THOMAS WALTON

Second Applicant

and

THE ESTATE OF PETER JOHN SMEDLEY (DECEASED)

First Respondent

ANDREW GERARD ROBERTS

Second Respondent

PETER GRAEME NANKERVIS

Third Respondent

JEREMY CHARLES ROY MAYCOCK

Fourth Respondent

KPMG (A FIRM) ABN 51 194 660 183

Fifth Respondent

GAGELER CJ

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA BY VIDEO CONNECTION

ON WEDNESDAY, 1 MAY 2024 AT 10.00 AM

Copyright in the High Court of Australia

____________________

HIS HONOUR:   In accordance with the protocol for remote hearings, I will announce the appearances of the parties.

MR S.H. HARTFORD DAVIS and MR M.O. PULSFORD appear for the applicants.  (instructed by Banton Group)

MR D.P. FARINHA appears for the first to fourth respondents.  (instructed by Baker McKenzie)

MR J.G. WHERRETT appears for the fifth respondent.  (instructed by Ashurst Australia)

MR S.N. RAJANAYAGAM appears on behalf of the Attorney‑General of the Commonwealth, seeking leave to appear.  (instructed by Australian Government Solicitor)

HIS HONOUR:   Mr Rajanayagam, you have that leave.  Let me tell you the difficulties with listing this matter.  I do not propose to list it for hearing for more than one day.  If there is no constitutional issue, the matter can be heard before five Justices on 14 June in Canberra.  The existing timetable, I think, would accommodate that hearing date.  If there is a real constitutional issue, then I would list it before seven Judges in the week commencing 12 August, in Adelaide.  They are the two options.  Which option is chosen very much depends, Mr Hartford Davis, on how seriously this constitutional issue is raised.

There is, I note in the decision of the Supreme Court of Victoria – in the Court of Appeal – a recitation of the “Constitutional setting” that appears under that heading at paragraphs 81 to 84.  I do not want to pre‑empt the position of the parties, but that seems to be a fairly neutral recitation of what I would expect to be common ground.

Your point, though, seems to go to validity, in some way, Mr Hartford Davis, and you might explain to me what the point is and tell me whether it would be prominent in your argument.

MR HARTFORD DAVIS:   Can I start with the second part of your Honour’s question?  It would not be prominent in our argument, I accept that.  It was addressed, relatively briefly, at the heel of the hunt in the Victorian Court of Appeal.  However, it is seriously pressed, and we have, as your Honour no doubt appreciates, issue with the 78B notices.  It arises on a particular construction or a set of constructional choices only, and it is raised by us as a reason to avoid that . . . . . that the court would prefer not to adopt that set of constructional choices.

The heart of the point, if I can attempt to summarise it briefly, is that section 1337P of the Corporations Act requires a transferee court to deal with a proceeding – it:

must deal with the proceeding as if, subject to any order of the transferee court, the steps that had been taken for the purposes of the proceeding in the transferor court . . . or similar steps, had been taken in the transferee court.

Our submission on construction, which was accepted by the Victorian Court of Appeal, is that 1337P(2) only operates where the transferee court has a power to make a same or similar order.  There are textual reasons why we advance that submission, which the Victorian Court of Appeal accepted.  The constitutional point arises only if that is wrong, and that 1337P(2), on this contention hypothesis, does require a transferee court to proceed as if a step that had been taken in the transferor court, which it has no power to make – that is, the transferee court has no power to make – and which is contrary to the legislative policy of what I will call the transferee polity, had been made in the transferee court.

In other words, on this view of the world, section 1337P requires the transferee court to proceed as if an order had been made which the transferee court lacks the power to make and which is contrary to the legislative policy of the transferee polity in circumstances where the transferee court lacks power to vary or alter, or otherwise remove the operation of the order.

HIS HONOUR:   So, the construction that you are arguing would result in constitutional validity is one that would make the existing order of the Victorian Supreme Court an order, in effect, of the Supreme Court of New South Wales, which the Supreme Court of New South Wales would be unable to vary because it has no power.  Is that the argument that you are – or the construction you are seeking head off?

MR HARTFORD DAVIS:   I think not quite, and there is a part of what your Honour has put that I simply have to cavil with, accepting and acknowledging that the construction of this provision is very difficult and how the 78B notice was filed before we saw the way it was put, at least by the fifth respondent.  The construction which raises the constitutional difficulty is not one which, as it were, impresses as an order of the court the transferor court’s order on the transferee court.  It is not an order which is required by 1337P to have been made, or which is assumed by 1337P to have been made, it is instead a direction, in mandatory terms, that the transferee court deal with the proceeding “as if” such an order had been made.

It is a fiction which does not necessarily presuppose that there is an order enforced in the transferee court.  Despite there being no order enforced in the transferee court, that court is required to proceed on the basis that there is such an order, even though there is not one, in circumstances where the transferee court would have no power to make it, alter it, or dispense with it.

HIS HONOUR:   I am not saying I fully understand it, Mr Hartford Davis, but as I – I think I understand enough to know that your constitutional point goes to the validity of section 1337P(2) on one construction, for which you do not contend.

MR HARTFORD DAVIS:   That is correct, yes, your Honour.

HIS HONOUR:   Is there anything else in the constitutional point?  Or is there another constitutional point?

MR HARTFORD DAVIS:   There is another constitutional point, albeit not one which I think I need to spend to time on, or which would materially change the way your Honour’s approach in the directions hearing this morning.

HIS HONOUR:   You mean you are not giving it up?

MR HARTFORD DAVIS:   Perhaps I can answer the question in this way.  The 78B notice contends that question 2(a) in the questions removed:

involves a matter arising under the Constitution . . . because the Applicants will contend that it would be beyond the Commonwealth’s legislative power (under s 51(xxxix) of the Constitution and having regard to Chapter III considerations) –

which have just been outlined.

HIS HONOUR:   Meaning it is not an independent point.  It quite simply follows from your Chapter III argument, does it?

MR HARTFORD DAVIS:   I think for present purposes, your Honour, I should accept that, but I am cautious because we are at the moment grappling with these very issues and it is under advisement, as it were.  For the purposes of this morning, your Honour should proceed on the basis that the, as it were, high water mark of the constitutional arguments is the Chapter III point I have outlined.

HIS HONOUR:   Thank you.  That would mean that you would be accepting the case is appropriate to be heard before seven Justices and the week of 12 August would be the appropriate hearing date.

MR HARTFORD DAVIS:   Yes, your Honour, that is the position for which we contend.

HIS HONOUR:   Yes, thank you.  Mr Farinha.

MR FARINHA:   Your Honour, my client’s submissions do not address the constitutional issue directly.  We have adopted the position of the fifth respondent on the question to which that relates.  My clients have filed their submissions in accordance with the timetable for a June hearing, and they support the fifth respondent’s position, which I understand to be that the matter should be heard at the earliest date convenient to the Court.  Given my clients’ more limited role, I am content to refer to Mr Wherrett to address your Honour on the reasons for that position.

HIS HONOUR:   Thank you, Mr Farinha.  Mr Wherrett.

MR WHERRETT:   The fifth respondent’s position is that the constitutional argument sought to be raised by the applicants is weak, but as my learned friend has indicated this morning, it appears that it is seriously pressed, given that it is raised in a 78B notice as well as a document in the nature of a notice of contention that has been filed.  The fifth respondent has also addressed that constitutional issue insofar as it was able to do so in its submissions that have already been filed.  So, the fifth respondent would say that it is a matter for the Court, in terms of whether it wants to sit seven or five Justices.

However, I would note that this Court does not invariably sit seven Justices whenever there is any constitutional issue in the proceedings, and an example of that recently was the case of Redland City Council v Kozik, where there were constitutional issues in that case but nevertheless the Court sat five Justices.  So, simply because the applicants have raised a constitutional issue does not necessarily demand a seven‑Justice hearing, in my submission.

HIS HONOUR:   Thank you, Mr Wherrett.  Mr Rajanayagam, do you wish to say anything?

MR RAJANAYAGAM:   Your Honour, in circumstances where the Commonwealth Attorney has not yet decided whether to intervene, we are agnostic as to whether the hearing proceeds in June before five Justices or in August before seven.  I will seek to say something, depending on which of those courses is chosen, as to when the Attorney’s submissions should be due if he does decide to intervene, but I apprehend now might not be the time to . . . . . those submissions.

HIS HONOUR:   Thank you.  Having heard from the counsel for the parties, the decision that I make is that the matter will be listed for hearing before seven Justices for one day in the week commencing 12 August.  That will lead to some appropriate amendment of the timetable.  I have, helpfully – in the affidavit of Mr Smith, filed on behalf of the applicants – a proposed timetable that appears in the last paragraph.  Would that be suitable, Mr Hartford Davis?

MR HARTFORD DAVIS:   Yes, your Honour, paragraph 46 is a convenient place to discuss such amendments of the timetable as may be necessary.  If your Honour picks it up, as has been pointed out:  the first two steps set out at paragraph 46 have been achieved.  On 18 April, the fifth respondent filed its submissions and other materials.  That was 18 April.  The second step was achieved on 24 April.

HIS HONOUR:   Yes.

MR HARTFORD DAVIS:   The next step is one at which I pause, because it does seem to us to be the appropriate course, now that your Honour has fixed it for 12 August, that the Commonwealth Attorney‑General go next, as usually occurs under Part 44, so that we can grapple with the construction of the critical provision, 1337P, which is proffered by the Commonwealth, and the Commonwealth’s position on validity.

If that submission were accepted by your Honour, then we would be content to allow such time, as Mr Rajanayagam had indicated, is required by the Commonwealth to file its submissions.  Or otherwise, if your Honour is minded to direct that such submissions as may be filed by the Commonwealth Attorney occur after our submissions, then I can address your Honour on that contingency.  There is that point of departure, depending on how your Honour is minded to deal with that issue.

HIS HONOUR:   My view on that, Mr Hartford Davis, is that it is your constitutional point, you should articulate it in your submissions before anyone responds to it.

MR HARTFORD DAVIS:   May it please the Court.  The next step to occur, then, will be our submissions and book of materials, which we would propose be filed by 21 May, as your Honour sees in the fourth line, fourth row to the bottom.  We would then suggest that, if your Honour then looks at the third line to the bottom, that be amended so that it is the submissions of any intervener be filed on or before 4 June.  So, your Honour would strike through the words “in support of the Applicants” and it would – we do not yet know – would it assist your Honour to have a brief update on the position of the Attorneys as has been communicated to us?

HIS HONOUR:   Yes.

MR HARTFORD DAVIS:   We have been informed that South Australia, Queensland, Western Australia and Tasmania do not wish to intervene, and we have not heard from the Australian Capital Territory or the Northern Territory, but we are proceeding on the basis they will not.  The Attorney‑General for the Commonwealth, and the Attorneys for New South Wales and Victoria have indicated to us that they are still considering whether to intervene.  New South Wales has indicated they will make a decision by the end of this week.  We are waiting to see about three Attorneys, but we anticipate that if Victoria were to intervene it may be in our favour, but we think, given what your Honour has indicated and which we accept, any intervener’s submission should go on by 4 June, regardless of which party they support.

HIS HONOUR:   And then the other orders as indicated?

MR HARTFORD DAVIS:   Except that after the fifth respondent’s reply, here indicated on 11 June, we would seek an order that the applicants be permitted to reply on the constitutional points, or perhaps more accurately on question 2, within two weeks of the fifth respondent’s reply.

HIS HONOUR:   Just tell me what order you want and what date you want in it.

MR HARTFORD DAVIS:   Yes, your Honour.  The order that we seek is that the applicants’ reply to the submissions of the fifth respondent and any intervener on question 2 be filed on or before 18 June.

HIS HONOUR:   “The applicants’ reply to the submissions of” what?

MR HARTFORD DAVIS:   Of the fifth respondent and any intervener concerning question 2.

HIS HONOUR:   And the date, again?

MR HARTFORD DAVIS:   On or before 18 June, and then the date in the last line would change to 25 June, for the joint book of authorities.

HIS HONOUR:   All right, thank you.  Mr Farinha, do you have anything to say about that?

MR FARINHA:   Sorry, your Honour, I understand my clients have no difficulty with the timetable.

HIS HONOUR:   Mr Wherrett?

MR WHERRETT:   Sorry, your Honour.  No, your Honour, not to be – no opposition to the ability for the applicants to file a reply.  I would, respectfully, suggest that a page limit be imposed upon that, to the extent that one is necessary, but that is the only matter I wish to say about that.

HIS HONOUR:   Thank you.  Mr Rajanayagam?

MR RAJANAYAGAM:   No opposition to that, also, your Honour.

HIS HONOUR:   All right.  The directions I will make in place of the prospective part of the existing timetable are as follows:

1.The applicants’ submissions and applicants’ book of further materials are to be filed on or before 21 May 2024.

2.The submissions of any intervener are to be filed on or before 4 June 2024.

3.The fifth respondent’s reply is to be filed on or before 11 June 2024.

4.The applicants’ reply to the submissions of the fifth respondent and any intervener concerning question 2, which are not to exceed five pages, are to be filed on or before 18 June 2024.

5.The joint book of authorities is to be filed on or before 25 June 2024.

Is there anything else, gentlemen?

MR HARTFORD DAVIS:   Thank you, your Honour.

MR RAJANAYAGAM:   Nothing, your Honour.

MR WHERRETT:   No, your Honour.

MR FARINHA:   No, your Honour.

HIS HONOUR:   Thank you, the Court will now adjourn.

AT 10.21 AM THE MATTER WAS ADJOURNED