BP Australia Ltd v Amann Aviation Pty Ltd
[1996] FCA 491
•24 JUNE 1996
CATCHWORDS
CONSTITUTIONAL LAW - powers of Commonwealth and States - Commonwealth-State co-operative legislative scheme - companies - liquidation - co-operative federalism: Commonwealth, States and Territories passing mutually consistent legislation to establish national cross-vesting scheme and national corporations law - whether power in Constitution for States to invest federal courts with state jurisdiction - whether Commonwealth's power to create federal courts and define their jurisdiction is confined under s. 77(i) of the Constitution to matters set out in ss. 75 and 76 of the Constitution - whether States, by virtue of cross-vesting legislation, may invest federal courts with state jurisdiction - Commonwealth Parliament competent to permit federal courts and tribunals to receive and exercise powers conferred by State Parliaments in the context of a co-operative scheme - limitations - express or implied restraints in the Constitution - state jurisdiction to be similar to that conferred on States by Commonwealth - conferral of state jurisdiction to be conducive to or consistent with achievement of object which conferral by Commonwealth is intended to achieve - whether Federal Court has power to make examination orders, to issue summonses or to conduct and hear examinations under s. 596A or s. 596B, Corporations Law.
Administrative Decisions (Judicial Review) Act 1977: s. 9(2)
Commonwealth Constitution: ss. 75, 76, 77(1), 122
Corporations Act 1989: ss. 56(2), 596A, 596B.
Corporations (New South Wales) Act 1990: s. 42(3)
Corporations (Victoria) Act 1990: s. 42(3)
Federal Court of Australia Act 1976: s. 19
Jurisdiction of Courts (Cross-Vesting) Act 1987: ss. 4, 5, 9(2)
Jurisdiction of Courts (Cross-Vesting) Act 1987 (Western Australia): s. 4(1)
BP AUSTRALIA LIMITED v AMANN AVIATION PTY LIMITED
VG 3304 of 1992
CORTAUS LIMITED (IN LIQUIDATION) v LARKEN LIMITED & ORS
SG 111 of 1993
SOUTHERN STEEL SUPPLIERS PTY LIMITED & ANOR v FAVELLE FAVCO HOLDINGS PTY LIMITED
NG 3239 of 1995
BLACK CJ, LOCKHART and LINDGREN JJ.
SYDNEY
24 JUNE 1996
IN THE FEDERAL COURT OF AUSTRALIA )
)
VICTORIAN DISTRICT REGISTRY ) No. VG 3304 of 1992
)
GENERAL DIVISION )
BETWEEN:BP AUSTRALIA LIMITED
Applicant
AND:AMANN AVIATION PTY LIMITED
Respondent
IN THE FEDERAL COURT OF AUSTRALIA )
)
SOUTH AUSTRALIAN DISTRICT REGISTRY ) No. SG 111 of 1993
)
GENERAL DIVISION )
BETWEEN:CORTAUS LIMITED (IN LIQUIDATION)
Applicant
AND:LARKEN LIMITED & ORS
Respondents
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 3239 of 1995
)
GENERAL DIVISION )
BETWEEN:SOUTHERN STEEL SUPPLIERS PTY LIMITED & ANOR
Applicants
AND:FAVELLE FAVCO HOLDINGS PTY LIMITED
Respondent
COURT: BLACK CJ, LOCKHART and LINDGREN JJ.
DATE: 24 JUNE 1996
PLACE: SYDNEY
MINUTE OF ORDER
The following questions were referred by the Chief Justice for determination by a Full Court under s. 20(1A) of the Federal Court of Australia Act 1976.
In the Amann proceeding the questions referred are the following:
'1.(a)Did s42(3) of the Corporations (NSW) Act, 1990, or s42(3) of the Corporations (Vic) Act, 1990 and s56(2) of the Corporations Act, 1989 (Cth) operate validly to confer upon the Court jurisdiction to make the Orders?
(b)If no to question 1(a), did s42(3) of the Corporations (NSW) Act, 1990 or s42(3) of the Corporations (Vic) Act, 1990 and s9(2) of the Jurisdiction of the Courts (Cross-Vesting) Act 1987 (Cth) operate validly to confer upon the Court jurisdiction to make the Orders?
(c)If no to questions 1(a) and 1(b), did the Court otherwise have jurisdiction to make the Orders?
If no to each part of question 1 are the Orders liable to be set aside and, if so, from what date?
3.(a)Did, or does (as the case may be), s42(3) of the Corporations (NSW) Act, 1990 or s42(3) of the Corporations (Vic) Act, 1990 and s56(2) of the Corporations Act, 1989 (Cth) operate validly to confer upon the Court jurisdiction to:
(i)make the Examination Orders;
(ii)issue the Summonses; or
(iii) to conduct and hear examinations under ss596A or 596B or any, and which, provision of Part 5.9 Division 1 of the Corporations Law?
(b)If no to question 3(a) did, or does (as the case may be), s42(3) of the Corporations (NSW) Act, 1990 or s42(3) of the Corporations (Vic) Act, 1990 and s9(2) of the Jurisdiction of Courts (Cross-Vesting) Act, 1987 (Cth) operate validly to confer upon the Court jurisdiction to:
(i)make the Examination Orders;
(ii)issue the Summonses; or
(iii)to conduct and hear examinations under ss596A or 596B or any, and which, provision of Part 5.9 Division 1 of the Corporations Law?
(c)If no to questions 3(a) and 3(b), did, or does (as the case may be), the Court otherwise have jurisdiction to:
(i)make the Examination Orders;
(ii)issue the Summonses, or
(iii)to conduct and hear examinations under ss596A or 596B and or any, and which, provision of Part 5.9 Division 1 of the Corporations Law?
4.If no to each part of question 3 should an order be made on the application of the Examinees setting aside:
(a)the Examination Orders; and
(b)the Summonses?
5.Are the Applicant Examinees by their Notice of Motion filed 30 August 1995, a copy of which is Annexure "I", entitled to any, and if so what, orders or declarations?'
In the Cortaus proceeding the questions referred by the Chief Justice are as follows:
'1.Do s.4(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (WA) and/or s.9(2) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) operate validly to confer upon the Federal Court of Australia jurisdiction to hear and determine these proceedings?
If the answer to both parts of Question 1 is "no", may the present proceedings validly be cross vested to the Supreme Court of South Australia?'
In the Favelle proceeding the questions referred are the following:
'1.Do section 42 (3) of Corporations (NSW) Act 1990 and section 56(2) of the Corporations Act 1989 (Cth) operate validly to confer upon the Federal Court jurisdiction to determine the applicants' application?
2.If no to question 1, do section 42(3) of Corporations (NSW) Act 1990 and section 9(2) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) operate validly to confer upon the Federal Court jurisdiction to determine the applicants' application?
3.Does the Federal Court of Australia have jurisdiction to entertain the applicants' application?'
THE COURT ORDERS THAT:
The questions referred be answered as follows:
Amann
Question 1(a): 'Yes'.
- 5 -
Question 1(b) and (c) and 2: 'These questions do not arise'.
Question 3(a): 'Yes'.
Questions 3(b), (c) and 4: 'These questions do not arise'.
Question 5: 'No'.
Cortaus
Question (1): 'Yes'.
Question (2): 'This question does not arise'.
Favelle
Question (1): 'Yes'.
Question (2): 'This question does not arise'.
Question (3): 'Yes'.
The costs of the notices of motion of the parties supporting the validity of the Cross-Vesting Scheme and Chapter 9 of the Corporations Law be paid by the parties seeking to invalidate those provisions.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
VICTORIA DISTRICT REGISTRY )
GENERAL DIVISION ) No VG 3304 of 1992
BETWEEN:BP AUSTRALIA LIMITED
Applicant
AND:AMANN AVIATION PTY LIMITED
Respondent
IN THE FEDERAL COURT OF AUSTRALIA )
SOUTH AUSTRALIA DISTRICT REGISTRY )
GENERAL DIVISION ) No SG 111 of 1993
BETWEEN:CORTAUS LIMITED (IN LIQUIDATION)
Applicant
AND:LARKEN LIMITED & ORS
Respondents
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES )
GENERAL DIVISION ) NG 3239 of 1995
BETWEEN: SOUTHERN STEEL SUPPLIES PTY LIMITED & ANOR
Applicants
AND: FAVELLE FAVCO HOLDINGS PTY LIMITED
Respondent
CORAM: Black CJ, Lockhart and Lindgren JJ
DATE: 24 June 1996
PLACE: Sydney
REASONS FOR JUDGMENT
BLACK CJ: I have had the advantage of reading the reasons for judgment prepared by Lockhart J and by Lindgren J. I agree, for the reasons given by their Honours, that the challenges made to the constitutional validity of crucial parts of the cross-vesting scheme and the cross-vesting provisions of the Corporations Law fail.
The legitimacy of the cross-vesting of jurisdiction in civil matters as the subject of legislation in furtherance of co-operative federalism is underlined by the fact that despite there being, in the Australian judicial system, the Federal Court of Australia, the Family Court of Australia, the six Supreme Courts of the states and the two Supreme Courts of the internal territories, jurisdictional disputes are now virtually unknown. The problems for litigants arising from the existence of separate systems of federal and state courts, predicted as inevitable in some of the debates about federal courts in the 1970s, simply do not occur.
The history of federal, state and territory superior courts in Australia over nearly a decade since the general cross-vesting scheme was established shows that co-operation can avoid jurisdictional conflict and that conflict is not the inevitable consequence of the existence, in a federation, of more than one system of courts. Since Chapter III of the Constitution contemplates the creation of federal courts in a Federal Commonwealth in which there would also be state courts, it would be surprising indeed if the Constitution prohibited co-operative schemes which, whilst in no way compromising the integrity of the courts, avoided disputes arising from the existence within the one nation of both federal and state courts. As Lockhart J and Lindgren J show, it should be concluded that there is no such prohibition.
The questions should be answered and orders made in the terms proposed by Lockhart J.
I certify that this and the 2 preceding pages are a true copy of the Reasons for Judgment of the Hon. Chief Justice Black.
Associate
Dated:
IN THE FEDERAL COURT OF AUSTRALIA )
)
VICTORIAN DISTRICT REGISTRY ) No. VG 3304 of 1992
)
GENERAL DIVISION )
BETWEEN:BP AUSTRALIA LIMITED
Applicant
AND:AMANN AVIATION PTY LIMITED
Respondent
IN THE FEDERAL COURT OF AUSTRALIA )
)
SOUTH AUSTRALIAN DISTRICT REGISTRY ) No. SG 111 of 1993
)
GENERAL DIVISION )
BETWEEN:CORTAUS LIMITED (IN LIQUIDATION)
Applicant
AND:LARKEN LIMITED & ORS
Respondents
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 3239 of 1995
)
GENERAL DIVISION )
BETWEEN:SOUTHERN STEEL SUPPLIERS PTY LIMITED & ANOR
Applicants
AND:FAVELLE FAVCO HOLDINGS PTY LIMITED
Respondent
COURT: BLACK CJ, LOCKHART and LINDGREN JJ.
DATE: 24 JUNE 1996
PLACE: SYDNEY
REASONS FOR JUDGMENT
LOCKHART J.
Introduction and facts
These three proceedings, being heard together by consent, raise questions concerning the validity of crucial provisions of the Cross-Vesting Scheme and the cross-vesting provisions of the Corporations Law. They were heard by a Full Court of the Court in its original jurisdiction pursuant to directions given by the Chief Justice under s. 20(1A) of the Federal Court of Australia Act 1976 ('the Federal Court Act').
The relevant facts (most of them are taken from statements of agreed facts) may be briefly stated.
On 30 November 1992, on the application of BP Australia Limited ('BP'), Amann Aviation Pty Limited ('Amann') was wound up under the Corporations Law by order of this Court in the Victorian District Registry (matter No. VG 3304 of 1992). Amann was incorporated on 25 June 1982 in New South Wales under the Companies Act 1961 (NSW). After Amann was wound up, the Court ordered that certain persons be summonsed to attend before the Court to be examined on oath or affirmation about the examinable affairs of Amann. Summonses were then issued
by the Court, directing the various witnesses to attend for examination under s. 596A or s. 596B of the Corporations Law.
Cortaus Limited (In Liquidation) ('Cortaus'), a company incorporated in Western Australia, commenced proceeding SG 111 of 1993 on 29 October 1993. Cortaus alleges that the respondents contravened various provisions of the Companies (Western Australia) Code and committed certain breaches of equitable obligations. None of the causes of action pleaded in the amended statement of claim are alleged to have arisen under the Corporations Law. This proceeding does not involve the Corporations Law because the relevant company was wound up and is continuing to be wound up under the Corporations Code previously in force. Hence the Cortaus matter is concerned only with the validity of the pivotal provisions of the Cross-Vesting Scheme.
Favelle Favco Holdings Pty Ltd ('Favelle') was incorporated in 1989 under the Companies (New South Wales) Code. In proceeding G3239 of 1995, Southern Steel Supplies Pty Limited and Southern Sheet & Coil Pty Limited ('Southern Steels') applied for an order under s. 459A of the Corporations Law to wind up Favelle Favco Holdings Pty Limited ('Favelle'). Southern Steels therefore invoke the jurisdiction which s. 42(3) of the Corporations (NSW) Act 1990 purports to confer on the Federal Court and which s. 56(2) of the Corporations Act 1989 (Cth) purports to permit the Federal
Court to exercise.
Notices were given to the Attorneys-General of the Commonwealth, States and Territories pursuant to s. 78B of the Judiciary Act 1903. The Commonwealth of Australia and the State of New South Wales intervened to support the validity of the two streams of legislation.
When giving the directions under s. 20(1A) of the Federal Court Act, the Chief Justice referred certain specific questions to the Full Court to which I now turn.
In the Amann proceeding the questions referred are the following:
'1.(a)Did s42(3) of the Corporations (NSW) Act, 1990, or s42(3) of the Corporations (Vic) Act, 1990 and s56(2) of the Corporations Act, 1989 (Cth) operate validly to confer upon the Court jurisdiction to make the Orders?
(b)If no to question 1(a), did s42(3) of the Corporations (NSW) Act, 1990 or s42(3) of the Corporations (Vic) Act, 1990 and s9(2) of the Jurisdiction of the Courts (Cross-Vesting) Act 1987 (Cth) operate validly to confer upon the Court jurisdiction to make the Orders?
(c)If no to questions 1(a) and 1(b), did the Court otherwise have jurisdiction to make the Orders?
If no to each part of question 1 are the Orders liable to be set aside and, if so, from what date?
3.(a)Did, or does (as the case may be), s42(3) of the Corporations (NSW) Act, 1990 or s42(3) of the Corporations (Vic) Act, 1990 and s56(2) of the Corporations Act, 1989 (Cth) operate validly to confer upon the Court jurisdiction to:
(i)make the Examination Orders;
(ii)issue the Summonses; or
(iii) to conduct and hear examinations under ss596A or 596B or any, and which, provision of Part 5.9 Division 1 of the Corporations Law?
(b)If no to question 3(a) did, or does (as the case may be), s42(3) of the Corporations (NSW) Act, 1990 or s42(3) of the Corporations (Vic) Act, 1990 and s9(2) of the Jurisdiction of Courts (Cross-Vesting) Act, 1987 (Cth) operate validly to confer upon the Court jurisdiction to:
(i)make the Examination Orders;
(ii)issue the Summonses; or
(iii)to conduct and hear examinations under ss596A or 596B or any, and which, provision of Part 5.9 Division 1 of the Corporations Law?
(c)If no to questions 3(a) and 3(b), did, or does (as the case may be), the Court otherwise have jurisdiction to:
(i)make the Examination Orders;
(ii)issue the Summonses, or
(iii)to conduct and hear examinations under ss596A or 596B and or any, and which, provision of Part 5.9 Division 1 of the Corporations Law?
4.If no to each part of question 3 should an order be made on the application of the Examinees setting aside:
(a)the Examination Orders; and
(b)the Summonses?
5.Are the Applicant Examinees by their Notice of Motion filed 30 August 1995, a copy of which is Annexure "I", entitled to any, and if so what, orders or declarations?'
In the Cortaus proceeding the questions referred by the Chief Justice are as follows:
'1.Do s.4(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (WA) and/or s.9(2) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) operate validly to confer upon the Federal Court of Australia jurisdiction to hear and determine these proceedings?
If the answer to both parts of Question 1 is "no", may the present proceedings validly be cross vested to the Supreme Court of South Australia?'
In the Favelle proceeding the questions referred are the following:
'1.Do section 42 (3) of Corporations (NSW) Act 1990 and section 56(2) of the Corporations Act 1989 (Cth) operate validly to confer upon the Federal Court jurisdiction to determine the applicants' application?
2.If no to question 1, do section 42(3) of Corporations (NSW) Act 1990 and section 9(2) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) operate validly to confer upon the Federal Court jurisdiction to determine the applicants' application?
3.Does the Federal Court of Australia have jurisdiction to entertain the applicants' application?'
It is convenient to consider together questions 1(a), 1(b), 1(c) and 2 in the Amann proceeding, and all questions in the other proceedings since together they concern the validity of the Cross-Vesting Scheme and the cross-vesting provisions of the Corporations Law. Questions 3, 4 and 5 in the Amann proceeding should be considered separately as they raise discrete questions.
The Cross-Vesting Scheme
The Cross-Vesting Scheme is the result, in legislative form, of the desire of the Commonwealth, the States and Territories to establish a system of cross-vesting of jurisdiction between federal, state and territory courts. It followed extensive consultations between the Commonwealth, the States and the Territories, in particular in the Standing Committee of Attorneys-General.
The reasons for the Cross-Vesting Scheme were that litigants had occasionally experienced inconvenience and been put to unnecessary expense, as a result of what some perceived to be uncertainties with respect to the jurisdictional limits of federal, state and territory courts; also the absence of power in those courts to ensure that proceedings which were instituted in different courts, but which ought to be tried together, were tried in the one court. The objective of the Cross-Vesting Scheme was to overcome those problems by vesting federal courts with state jurisdiction and by vesting state
courts with federal jurisdiction, so that no action would fail in a court through lack of jurisdiction, and that as far as possible no court would have to determine the boundaries between federal, state, and territory jurisdictions.
The Commonwealth enacted the Jurisdiction of Courts (Cross-Vesting) Act 1987 ('the Commonwealth Cross-Vesting Act'); and complementary legislation was enacted in each State, and in the Northern Territory. Under the legislation, the Supreme Courts of the States and of the Territories were vested with civil jurisdiction (not criminal jurisdiction, and not certain trade practices and industrial jurisdiction) of the Federal Court and the Family Court, and those two Courts were vested with the full jurisdiction of the Supreme Courts of the States and Territories.
The Cross-Vesting Scheme applies to matters at first instance and to appeals.
The Cross-Vesting Scheme has two basic elements: provisions for the cross-vesting of jurisdiction between federal, state and territory courts; and provisions which enable and direct the transfer of proceedings between those courts. See Acton Engineering Pty Limited v Campbell (1991) 6 ACSR 149 per Lockhart J. at 156-158 for a summary of the Scheme.
Section 4 of the Commonwealth, State and Northern Territory Cross-Vesting Acts is the principal provision which cross-vests jurisdiction between federal, state and territory Courts. Section 4 provides as follows:
'4. (1)Where:
(a)the Federal Court or the Family Court has jurisdiction with respect to a civil matter, whether that jurisdiction was or is conferred before or after the commencement of this Act; and
(b)the Supreme Court of a State or Territory would not, apart from this section, have jurisdiction with respect to that matter;
then:
(c)in the case of the Supreme Court of a State (other than the Supreme Court of the Northern Territory) - that court is invested with federal jurisdiction with respect to that matter; or
(d)in the case of the Supreme Court of a Territory (including the Northern Territory) - jurisdiction is conferred on that court with respect to that matter.
(2)Where:
(a)the Supreme Court of a Territory has jurisdiction with respect to a civil matter, whether that jurisdiction was or is conferred before or after the commencement of this Act; and
(b)the Federal Court, the Family Court or the Supreme Court of a State or of another Territory would not, apart from this section, have jurisdiction with respect to that matter;
jurisdiction is conferred on the court referred to in paragraph (b) with respect to that matter.
(3)Where a proceeding is transferred to the Federal Court, the Family Court or a State Family Court of a State, that court has, by virtue of this subsection, jurisdiction with respect to so many of the matters for determination in the proceeding as that court would not have apart from this subsection.
(4)This section does not apply to a matter arising under:
(a)the Conciliation and Arbitration Act 1904; or
(b)the Industrial Relations Act 1988; or
(ba)the Native Title Act 1993; or
(c)section 46A, 155A or 155B of the Trade Practices Act 1974; or
(d)a provision of Part VI or XII of the Trade Practices Act 1974 so far as the provision relates to section 46A, 155A or 155B of that Act.'
Section 5 of the Cross-Vesting Acts is the principal section concerning the transfer of proceedings between courts. Section 5(1) of each Act deals with the transfer of proceedings from the Supreme Court of a State or Territory to the Federal Court or the Family Court. Other subsections relate to the transfer of proceedings between Supreme Courts (s. 5(2)); between the Supreme Court of a State and a State Family Court of that State (s. 5(3)); from the Federal Court or the Family Court to the Supreme Court of a State or Territory (s. 5(4)); and between the Federal Court and the Family Court (s. 5(5)).
Section 5 provides as follows:
'5.(1)Where:
(a)a proceeding (in this subsection referred to as the "relevant proceeding") is pending in the Supreme Court of a State or Territory (in this subsection referred to as the "first court"); and
(b)it appears to the first court that:
(i)the relevant proceeding arises out of, or is related to, another proceeding pending in the Federal Court or the Family Court and it is more appropriate that the relevant proceeding be determined by the Federal Court or the Family Court;
(ii)having regard to:
(A)whether, in the opinion of the first court, apart from this Act and any law of a State relating to cross-vesting of jurisdiction and apart from any accrued jurisdiction of the Federal Court or the Family Court, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Federal Court or the Family Court;
(B)the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the Commonwealth and not within the jurisdiction of the first court apart from this Act and any law of a State relating to cross-vesting of jurisdiction; and
(C)the interests of justice;
it is more appropriate that the relevant proceeding be determined by the Federal Court or the Family Court, as the case may be; or
(iii)it is otherwise in the interests of justice that the relevant proceeding be determined by the Federal Court or the Family Court;
the first court shall transfer the relevant proceeding to the Federal Court or the Family Court, as the case may be.
(2)Where:
(a)a proceeding (in this subsection referred to as the 'relevant proceeding') is pending in the Supreme Court of a State or Territory (in this subsection referred to as the "first court"); and
(b)it appears to the first court that:
(i)the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of another State or Territory and it is more appropriate that the relevant proceeding be determined by that other Supreme Court;
(ii)having regard to:
(A)whether, in the opinion of the first court, apart from this Act and any law of a State relating to cross-vesting of jurisdiction, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Supreme Court of another State or Territory;
(B)the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the State or Territory referred to in sub‑subparagraph (A) and not within the jurisdiction of the first court apart from this Act and any law of a State relating to cross-vesting of jurisdiction; and
(C)the interests of justice;
it is more appropriate that the relevant proceeding be determined by that other Supreme Court; or
(iii)it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or Territory;
the first court shall transfer the relevant proceeding to that other Supreme Court.
(3)Where:
(a)a proceeding (in this subsection referred to as the "relevant proceeding") is pending in the Supreme Court of a State or the State Family Court of that State (in this subsection referred to as the "first court"); and
(b)it appears to the first court that:
(i)the relevant proceeding arises out of, or is related to, another proceeding pending in the other of the courts referred to in paragraph (a) and it is more appropriate that the relevant proceeding be determined by that other court;
(ii)having regard to:
(A)whether, in the opinion of the first court, apart from this Act and any law of a State relating to cross-vesting of jurisdiction, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the other of the courts referred to in paragraph (a); and
(B)the interests of justice;
it is more appropriate that the relevant proceeding be determined by the other of the courts referred to in paragraph (a); or
(iii)it is otherwise in the interests of justice that the relevant proceeding be determined by the other of the courts referred to in paragraph (a);
the first court shall transfer the relevant proceeding to that other court.
(4)Where:
(a)a proceeding (in this subsection referred to as the "relevant proceeding") is pending in the Federal Court or the Family Court (in this subsection referred to as the "first court"); and
(b)it appears to the first court that:
(i)the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of a State or Territory and it is more appropriate that the relevant proceeding be determined by that Supreme Court;
(ii)having regard to:
(A)whether, in the opinion of the first court, apart from this Act and any law of a State relating to cross-vesting of jurisdiction, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Supreme Court of a State or Territory;
(B)the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the State or Territory referred to in sub‑subparagraph (A) and not within the jurisdiction of the first court apart from this Act and any law of a State relating to cross-vesting of jurisdiction; and
(C)the interests of justice;
it is more appropriate that the relevant proceeding be determined by that Supreme Court; or
(iii)it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of a State or Territory;
the first court shall transfer the relevant proceeding to that Supreme Court.
(5)Where:
(a)a proceeding (in this subsection referred to as the "relevant proceeding") is pending in the Federal Court or the Family Court (in this subsection referred to as the "first court"); and
(b)it appears to the first court that:
(i)the relevant proceeding arises out of, or is related to, another proceeding pending in the other of the courts referred to in paragraph (a) and it is more appropriate that the relevant proceeding be determined by the other of the courts referred to in paragraph (a); or
(ii)it is otherwise in the interests of justice that the relevant proceeding be determined by the other of the courts referred to in paragraph (a);
the first court shall transfer the relevant proceeding to that other court.
(6)Where:
(a)a court (in this subsection referred to as the "first court") transfers a proceeding to another court under a law or laws relating to cross-vesting of jurisdiction; and
(b)it appears to the first court that:
(i)there is another proceeding pending in the first court that arises out of, or is related to, the first-mentioned proceeding; and
(ii)it is in the interests of justice that the other proceeding be determined by the other court;
the first court shall transfer the other proceeding to the other court.
(7)A court may transfer a proceeding under this section on the application of a party to the proceeding, of its own motion or on the application of the Attorney-General of the Commonwealth or of a State or Territory.
(8)A person who is entitled to practise as a barrister or a solicitor, or as both a barrister and a solicitor, in a court has, if a proceeding (in this subsection referred to as the "transferred proceeding") in that court is transferred to another court under a law or laws relating to cross-vesting of jurisdiction, the same entitlement to practise in relation to:
(a)the transferred proceeding; and
(b)any other proceeding out of which the transferred proceeding arises or to which the transferred proceeding is related, being another proceeding that is to be determined together with the transferred proceeding;
in the other court that the person would have if the other court were a federal court exercising federal jurisdiction.'
Section 9(2) of the Commonwealth Cross-Vesting Act specifically authorizes the exercise by the Federal Court, the Family Court, and the Supreme Court of a Territory, of jurisdiction conferred under the Cross-Vesting legislation of the States. Section 9(1) of the CommonwealthCross-Vesting Act prevents inconsistency, within the meaning of s. 109 of the Constitution, from arising between the state legislation and the various commonwealth Acts which confer jurisdiction on federal and territory courts.
Section 9 reads as follows:
'9. (1)Nothing in this or any other Act is intended to override or limit the operation of a provision of a law of a State relating to cross-vesting of jurisdiction.
The Federal Court, the Family Court or the Supreme Court of a Territory may:
(a)exercise jurisdiction (whether original or appellate) conferred on that court by a provision of this Act or of a law of a State relating to cross-vesting of jurisdiction; and
(b)hear and determine a proceeding transferred to that court under such a provision.'
The Corporations Law
The Corporations Law commenced on 1 January 1991. Prior to its commencement, matters concerning company law, takeovers, securities, futures and co-operative schemes were all within the ambit of the Cross-Vesting Scheme. Under the Corporations Law a new regime was established for matters arising under the Corporations Law and associated legislation. The Corporations Laws of the Commonwealth, the States and the Northern Territory, which together constitute the Corporations Law, contain their own cross-vesting provisions (Part 9 of the Corporations Act 1989 (Cth), and of the complementary legislation passed by the States and the Northern Territory).
The Corporations Law states that it operates to the exclusion of the Cross-Vesting Scheme with respect to civil matters arising under the Corporations Law (s. 49(1) of the Commonwealth Act and s. 40(1) of the state and Northern Territory Acts). Essentially, the cross-vesting provisions of the Corporations Law mirror the Cross-Vesting Scheme.
The explanatory memorandum to the Commonwealth Corporations Legislation Amendment Bill 1990 states that the purpose of the cross-vesting provisions of the Corporations Law is 'to permit relatively simple administration and enforcement of the Corporations Law'; and with particular reference to the cross-vesting provisions, to operate independently of the Cross-Vesting Scheme. The explanatory memorandum states that the cross-vesting provisions were introduced both to 'enhance the national character of the new scheme' and 'to take account of the unique character of the jurisdictional apparatus under the applied law regime'; and that they were 'central to the conferment of a national character' on the whole scheme.
Probably the basic reason for the Corporations Law containing its own cross-vesting provisions is because the Commonwealth, the States and the Northern Territory desired
that the Corporations Law be a single, comprehensive and complete national code relating to matters concerning corporations, securities and futures.
Section 3(1) of the Commonwealth Corporations Act states that its object (other than Part 8) is to make a law for the Government of the Australian Capital Territory in relation to corporations, securities, the futures industry and some other matters. Section 3(2) provides that the Act has effect, and is to be interpreted, accordingly. Part 8 is concerned with the national administration and enforcement of the Corporations Law.
The critical provisions of the Corporations Law, so far as the present issues are concerned, are s. 42(3) of the New South Wales and Victorian Acts, and s. 56(2) of the Commonwealth Act.
Section 56(2) of the Commonwealth Corporations Act provides that the Federal Court may exercise jurisdiction (whether original or appellate) conferred on that Court by a law of a State corresponding to Division 1 of Part 9 of the Commonwealth Corporations Act, with respect to matters arising under the Corporations Law of a State.
Section 56(1) of the Commonwealth Corporations Act must be mentioned. It provides that nothing in that or any other
Act is intended to override or limit the operation of a provision of a law of a State or Territory relating to cross-vesting of jurisdiction with respect to matters arising under the Corporations Law of a State or Territory.
Section 42(1) of the New South Wales and Victorian Corporations Acts provides that, subject to s. 9 of the Administrative Decisions (Judicial Review) Act 1977 of the Commonwealth, as it applies as a law of New South Wales and Victoria, jurisdiction is conferred on the Supreme Court of New South Wales and Victoria, and of each other State and the Australian Capital Territory, with respect to civil matters arising under the Corporations Law of New South Wales and Victoria.
Section 42(3) of the same legislation provides that jurisdiction is conferred on the Federal Court with respect to civil matters arising under the Corporations Law of New South Wales and Victoria.
There is no definition of the phrase 'civil matters arising under the Corporations Law' other than the definition contained in s. 49(1)(a) of the Commonwealth Corporations Act and s. 40(1)(a) of the State and Northern Territory Acts, namely, that 'civil matters' for these purposes means 'matters other than criminal matters'.
The arguments of the parties and interveners
The following is a summary of the arguments of the parties who contend that ss. 42(3) of the New South Wales and Victorian Corporations Acts; s. 56(2) of the Commonwealth Corporations Act and s. 9(2) of the Commonwealth Cross-Vesting Act are invalid. My findings follow in the next section entitled 'Findings'.
.Whilst the Commonwealth Parliament has power, pursuant to s. 77(iii) of the Constitution, to invest any court of a State with federal jurisdiction, there is no corresponding power in the Constitution for a State to invest a federal court with state jurisdiction.
.The Commonwealth's power to create federal courts and define their jurisdiction (apart from the power to confer jurisdiction on territory courts under s. 122) is confined under s. 77(i) of the Constitution to matters which come within federal jurisdiction as set out in ss. 75 and 76 of the Constitution. Reliance was placed on In Re Judiciary and Navigation Acts (1921) 29 CLR 257 especially at 265; R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 at 270 and 290; Polyukhovich v The Commonwealth (1991) 172 CLR 501 at 606 and 626; Mellifont v Attorney-General for the State of Queensland (1991) 173 CLR 289 at 312-314; Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1 at 26-27; and West Australian Psychiatric Nurses' Association (Union of Workers) v Australian Nursing Federation (1991) 30 FCR 120 at 131-132.
.The power vested in the Commonwealth Parliament by s. 77(iii) of the Constitution was intended to enable the Commonwealth Parliament to invest state courts with federal jurisdiction, that is the jurisdiction contained in ss. 75 and 76 of the Constitution. It does not authorize legislation giving jurisdiction, other than federal jurisdiction, to state courts: Le Mesurier v Connor (1929) 42 CLR 481 at 496; and Queen Victoria Memorial Hospital v Thornton (1953) 87 CLR 144 at 152.
.It would be strange if, in the absence of any such express power, state parliaments, exercising their general legislative powers, could 'conscript' federal courts to exercise state judicial power, and, even stranger, if state parliaments could 'conscript' federal courts to exercise state non-judicial power.
.These general principles support the view that s. 42(3) of the Corporations Acts of the States and of the Northern Territory, which purports to confer jurisdiction on the Federal Court with respect to civil matters arising under the Corporations Law, and s. 56(2) of the
Commonwealth Corporations Act, which purports to empower the Federal Court to exercise such state jurisdiction, are invalid. It is likewise for s. 9(2) of the Commonwealth Cross-Vesting Act and s. 4(1) of the West Australian Cross-Vesting Act.
Further arguments were advanced to support the invalidity of the statutory provisions previously mentioned:
.The object of the Commonwealth Corporations Act is to make a law for the Government of the Australian Capital Territory in relation to corporations, securities, the futures industry and certain other matters, and it is to be interpreted accordingly (ss. 3(1) and (2)). Section 56(2) of the Commonwealth Corporations Act ought not to be interpreted as a general acceptance by the Commonwealth Parliament of jurisdiction conferred on the Federal Court by s. 42(3) of the State Corporations Acts. Rather, it should be read as a provision of a law for the Government of the Australian Capital Territory in relation to corporations, and interpreted accordingly.
.Even if the immediately preceding argument is rejected, s. 56(2) of the Commonwealth Corporations Act does not purport to confer jurisdiction on the Federal Court; it purports to effectively validate the conferral of jurisdiction on the Federal Court by laws of the States.
Hence, the jurisdiction cannot be exercised by the Federal Court if for no other reason than it is not original jurisdiction vested in it by a law of the Commonwealth Parliament, and it is therefore not within the ambit of s. 19 of the Federal Court Act which provides as follows:
'19. (1)The Court has such original jurisdiction as is vested in it by laws made by the Parliament.
(2)The original jurisdiction of the Court includes any jurisdiction vested in it to hear and determine appeals from decisions of persons, authorities or tribunals other than courts.'
.The decision of the High Court in R v Duncan; Ex parte Australian Iron and Steel Pty Limited (1983) 158 CLR 535 does not support the validity of the relevant sections. The High Court in that case expressed the view that there was no general constitutional prohibition on the Commonwealth or the States jointly empowering an administrative tribunal (in that case the Joint Coal Tribunal) to exercise powers which neither Parliament could alone constitutionally confer, but which came within their combined constitutional competence. In that case, Chapter III of the Constitution was not applicable, so the decision is of no assistance in the present case.
.By s. 42(3) of the State Corporations Acts and s. 4(1) of the Cross-Vesting Act of Western Australia, the States have sought to 'conscript' the Federal Court to exercise state jurisdiction. In so doing they have sought to bind the Commonwealth, which is impermissible: The Commonwealth v Cigamatic Pty Limited (In Liq.) (1962) 108 CLR 372; and the West Australian Psychiatric Nurses' Association Case.
.Question 1(b) (in the Amann proceeding) involves s. 9(2) of the Commonwealth Cross-Vesting Act. It was argued that s. 40(1) of the State Corporations Acts provides that Part 9 Division 1 confers jurisdiction in respect of civil matters arising under the Corporations Law to the exclusion of the cross-vesting legislation. This is a clear legislative indication, at least by the State Parliaments, that the co-operative scheme embodied in the cross-vesting legislation is not intended to operate in relation to cross-vesting of civil jurisdiction under the Corporations Law.
.Similarly, s. 56 of the Commonwealth Corporations Act evidences an intention that the jurisdiction of the Federal Court to exercise civil jurisdiction arising under the Corporations Law of a State is intended to be determined by the reciprocal interaction between that section and s. 42 of the State corporations legislation.
The respondents and the interveners sought to support the validity of the Cross-Vesting Scheme and the Corporations Law by arguments which I summarize as follows:
The Cross-Vesting Scheme
.Section 4(1) of the State Cross-Vesting Acts are valid laws of the States. It is for the peace, order and good government of a State to legislate pursuant to a co-operative scheme with the other States and the Commonwealth, to confer jurisdiction on a court to deal with a state matter in order to overcome difficulties with divided jurisdiction of courts.
.The Commonwealth, in s. 9(2) of the Commonwealth Cross-Vesting Act, has consented to the conferral of such jurisdiction, but does not itself in that section confer state jurisdiction.
.Together these provisions are effective and sufficient to enable the conferral on the Federal Court of state jurisdiction, pursuant to the Cross-Vesting Scheme, and to enable the Federal Court to hear and determine proceedings alleging contravention of the Companies Codes of the States (which preceded the Corporations Law) and breaches of equitable obligations. The cross-vesting legislation is conducive to the achievement of a legitimate federal purpose, involving reciprocal
conferral of jurisdiction on federal and state courts to avoid jurisdictional uncertainty.
.The legislation gives effect to a constitutional objective of Commonwealth/State co-operation.
.It is open to the Commonwealth to confer on its courts a capacity to receive such additional powers and functions as may be conferred by another legislature, subject to any express or implied limitations in the Constitution. For the Commonwealth and the States to provide for the powers and functions of courts under their laws to be exercisable by the courts of another polity is to exercise their legislative powers in a way that is complementary to each other. This is permissible under the Constitution, and reliance was placed upon Duncan and Re Cram; Ex parte NSW Colliery Proprietors' Association Limited (1987) 163 CLR 117 at 127-131. The fact that the present case concerns federal courts and not tribunals makes no difference.
.It is true that Chapter III of the Constitution is exhaustive in relation to defining the federal jurisdiction that may be vested in federal courts, but it does not define or limit other jurisdiction which may be conferred on a federal court within the federal system. It is not exhaustive in relation to the conferral of non-
federal judicial power on such courts.
.The Boilermakers Case established that the judicial power of the Commonwealth must be exercised by a Chapter III court and that such a court could not exercise non-judicial functions such as conciliation and arbitration. It did not decide that the only judicial power able to be exercised by a Chapter III court is the judicial power of the Commonwealth. Nor does the In Re Judiciary and Navigation Acts Case stand as contrary authority. State law, no more than Commonwealth law, cannot authorize a federal court to engage in non-judicial functions or authorize a federal court to exercise non-federal judicial power in a manner inconsistent with the essential character of a court. In this way the fundamental principles of the Boilermakers Case concerning the separation of powers are preserved.
.The cross-vesting legislation of the States limits the matters cross-vested to 'State matters' as defined in s. 3(1). The reference to 'matters' does not include conferral of non-judicial functions, such as advisory opinions; and in any event it should be read down if necessary to that effect: s. 15 of the State and Commonwealth Cross-Vesting Acts.
.Just as the Commonwealth must take state courts as it finds them when it confers federal jurisdiction upon them, a state law that confers jurisdiction on federal courts must take those courts as it finds them. There is no impermissible interference with an instrumentality of the Commonwealth by the law of a State where the Commonwealth consents to the exercise of the State's power. It is not correct to describe this as 'conscripting' a federal body, particularly given the power to transfer proceedings.
.The provisions of s. 9(2) of the Commonwealth Cross-Vesting Act are effective to avoid any inconsistency between a law of the Commonwealth and a law of the State that would bring into operation s. 109 of the Constitution; and reliance was placed on Duncan.
.Section 71 of the Constitution vests power in the Commonwealth Parliament to make laws permitting courts to be created by Commonwealth law, such as the Federal and Family Courts. Exercise of jurisdiction conferred on them by a State Parliament is incidental to the power to make laws creating federal courts, and so it falls under the legislative power implied by s. 71.
The Corporations Law
With respect to the Corporations Law, the submissions in
support of validity, in addition to those mentioned above concerning the Cross-Vesting Scheme, were to the effect that:
.The national Corporations Law contains a self-contained Cross-Vesting Scheme.
.The conferral of jurisdiction over civil matters should be interpreted as not extending to the conferral of non-judicial powers. The provisions operate validly to confer jurisdiction on the Federal Court with respect to civil matters under the State Corporations Acts.
Findings
The Constitution provides in s. 71 that the judicial power of the Commonwealth may be vested in the High Court, and in such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction. Section 77 empowers the Commonwealth Parliament to make laws defining the jurisdiction of federal courts other than the High Court (s. 77(i)), to define the extent to which the jurisdiction of federal courts is exclusive of that which is invested in state courts (s. 77(ii)), and to invest state courts with federal jurisdiction with respect to any of the matters mentioned in ss. 75 and 76 (s. 77(iii)). Such conferral of power may be made by the Commonwealth Parliament without the consent of the Parliaments of the States concerned. The purpose of the express inclusion of s. 77(iii)
in the Constitution probably was to make it clear that the exercise of the power thereby conferred upon the Commonwealth Parliament did not depend upon consent of the State Parliaments for its efficacy.
But at the same time, the presence of s. 77(iii) does not imply an absence of power in the State Parliaments, with the consent of the Commonwealth Parliament, to confer jurisdiction in state matters on federal courts.
In my opinion, in the context of a co-operative scheme between the Commonwealth and State Parliaments and embodied in the legislation of each, the Commonwealth Parliament is competent to permit federal courts and tribunals to receive and to exercise powers conferred by the State Parliaments, subject to the following:
(a)any restraints or limitations that may be imposed in the Constitution, express or implied;
(b)the state jurisdiction being similar to that conferred on the States by the Commonwealth Parliament; and
(c)the conferral of state jurisdiction being conducive to or consistent with the achievement of the object which the conferral of jurisdiction on federal courts or tribunals by the Commonwealth is intended to achieve.
It is permissible for the Commonwealth and the States to enact legislation which provides for the powers and functions which may be exercised by federal courts created by the Commonwealth Parliament, and by state courts created by the State Parliaments, in circumstances where by acting in co-operation each:
'supplies the deficiencies in the power of the other, and so that together they may achieve, subject to such limitations as those provided by s. 92 of the [Commonwealth] Constitution, a uniform and complete legislative scheme'
(Duncan per Gibbs CJ at 552).
The Commonwealth Constitution is a compact between the States and the Commonwealth which divides legislative powers between the Commonwealth Parliament and the State Parliaments. The Constitution:
'contemplates that there will be joint co-operative legislative action to deal with matters that lie beyond the powers of any single legislature'
(Duncan per Mason J at 560).
As Deane J. said at 589 in Duncan, one of two related general propositions:
'... to be derived from the terms of the Australian Constitution and from the nature of the federation which it embodies ... is that co-operation between the Parliaments of the Commonwealth and the States is in no way antithetic to the provisions of the Constitution: to the contrary, it is a positive objective of the Constitution.'
And as Brennan J said at 579-580 in Duncan:
'It is within the competence of the Commonwealth Parliament to permit such a [federal] tribunal to have and to exercise State powers where the vesting and exercise ... is conducive to or consistent with the achievement of the object which the vesting and exercise of federal powers is intended to achieve. It is no argument against the validity or efficacy of co-operative legislation that its object could not be achieved or could not be achieved so fully by the Commonwealth alone.'
Brennan J cited the following passage from the judgment of Starke J in Deputy Federal Commissioner of Taxation (NSW) v W R Moran Pty Limited (1939) 61 CLR 735 at 774:
'Co-operation on the part of the Commonwealth and the States may well achieve objects that neither alone could achieve; that is often the end and the advantage of co-operation. The court can and ought to do no more than inquire whether any thing has been done that is beyond power or is forbidden by the Constitution.'
Brennan J then proceeded to say:
'A provision would be beyond the legislative competence of the Commonwealth if it purported to confer a federal power either wider than the Constitution permits or free from any restriction on its exercise which the Constitution requires; ...'
Gibbs CJ also said at 552-3 in Duncan:
'[N]o reason is provided by constitutional enactment or constitutional principle why the Commonwealth and a State or States should not simultaneously confer powers on one person and empower that person to exercise any or all of those powers alone or in conjunction. In one instance the Constitution has expressly recognized the possibility of co-operation of that kind when it enables the Parliament to invest a court of a State with federal jurisdiction: Constitution, ss. 71, 77(iii). It would be an absurd result, for example, if the Commonwealth and a State were unable, by complementary legislation, to empower an officer of police to enforce both the laws of the Commonwealth and the laws of the State, or to give power to a fisheries inspector to act in Australian waters both within and beyond territorial limits, or to authorize a public servant to collect State taxes as well as Commonwealth taxes. The position of an administrative body such as the Tribunal is no different; legislation of the Commonwealth Parliament, otherwise within power, is not invalid because it establishes, jointly with a State, one body which derives its powers from the State as well as from the Commonwealth.'
And Mason J said at 562-3 in Duncan:
'[A]s at present advised, I see no strong reason why the Commonwealth Parliament in the exercise of the conciliation and arbitration power (s. 51(xxxv)) and the trade and commerce power (s. 51(i)) cannot establish a tribunal with powers and functions appropriate to the exercise of those powers and declare that the tribunal has the capacity to exercise such conciliation and arbitration powers and functions as may be given to it by a State Parliament, so that powers derived from both sources may be exercised in relation to the one dispute or matter.
... [T]he Constitution, when it divides legislative powers between the Parliaments of the Commonwealth and the States, necessarily contemplates that there will be joint co-operative legislative action to deal with matters that lie beyond the competence of any single legislature ... Commonwealth legislative action for such a purpose is subject to the limitation that the end to be achieved and the means by which it is to be achieved are consistent with and do not contravene the Constitution. It is an integral element in joint legislation for a co-operative purpose that a legislature, whether Commonwealth or State, can give its authority or office holder a capacity to receive additional powers and functions as may be conferred by another legislature.
One potential problem which the qualification mentioned calls forth is that of inconsistency between Commonwealth and State laws bringing into operation s. 109 of the Constitution. This problem can be alleviated, if not eliminated, by a manifestation of intention in the Commonwealth law that it is not intended to occupy the field to the exclusion of State law. Indeed, the potential for inconsistency and the need to avoid it co-operative legislative action is perhaps another reason for saying that the Commonwealth Parliament can give its authority ... the capacity to receive additional power from a State ...'
Duncan was concerned with the question whether the Coal Industry Tribunal, established by the Coal Industry Act 1946 (Cth) and the Coal Industry Act 1946 (NSW), was validly constituted. Commonwealth and state legislation was enacted, following an agreement between the Commonwealth Government and the Government of New South Wales, that they would jointly establish authorities with power to take action to secure and maintain adequate supplies of coal throughout Australia and in trade with other countries.
The High Court (Mason CJ, Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ) later said in Cram at 127-8 that the Coal Industry Tribunal exercised state powers because, and only because, it was so authorized by the commonwealth Act. The High Court also cited with approval observations made by Brennan J in Duncan at 579-580, a portion of which is set out above, concerning the necessity for authorization by commonwealth Act for the Tribunal's exercise of power conferred by a state Act.
In my opinion, although Duncan and Cram both concern the question of the validity of commonwealth legislation which permitted an executive body created by commonwealth legislation to exercise functions conferred upon it by state legislation, their Honours' reasoning and conclusions are applicable equally to the question of the validity of the Cross-Vesting Scheme and the cross-vesting provisions of the Corporations Law, which permit courts created by the Commonwealth Parliament to exercise jurisdiction conferred on them by the State Parliaments, subject to the qualifications to which reference has already been made.
Leaving aside the first qualification for the moment, in this instance the jurisdiction which the Commonwealth Cross-Vesting Act and the Commonwealth Corporations Act permit the Federal and Family Courts to have conferred upon them by the State Parliaments is similar to that conferred on the State Supreme Courts by the Commonwealth Parliament. Also, the jurisdiction conferred on the Federal Court and the Family Court by the State Parliaments is plainly conducive to, or consistent with, the achievement of the object which the vesting by the Commonwealth Parliament and the exercise of federal powers is designed to achieve.
It must be in the interests of both the Commonwealth and the States (and the Northern Territory) to legislate pursuant to a co-operative scheme with each other to confer jurisdiction to deal with matters on their respective courts in order to overcome perceived difficulties with divided jurisdictions of the courts.
It is also important to note in this connection that s. 9(2) of the Commonwealth Cross-Vesting Act does not confer state jurisdiction upon federal courts; obviously this could
not be done. What it does is to consent to the conferral by the State Parliaments upon federal courts of the jurisdiction which they in turn have conferred upon their courts. Both sets of legislation (the Cross-Vesting Scheme and the Corporations Acts) are intended to achieve a legitimate purpose, involving the reciprocal conferral of jurisdiction on federal and state courts, to avoid uncertainties with respect to the jurisdiction of each.
Counsel for the Attorney-General for New South Wales put as one of his arguments (briefly mentioned earlier), in support of the Commonwealth legislation's validity, that s. 77(i) of the Constitution impliedly empowered the Commonwealth Parliament to authorize federal courts to receive state jurisdiction. Notwithstanding his able argument, I prefer to rest my reasons on the principles mentioned above and express no view on this particular question.
What bar does the Constitution provide to the grant by the Commonwealth Parliament of legislative permission for the Federal and Family Courts to have conferred on them jurisdiction by the Parliaments of the States?
I reject the arguments put by the parties seeking to invalidate the legislation, based on Chapter III of the Constitution. It is true that Chapter III is exhaustive in relation to the definition of federal jurisdiction that may be
vested by the Commonwealth Parliament in a federal court. But the Commonwealth Parliament has undoubted power pursuant to s. 122 of the Constitution (the Territories' power) to confer jurisdiction on courts created by the Commonwealth Parliament, although that is not federal jurisdiction: Capital TV and Appliances Pty Limited v Falconer (1971) 125 CLR 591 per Barwick CJ at 599 and Menzies J at 606-607; and West Australian Psychiatric Nurses' Association per Lee J at 132. Appellate jurisdiction has also validly been conferred on the High Court pursuant to s. 122 of the Constitution: R v Bernasconi (1915) 19 CLR 629; Spratt v Hermes (1965) 114 CLR 226; and Capital TV. Chapter III is silent on the question of conferral of state judicial power on federal courts. It does not prohibit or limit jurisdiction of that kind from being conferred on federal courts.
The cases to which we were referred, in particular In Re Judiciary and Navigation Acts and Boilermakers, support the proposition that Chapter III provides exclusively for the federal jurisdiction which may be conferred on courts exercising the judicial power of the Commonwealth. But the observations in the cases are confined to the conferral of federal jurisdiction. They do not deal with the question which has arisen in this case; nor, in my opinion, can the judgments be read as having that in contemplation.
As explained in Boilermakers at 274, the In Re Judiciary and Navigation Acts Case turned on the question whether s. 88 of the Judiciary Act 1903, which purported to give the High Court jurisdiction to 'hear and determine' any question referred to it by the Governor-General concerning the validity of any enactment of the Commonwealth Parliament, and whether s. 93, which purported to make the determination 'final and conclusive and not subject to any appeal', were valid exercises of the legislative power of the Commonwealth Parliament. It was held by a majority of the High Court that it was not, but on the ground that the function purported to be conferred was non-judicial and thus outside any legislative power of the Commonwealth.
It was held by the High Court in Boilermakers that the judicial power of the Commonwealth must be exercised by a Chapter III court and that such a court cannot exercise non-judicial functions, such as conciliation and arbitration.
But Boilermakers is not inconsistent with the principle that the Parliaments of constituent elements of the Federation may co-operate and agree that a Chapter III court should have a further jurisdiction to decide matters in the exercise of judicial power which may not be federal jurisdiction.
In my view neither of these cases has any direct relevance to the questions presently before the Court, except
to the question whether conferral of state jurisdiction upon federal courts would involve conferring non-judicial power upon federal courts, a question to which I shall return.
The other cases to which reference was made, in particular Spratt v Hermes and Capital TV, all relate to questions concerned with the judicial power of the Commonwealth and do not touch the question whether judicial power, other than judicial power of the Commonwealth, can be conferred on a federal court. Indeed, there are some passages from the judgments of the High Court in Spratt v Hermes at 239-40, 257 and 268, and Capital TV at 598-9 and 604, which point in the contrary direction.
Nor does Cigamatic stand in the path of the validity of the legislation. Cigamatic is not authority for the proposition that the State Parliaments cannot confer jurisdiction on federal courts with the consent of the Parliament of the Commonwealth, especially when Cigamatic is considered in the light of the later decisions of the High Court in Duncan and Cram; see also Jacobsen v Rogers (1995) 69 ALJR 131 at 137-8; and R v Humby; Ex parteRooney (1973) 129 CLR 231 at 240, 246 and 251. The Cigamatic principle has no operation when the Commonwealth legislates to permit state law to invest courts or tribunals of the Commonwealth with state jurisdiction, subject to the qualifications mentioned earlier. But see the West Australian Psychiatric Nurses' Association
Case at 132-133.
A further point worth making is that under the Nauru High Court (Appeals) Act 1976 (Cth) jurisdiction had been conferred (before independence) on the High Court to hear appeals from judgments of the Supreme Court of Nauru. On at least two occasions the High Court exercised that jurisdiction: DPP (Nauru) v Fowler (1984) 154 CLR 627; and Amoe v DPP (Nauru) (1991) 66 ALJR 29. On neither occasion was there any challenge to the Court's jurisdiction. But federal courts are obliged to satisfy themselves that they have jurisdiction, even when the issue is not raised by the parties before them: see Cockle v Isaksen (1957) 99 CLR 155 at 161. If the external affairs power authorizes the Commonwealth Parliament to invest the High Court with jurisdiction to hear appeals from decisions of courts outside Australia, it is difficult to see why that does not apply to other federal courts.
Also, as mentioned earlier, the Territories' power (s. 122) authorizes the Commonwealth Parliament to invest courts created by it with the jurisdiction to hear appeals from the Supreme Courts of the Territories of Australia. So it is not correct to say that the only jurisdiction that may be exercised by federal courts is jurisdiction conferred under ss. 75, 76 and 77 of the Constitution.
The view that Chapter III of the Constitution does not prevent non-federal jurisdiction being vested in a federal court was supported by the Supreme Court of Queensland (Ryan J) in Re T (an infant), 17 October 1988, [1990] 1 Qd.R. 196 at 198-199. But Gummow J expressed reservations about the correctness of Re T in Grace Bros Pty Ltd v Magistrates, Local Court of New South Wales (1988) 84 ALR 492 at 498. See also the judgment of Gummow J in Re Truman; Ex parte Natwest Investments Australia Pty Limited, unreported, 14 February 1990, at 10 and 11. In Australian Trade Commission v Film Funding & Management Pty Limited (1989) 24 FCR 595 Gummow J did not consider it the appropriate occasion to pursue the question further (at 599), but he said (also at 599) that the notion of the law of one legislature conferring jurisdiction, and the law of another legislature allowing it to be exercised suggested 'a symbiotic relationship between the two laws, neither having its own independent life'. His Honour's observations were made in the context of considering ss. 122 and 109 of the Constitution.
Articles by learned authors have examined aspects of the Cross-Vesting Scheme and the Corporations Law and considered the constitutional implications of them: see Keith Mason QC and James Crawford, 'The Cross-vesting Scheme', 62 ALJ 328 especially at 333 and 334; Gavan Griffith QC, Dennis Rose and Stephen Gageler, 'Further Aspects of the Cross-vesting Scheme', 62 ALJ 1016 especially at 1023-1025; H G Fryberg QC,
'Cross-Vesting of Jurisdiction', 17(2) Qld LSJ 113; Clifton Baker, 'Cross-vesting of jurisdiction between state and federal courts', 14(2) U Qld LJ 118; Dorothy Kovacs, 'Cross-Vesting of Jurisdiction - New Solutions or New Problems?', 16 MULR 669; Bernard O'Brien, 'The Constitutional Validity of The Cross-Vesting Legislation', 17 MULR 307; Enid Campbell, 'Cross-vesting of Jurisdiction in Administrative Law Matters', 16 Mon LR 1; G J Lindell, 'The Cross-Vesting Scheme and Federal Jurisdiction Conferred upon State Courts by the Judiciary Act 1903 (Cth)', 17 Mon LR 64; Herbert Johnson, 'Historical and Constitutional Perspectives on Cross-Vesting of Court Jurisdiction', 19 MULR 45; Garrie J Maloney and Susan McMaster, 'Cross-Vesting of Jurisdiction', August 1992, The Australian Institute of Judicial Administration; Clarence Stevens QC and Stephen Gageler, 'Review of Cross-vesting Legislation', 12 Aust Bar Rev 14.
See also the explanatory memorandum to the Jurisdiction of Courts (Cross-Vesting) Bill 1987 (Cth); and the Second Reading Speech of the Attorney-General to the House of Representatives on 22 October 1986, Hansard 2555.
On this point, the Report of the Australian Judicial System Advisory Committee of the Constitution Commission, 22 May 1987, said in paragraph 3.114 that the Committee doubted the constitutional validity of the Commonwealth conferring, or agreeing to the conferral by the States, of jurisdiction on a
federal court where the jurisdiction in question was not within ss. 75 or 76 of the Constitution. The Committee concluded that the cross-vesting of jurisdiction should proceed either by reference of powers under s. 51(xxxvii) of the Constitution or amendment to the Constitution.
The Final Report of the Constitutional Commission, 1988, vol 1 at paragraphs 6.33 to 6.38, as I read it, agreed with the Advisory Committee that there were doubts about these matters; but was probably tentatively of the contrary opinion about the validity of the proposals.
The parties seeking to strike down the two schemes also relied on s. 51(xxxvii).
The Commonwealth Parliament has power to legislate within respect to matters referred to it by the Parliaments of the States (s. 51(xxxvii); but I do not regard the existence of that power as an indication in the Constitution that the Parliaments of the States may not invest federal courts with state jurisdiction pursuant to a national legislative scheme such as the Cross-Vesting Scheme and the Corporations Law.
Further, I do not agree that the Cross-Vesting Scheme or the cross-vesting provisions of the Corporations Law create the potential for non-judicial power to be conferred on a federal court, thus infringing the doctrine of separation of
powers established by NSW v The Commonwealth (1915) 20 CLR 54 and Boilermakers.
The Commonwealth must take state courts as it finds them, so must the States take federal courts as they find them. When the Commonwealth Parliament invests state courts with federal jurisdiction pursuant to Chapter III of the Constitution, it cannot interfere with state instrumentalities by a commonwealth law. Equally, a state law which confers jurisdiction on a federal court cannot interfere with federal courts by their state law, even if the Commonwealth has consented to the exercise by its courts of state jurisdiction.
Further, in s. 3(1) of the Cross-Vesting legislation of the States, the matters that may be cross-vested to federal courts are 'State matters' as defined in that sub-section. In my opinion the reference to 'matters' cannot include the conferral of non-judicial functions, such as advisory opinions, upon federal courts. It is not necessary to read this definition down for this purpose; but if it were necessary to do so, I would rely upon s. 15 of the Commonwealth and State Cross-Vesting Acts: see the judgment of Ryan J in Re T at 199.
It is not open to the State Parliaments to confer on federal courts, even with the concurrence of the Commonwealth Parliament, any jurisdiction which is non-judicial in
character. A further reason to support this proposition is that non-judicial jurisdiction would not be 'similar' to the jurisdiction conferred on federal courts by the Commonwealth Parliament (to adopt the language of Brennan J in Duncan). However, no such attempt has been made by the State Parliaments in the Cross-Vesting Schemes or Part 9 of the Corporations legislation of the States.
I turn to the argument based on s. 19 of the Federal Court Act which provides that the Federal Court has such original jurisdiction as is vested in it by laws made by the Commonwealth Parliament. The argument is that, as it is State Parliaments which purport to confer jurisdiction on the Federal Court and the Family Court, s. 19 cannot apply, and there is no other source of the jurisdiction of the two federal courts. I have read, and agree with, what Lindgren J. says on this question.
I would therefore answer the questions thus far considered as follows:
Amann
Question 1(a): 'Yes'.
Question 1(b) and (c) and 2: 'These questions do not arise'.
Cortaus
Question (1): 'Yes'.
Question (2): 'This question does not arise'.
Favelle
Question (1): 'Yes'.
Question (2): 'This question does not arise'.
Question (3): 'Yes'.
I turn to question 3(a) in the Amann proceeding which, although repetitious, it is convenient to recite:
'3.(a)DID OR DOES (AS THE CASE MAY BE) s. 42(3), OF THE CORPORATIONS (NSW) ACT, 1990 OR s. 42(3) OF THE CORPORATIONS (VIC) ACT, 1990 AND s. 56(2) OF THE CORPORATIONS ACT, 1989 (CTH) OPERATE VALIDITY TO CONFER UPON THE COURT JURISDICTION TO:
(i)MAKE THE EXAMINATION ORDERS;
(ii) ISSUE THE SUMMONSES; OR
(iii)TO CONDUCT AND HEAR EXAMINATIONS UNDER ss. 596A OR 596B OR ANY, AND WHICH, PROVISION OF PART 5.9 DIVISION I OF THE CORPORATIONS LAW?'
It was argued on behalf of Amann that the Federal Court does not have the power to make examination orders, to issue summonses, or to conduct and hear examinations under s. 596A or s. 596B of the Corporations Law because they are not judicial powers. Reference was made in support of the argument to Hamilton v Oades (1989) 166 CLR 486 per Mason CJ at 496-7, where his Honour said that the nature of an examination under those sections is essentially an administrative examination designed to serve two important public purposes: one, to enable the liquidator (now an 'eligible applicant') or the ASC to gather information which will assist in the winding up or administration of a company which involves protecting the interests of creditors; the other, to enable evidence and information to be obtained to support the bringing of criminal charges in connection with a company's affairs. So, it is not a court hearing in the true sense.
In my opinion Hamilton v Oades does not support the argument that the powers in question may not be exercised by a federal court established under Chapter III of the Constitution. A federal court, in the exercise of its judicial power, may deal with matters incidental to the exercise of that power, even if considered independently of judicial power those matters may be regarded as administrative. The Court's power should not be circumscribed in a narrow way: Queen Victoria Memorial Hospital at 151; and Boilermakers at 278.
It is important to consider the character of the body in which the power is vested, and the purpose for which it is intended to be conferred, in order to determine the true nature of the power: Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 at 175-7; and Re Ranger Uranium Mines Pty Limited; Ex parte Federated Miscellaneous Workers' Union of Australia (1987) 163 CLR 656 at 666.
Powers of the kind impugned in this case have invariably and consistently been regarded as powers that are appropriate for discharge by courts. They have been traditionally exercised by courts. These powers are being exercised in relation to companies that are the subject of winding up orders, where the exercise of such powers are incidental to the courts' general supervisory jurisdiction in the winding up of companies: R v Davison (1954) 90 CLR 353 at 368.
It must also be remembered that there is no clear line of demarcation between judicial functions and administrative functions: 'functions may be classified as either judicial or administrative according to the way in which they are to be exercised': R v Hegarty; Ex parte: The Corporation of the City of Salisbury (1981) 147 CLR 617 at 628; and Precision Data Holdings Limited v Wills (1991) 173 CLR 167 at 189.
The examination orders, summonses and proposed examination which are the subject of this challenge are in truth but part of the processes that follow from the making of the winding up order, and which ultimately protect and adjust the rights of companies, their creditors and in some cases contributories. The Court's supervisory role in the course of a winding-up is to ensure that the winding-up laws are properly interpreted and applied to correct mistakes, and to supervise the exercise of compulsory processes in relation to the examination of persons and the obtaining of documents for
the purposes of the conduct of those examinations: Rees v Kratzmann (1965) 114 CLR 63.
I would answer question 3(a) in the Amann proceeding 'yes'.
Questions 3(b), 3(c) and 4 do not arise.
'Question 5. ARE THE APPLICANT EXAMINEES BY THEIR NOTICE OF MOTION FILED 30 AUGUST 1995, A COPY OF WHICH IS ANNEXURE "I" ENTITLED TO ANY, AND IF SO WHAT, ORDERS OR DECLARATIONS?'
The applicant examinees are not entitled to any orders or declarations as sought in their notice of motion filed 30 August 1995.
Costs
The costs of the notices of motion of the parties supporting the validity of the Cross-Vesting Scheme and Chapter 9 of the Corporations Law should be paid by the parties seeking to invalidate those provisions. There should be no order for the costs of the interveners.
I certify that this and the preceding fifty (50) pages are a true copy of the reasons for judgment herein of the Honourable Justice Lockhart.
Associate
Dated: 24 June 1996
IN THE FEDERAL COURT OF AUSTRALIA )
VICTORIA DISTRICT REGISTRY ) No VG 3304 of 1992
GENERAL DIVISION )
BETWEEN:
BP AUSTRALIA LIMITED
Applicant
AND:
AMANN AVIATION PTY LIMITED
Respondent
IN THE FEDERAL COURT OF AUSTRALIA )
SOUTH AUSTRALIA DISTRICT REGISTRY ) No SG 111 of 1993
GENERAL DIVISION )
BETWEEN:
CORTAUS LIMITED (IN LIQUIDATION)
Applicant
AND:
LARKEN LIMITED & ORS
Respondents
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY ) No NG 3239 of 1995
GENERAL DIVISION )
BETWEEN:
SOUTHERN STEEL SUPPLIES PTY LIMITED & ANOR
Applicants
AND:
FAVELLE FAVCO HOLDINGS PTY LIMITED
Respondent
CORAM:Black CJ, Lockhart & Lindgren JJ
PLACE:Sydney
DATE:24 June 1996
REASONS FOR JUDGMENT
LINDGREN J
INTRODUCTION
In these three proceedings, a challenge is made to the constitutional validity of two "cross-vesting schemes". I will call them "the general cross-vesting scheme" and "the corporations cross-vesting scheme".
The nature of cross-vested jurisdiction
Griffith, Rose and Gageler outline the nature of cross-vested jurisdiction as between federal, State and Territory courts as follows (side notes and references to them are omitted):
"The essence of cross-vesting is that the jurisdiction of any one court forming part of the cross-vesting scheme is vested in every other court forming part of the scheme. In this way, no proceeding within the compass of the scheme can fail for want of jurisdiction, though proceedings commenced in an inappropriate court can be transferred in accordance with the detailed criteria set out in the legislation. Within the compass of the scheme, it will not be necessary for a court to determine whether it is truly exercising its ordinary federal, State or Territory jurisdiction, or whether it is exercising some cross-vested jurisdiction. It will only need to form opinions on these demarcation issues for limited purposes and to a limited extent." (Griffith, Rose and Gageler, "Choice of Law in Cross-Vested Jurisdiction" a Reply to Kelly and Crawford" (1988) 62 ALJ 698 at 698).
Sub-section 34 (1) of the Commonwealth Act and sub-s 40 (1) of the State Act were substantially identical:
"Subject to this section, the Tribunal is to have power to consider and determine -
(a)an industrial dispute extending beyond the limits of any one State;
(a)an industrial dispute in the State;
(c)an industrial matter arising under an award or order of the Tribunal relating to the Coal Mining Industry in the State;
(d)an industrial matter arising under an award, order, determination or agreement continued in force by section 3 of the Coal Industry Act 1951 and relating to the Coal Mining Industry in the State;
(e)an industrial dispute or matter referred to the Tribunal by a Local Coal Authority; and
(f)any other matter affecting industrial relations in the coal mining industry and the State which the Board declares to be, in the public interest, property to be dealt with under this Act."
It will be noted that both the Commonwealth and State Acts purported to give the Tribunal all this jurisdiction, yet part could be granted only by the Commonwealth Parliament and part could be granted only by the State Parliament.
Because of the importance of Duncan to the issues raised by the present case, it is necessary to quote at some length from the judgments in the case. Gibbs CJ said this:
"The Constitution effects a division of powers between the Commonwealth and the States but it nowhere forbids the Commonwealth and the States to exercise their respective powers in such a way that each is complementary to the other. There is no express provision in the Constitution, and no principle of constitutional law, that would prevent the Commonwealth and the States from acting in co-operation, so that each, acting in its own field, supplies the deficiencies in the power of the other, and so that together they may achieve, subject to such limitations as those provided by s. 92 of the Constitution, a uniform and complete legislative scheme. Examples of co-operative action of that kind, which this Court has assumed to be valid, are to be found discussed in such cases as Wilcox Mofflin Ltd v State of NSW [(1952) 85 CLR 488, at pp 508-511, 526-528; Airlines of NSW Pty Ltd v New South Wales [(1964) 113 CLR 1, at pp 40, 42, 48, 51-52; and Clark King & Co Pty Ltd v Australian Wheat Board ((1978) 140 CLR 120, at p 179]." (at 552)
The three cases cited by Gibbs CJ in the foregoing passage were instances of Australia-wide legislative regulation of an industry in which State legislation complemented, in respect of intrastate activity, Commonwealth legislation, against the possibility that the Commonwealth's legislative power might be held insufficient alone to sustain the entire regime.
Shortly after the passage quoted, his Honour remarked:
"I incline to the view that the Tribunal, once constituted, can exercise any of the powers validly conferred on it either by the Commonwealth or by the State Act. In other words, it can exercise both Commonwealth and State powers in the one case. If this is so, it would appear unnecessary in the present case to find the existence of an industrial dispute extending beyond the limits of any one State, even though the awards applicable to the members of the respondent unions which were registered under the Conciliation and Arbitration Act purported to have been made under the Commonwealth Coal Industry Act." (at 553)
In relation to the making of the agreement by the Governor-General and the Governor, Mason J observed that the executive power of the Commonwealth is not limited to heads of power corresponding with the enumerated heads of Commonwealth legislative power under the Constitution. His Honour expressed the view that:
"Of necessity the scope of the power [the executive power] is appropriate to that [the character and status] of a central executive government in a
federation in which there is a distribution of legislative powers between the Parliaments of the constituent elements in the federation." (at 560).
His Honour continued:
"It is beyond question that it extends to entry into governmental agreements between Commonwealth and State on matters of joint interest, including matters which require for their implementation joint legislative action, so long at any rate as the end to be achieved and the means by which it is to be achieved are consistent with and do not contravene the Constitution. A federal constitution which divides legislative powers between the central legislature and the constituent legislatures necessarily contemplates that there will be joint co-operative legislative action to deal with matters that lie beyond the powers of any single legislature." (ibid)
Mason J could see no strong reason why the Commonwealth Parliament, in the exercise of the conciliation and arbitration power (s 51 (xxxv)) and the trade and commerce power (s 51 (i)), could not establish a tribunal with powers and functions appropriate to the exercise of those powers and declare that it had the capacity to exercise such conciliation and arbitration powers and functions as might be given to it by a State Parliament "so that powers derived from both sources may be exercised in relation to the one dispute or matter" (at 563).
The analogy in the present case is the creation by the Commonwealth Parliament, in the exercise of the power given to it by s 71 of the Constitution, of a federal court with jurisdiction defined pursuant to sub-s 77 (i) and a
declaration by the Commonwealth Parliament of the kind found in sub-s 9 (2) of the Commonwealth Cross-vesting Act and in sub-s 56 (2) of the Commonwealth Corporations Act that its creature may exercise judicial power given to it by a State Parliament, so that the jurisdictions "derived from both sources may be exercised in relation to the one dispute or matter" (at 563).
Mason J concluded the relevant part of his judgment as follows:
"As I indicated in discussing the executive power, the Constitution, when it divides legislative powers between the Parliaments of the Commonwealth and the States, necessarily contemplates that there will be joint co-operative legislative action to deal with matters that lie beyond the competence of any single legislature. As with an exercise of the executive power for a co-operative purpose, Commonwealth legislative action for such a purpose is subject to the limitation that the end to be achieved and the means by which it is to be achieved are consistent with and do not contravene the Constitution. It is an integral element in joint legislation for a co-operative purpose that a legislature, whether Commonwealth or State, can give its authority or office holder a capacity to receive additional powers and functions as may be conferred by another legislature." (ibid - emphasis supplied)
Brennan J outlined the general nature of the two Acts (at 576-579). That a vesting of State judicial power by a State Parliament in a federal court or tribunal would be invalid without the Commonwealth Parliament's consent is made clear by the following passage from his Honour's judgment:
"If the Act had merely constituted or authorized the constitution of a tribunal and had vested federal powers of conciliation and arbitration in it without reference to State powers, an attempt by a State Act to vest similar State powers in the same tribunal would fail - not because of a constitutional incapacity in a Commonwealth tribunal to have and to exercise State power, but because the Commonwealth Act would be construed as requiring the tribunal to have and to exercise only such powers as the Commonwealth Parliament had chosen to vest in it. If the Commonwealth Act were construed as not permitting the tribunal to be a repository of State power, it would prevail over the State Act by reason of the inconsistency between them. But the Commonwealth Act permits the State Act to repose State powers in the Tribunal. The Commonwealth Parliament, having power to create the Tribunal and vest federal powers of conciliation and arbitration in it, is not bound to refuse permission for the reposing of similar State powers in the Tribunal. Indeed, the object of preventing and settling interstate industrial disputes in the coal industry may be better achieved by permitting the Tribunal to have and to exercise similar powers conferred upon it by a State Act." (at 579 - emphasis supplied)
It seems to me that subject to any constraints arising from this Court's character as a Chapter III court (see later) these observations are applicable, mutatis mutandis, to the two cross-vesting schemes.
Several general considerations suggested by the notion of co-operative federalism explicated in Duncan, but based on the facts of the present case, lead me to conclude that the Commonwealth Parliament had power to consent to the conferment on federal courts of State judicial power by the State Cross-vesting Acts and the States Corporations Acts.
The Commonwealth Parliament has invested the Supreme Courts of the States with federal jurisdiction in exercise of the legislative power given by s 77 (iii) of the Constitution. No challenge has been made, or apparently could have been made, to the validity of that exercise of legislative power. An agreement for co-operation has been entered into between the executive governments of the parties to the federal compact. No challenge has been made, or apparently could have been made, to the validity of that exercise of executive power.
The purpose of the cross-vesting of jurisdiction was to overcome jurisdictional disputes which were, understandably, raised by litigants when that course served their interests, but which were seen to militate against the effective administration of justice. It could hardly be suggested that it was not permitted to the Commonwealth to cooperate with the States for the purpose of ensuring that judicial power was able to be exercised throughout Australia in a manner which was perceived to serve the public interest in the effective administration of justice. The purpose of the vesting by Commonwealth law in State courts of jurisdiction exercised by this Court was to overcome difficulties arising from shortcomings in the jurisdiction of State courts. That was a proper purpose for the Commonwealth Parliament to entertain. It was, moreover, in my opinion proper for the Commonwealth Parliament to entertain it as part of a broader arrangement in which the reciprocal purpose of the State laws was the overcoming of difficulties arising from jurisdictional shortcomings in this Court.
A more specific form of this consideration derives from the way in which the High Court construed the expression "matter" in or by reference to Chapter III in several cases decided not long before the general cross-vesting scheme was enacted. I refer to Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 ("Moorgate"), Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 ("Philip Morris"), Fencott v Muller (1983) 152 CLR 570 and Stack v Coast Securities (No 9) Pty Ltd (1983) 154 CLR 261 ("Stack"). In these cases the scope of jurisdiction vested through the use of the word "matter" was in issue. It was established in and following Re Judiciary Act that "matter" refers not to a legal proceeding but to "the subject matter for determination in a legal proceeding" (Re Judiciary Act at 265; Moorgate at 480); to a "justiciable controversy" (Fencott v Muller at 603 (Mason, Murphy, Brennan, Deane JJ)). In the cases referred to, it was held that federal jurisdiction given by means of the use of the word "matter" extended to include jurisdiction to determine causes of action and claims founded in State law which arose out of facts having the necessary relationship (variously described) with those facts out of which the causes of action and claims founded in federal law arose.
What is important for present purposes is that the High Court was influenced in its interpretation of the word "matter" by the consideration which is nowhere better expressed than in the following passages from the joint judgment of Mason, Murphy, Brennan and Deane JJ in Fencott v Muller, supra:
"A judicial power which is not exercised to determine the whole of a controversy is, generally speaking, not appropriately and conveniently exercised. Not appropriately, because the controversy is not quelled; not conveniently, because the parties - the principal beneficiaries of the exercise of judicial power - must litigate anew to have the outstanding questions and issues determined." (at 608)
"The power judicially to determine the whole of a dispute is inconsistent with a limitation which would restrict the Court to resolving only the federal claim and what is necessary for that purpose. To adopt a more restrictive approach to the ascertainment of the ambit of a matter is to ensure that the obstacles of arid jurisdictional dispute will beset the path of a party who must invoke federal jurisdiction, especially federal jurisdiction exclusively vested in a federal court pursuant to s 77 (ii). The judicial ascertainment of facts in a particular controversy would be bedevilled by the possibility of divergent findings or by unseemly attempts to secure a first finding from one court rather than another. The judicial award of effective remedies in resolution of a controversy would be impaired, especially in cases where remedies are discretionary or reciprocal. The judicial power of the Commonwealth would at once prove insufficient to accomplish its purpose and productive of inefficiency in the exercise of the judicial power of the States. These consequences cannot be accepted unless they follow from the language of the Constitution, and they do not." (at 609)
See too Moorgate at 471-472 (Barwick CJ), 480-483 (Stephen, Mason, Aickin, Wilson JJ); Philip Morris at 475-476 (Barwick CJ), 512-514 (Mason J with whom Stephen J agreed), 519 (Murphy J); Stack at 283 (Gibbs CJ), 291-293 (Mason, Brennan, Deane JJ), 299-300 (Murphy J)).
Of course there remained limits on the jurisdiction given as to which disputes might still arise and as to which it might be thought to be in the interests of justice that they should
be eliminated entirely. Thus, the particular consideration which the High Court took into account in its construction of the word "matter" in the cases to which I have referred is also relevant in the context of the validity of the cross-vesting schemes. The present point is no more than that it can be seen to assist in the exercise of the judicial power of the Commonwealth itself that federal courts should have jurisdiction in State matters and that the possibility of disputation as to the outer boundaries of the "matters" in which those courts have jurisdiction should be eliminated entirely.
The arrangement sought to be achieved by the cross-vesting schemes is one which would have once fallen within the "amplitude" or "completeness" of the plenary powers of the federating Colonies and it must be asked whether the Constitution indicates a denial of the capacity to achieve it otherwise than by refraining from establishing federal courts or legislating out of existence those which exist.
The two cross-vesting schemes conform to the concepts found in Duncan. The jurisdiction in State matters conferred on this Court by the State Parliaments is similar and complementary to the federal jurisdiction invested in State courts by the Commonwealth Parliament (see below). Each of the Commonwealth and State Parliaments "acting in its own field supplies deficiencies in the power of the other, and so that together they may achieve, subject to ... the Constitution, a uniform and complete legislative scheme" (ibid at 552 per Gibbs CJ). The cross-vesting schemes represent "joint cooperative legislative action to deal with matters that lie beyond the competence of any single legislature" (ibid at 563 per Mason J). The conferral by the State Parliaments on this Court of jurisdiction in "State matters" is "conducive to or consistent with the achievement of the object which the vesting and exercise of federal powers is intended to achieve" (ibid at 579-580 per Brennan J).
In all these circumstances, unless there is found in the Constitution a denial of the power of the Commonwealth or of the States or of both to enter into and implement by legislation a reciprocal cooperative scheme generally of the kind embodied in the two cross-vesting schemes, I would conclude that they are at liberty to do so.
Does the Constitution have the effect contended for by those challenging the validity of the two cross-vesting schemes?
It was submitted that:
(a)Chapter III of the Constitution provides exclusively for the original jurisdiction which may be conferred on federal courts within the Australian federal system and it follows that only the Commonwealth Parliament may confer that jurisdiction;
(b)the jurisdiction purportedly conferred by State Parliaments on this Court under the two cross-vesting schemes extends beyond "judicial" power; and
(c)the State Parliaments have purported to confer on this Court jurisdiction to entertain proceedings otherwise than "in matters" within the meaning and for the purpose of Chapter III of the Constitution.
Numerous statements in the decided cases were relied upon in support of these submissions. Heavy reliance was placed upon Re Judiciary Act and R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 ("the Boilermakers' case").
In Re Judiciary Act, the legislation the validity of which was challenged was Part XII (ss 88-94) of the Judiciary Act 1903. Section 88 within that Part purported to give the High Court jurisdiction to "hear and determine" any question referred to it by the Governor-General as to the validity of any enactment of the Commonwealth Parliament. Section 93, within the same Part, purported to make the High Court's determination "final and conclusive and not subject to any appeal". The Commonwealth submitted that the power given to the Court was merely "consultative" or "advisory" and was not judicial at all. It is not clear to me how acceptance of that proposition would have saved the legislation from invalidity. Be this as it may, in their joint judgment, Knox CJ, Gavan Duffy, Powers, Rich and Starke JJ held that the legislation provided for "an authoritative declaration of the law" which was "clearly a judicial function" and one not competent to the Court unless part of the judicial power of the Commonwealth (at 264).
Their Honours noted that it was not necessary for them to inquire whether Parliament could impose on the Court or its members any, and if so what, duties other than judicial duties. However, their Honours went on to consider whether the kind of judicial power represented by Part XII was able to be conferred by the Commonwealth Parliament. In the passage from their judgment quoted earlier, they made it clear that Chapter III contained an exhaustive statement of the judicial power of the Commonwealth.
They did not, however, need to go beyond a consideration of a conferral of power by the Commonwealth Parliament and in my opinion they did not do so. The critical passage merits repetition:
"This express statement [in ss 75, 76 and 77] of the matters in respect of which and the Courts by which the judicial power of the Commonwealth may be exercised is, we think, clearly intended as a delimitation of the whole of the original jurisdiction which may be exercised under the judicial power of the Commonwealth, and as a necessary exclusion of any other exercise of original jurisdiction." (at 265 - emphasis supplied)
In referring to "any other exercise of original jurisdiction" their Honours were addressing only "any other exercise of the original jurisdiction exercisable under the judicial power of the Commonwealth". Clearly, this can be vested or conferred only by the Commonwealth Parliament. The passage quoted is silent as to jurisdiction exercisable under judicial power not that of the Commonwealth which is necessarily conferred otherwise than by the Commonwealth Parliament.
Their Honours went on to decide that the notion of a "matter" in Chapter III limits the nature of the judicial power of the Commonwealth which may be conferred by the Commonwealth Parliament. In a familiar passage, they said this:
" ... we do not think that the word 'matter' in sec. 76 means a legal proceeding, but rather the subject matter for determination in a legal proceeding. In our opinion there can be no matter within the meaning of the section unless there is some immediate right, duty or liability to be established by the determination of the Court. If the matter exists, the Legislature may no doubt prescribe the means by which the determination of the Court is to be obtained, and for that purpose may, we think, adopt any existing method of legal procedure or invent a new one. But it cannot authorise this Court to make a declaration of the law divorced from any attempt to administer that law." (at 265-266)
Re Judiciary Act decided only that Chapter III is an exhaustive statement of the original jurisdiction exercisable under the judicial power of the Commonwealth and accordingly that the Commonwealth Parliament cannot make a law vesting or conferring such jurisdiction except in or with respect to a "matter".
That it is beyond the power of the Commonwealth Parliament to invest a federal court with jurisdiction to deliver an advisory opinion because of the absence of a "matter" has been subsequently recognised (Mellifont v Attorney-General (Queensland) (1991) 173 CLR 289 at 300, 303, 305, 314, 316-319; North Ganalanja Aboriginal Corporation v State of Queensland (1996) 135 ALR 225 at 232 (Brennan CJ, Dawson, Toohey, Gaudron and Gummow JJ) 257 McHugh J; but contrast Kirby J at 276-278).
In the Boilermakers' case the Court was concerned with the former Court of Conciliation and Arbitration. The primary functions of that "Court" were the non-judicial ones of conciliation and arbitration. Notwithstanding this, certain powers given to the Court by the Conciliation and Arbitration Act 1904 were "judicial". In particular, paras 29 (1) (b) and (c) empowered the Court to order compliance with an order or award broken or not observed and to enjoin any organisation or person from committing or continuing to contravene the Act, and s 29A conferred on the Court the same power to punish for contempt of its powers and authorities, judicial or otherwise, as was possessed by the High Court in respect of contempt of that Court. It was held by a majority that the Constitution did not permit the conferment of those powers on a body established for purposes foreign to them, notwithstanding that the body was organised as a court, that it was created by the Commonwealth Parliament, and that s 72 of the Constitution was satisfied in respect of its justices.
Again, the case does not address a vesting of judicial power not that of the Commonwealth in a federal court.
The various cases in which the "Territories power" in s 122 of the Constitution has been held able to support a grant of judicial power do not assist directly in the resolution of the present question, since they are based upon the sovereign nature of that legislative power and the fact that it is unrelated to the division of powers between the parties to the federal compact; cf R v Bernasconi (1915) 19 CLR 629 at 635 (Griffith CJ with whom Gavan Duffy and Rich JJ agreed), 637 (Isaacs J); Porter v The King; Ex parte Yee (1926) 37 CLR 432 at 440-441 (Isaacs J), 447 (Higgins J), 448 (Rich J), 448-449 (Starke J); Spratt v Hermes (1965) 114 CLR 226 at 239-240 (Barwick CJ), 250-251, 257 (Kitto J), 265 (Taylor J), 266-268 (Menzies J) 274, 277 (Windeyer J), 280 (Owen J); Capital TV, supra, at 604, 606 (Menzies J), 612 (Windeyer J), 615 (Walsh J), 626 (Gibbs J). The cases just cited demonstrate at least that dicta which can be found to the effect that Chapter III is the sole source of the original jurisdiction which the Commonwealth Parliament is able to vest or confer cannot be taken at face value.
Even statements in which this is recognised must themselves be read in the context of the facts of the case in which they occur. For example, in Spratt v Hermes, supra, Barwick CJ said this of Re Judiciary:
"In Re Judiciary and Navigations Acts [(1921) 29 CLR
257], a majority of the Court held that Chap III of the Constitution exhaustively defined the original jurisdiction which may be given to this Court: [(1921) 29 CLR, at p 265]. But this expression of opinion must be taken, in my opinion, in the context of that case to be limited to original jurisdiction given by laws made under legislative power derived from s 51 of the Constitution. It has not so far been taken by the Court as a decision that Chap III negates the possibility of original jurisdiction being given to this Court by a law made under some other legislative power of the Parliament, ..." (at 240)
Spratt v Hermes was concerned with an exercise of legislative power by the Commonwealth Parliament alone and must be understood accordingly. I do not think that such dicta, which accept that provisions of the Constitution outside Chapter III may support a vesting of judicial power by the Commonwealth Parliament, should be taken to signify that only the judicial power of the Commonwealth may be conferred on courts created by that Parliament as part of the federal system. The simple fact is that prior to the present case the question has not arisen for decision whether State judicial power may be conferred on such courts.
There is no express power in the Constitution for the Commonwealth Parliament to "permit" federal courts to exercise the jurisdiction purportedly conferred on it by State Parliaments, but I do not think that sub-s 9 (2) of the Commonwealth Cross-vesting Act or sub-s 56 (2) of the Commonwealth Corporations Act is invalid for that reason. Nor do I think that the absence of a requirement of the States' consent in s 77 (iii) of the Constitution signifies that the Constitution countenances only an investing or conferring of judicial power that can, consistently with the Constitution, be invested or conferred by a party to the federal compact unilaterally. (In Duncan, various provisions of the Coal Industry Act 1946 (Cth) acknowledged that the Tribunal was to have powers conferred on it by the Coal Industry Act 1946 (NSW).) Nor do I think that the possibility of a reference by the State Parliaments to the Commonwealth Parliament under s 51 (xxxvii) of the Constitution should lead to the conclusion that it was not open to the States to give State judicial power to federal courts directly.
I turn now to a submission based on sub-s 19 (1) of the Federal Court Act which provides as follows:
"19 (1)The Court has such original jurisdiction as is invested in it by laws made by the Parliament."
Plainly, the jurisdiction given by the State Cross-vesting Acts and the State Corporations Acts lies outside this provision. The first question which arises is whether sub-s 19 (1) is an exhaustive statement of the original jurisdiction of this Court. Does sub-s 19 (1) mean, in effect, "the Court has such original jurisdiction as is invested in it by laws made by the Parliament and no other jurisdiction" (underlined words not in sub-section). If sub-s 19 (1) is not an exhaustive statement of the original jurisdiction of the Court, the submission that it stands in the way of the validity of the two cross-vesting schemes has no foundation.
If sub-s 19 (1) is an exhaustive statement of the original jurisdiction of the Court, in my opinion sub-s 9 (2) of the Commonwealth Cross-vesting Act and sub-s 56 (2) of the Commonwealth Corporations Act, impliedly work an amendment or a pro tanto repeal of sub-s 19 (1) to the extent necessary to permit the exercise of jurisdiction conferred by "a provision of ... a law of a State relating to cross-vesting of jurisdiction". Sub-section 4 (1) of the State Cross-vesting Acts and sub-s 42 (3) of the State Corporations Acts are both such provisions. Sub-section 9 (2) of the Commonwealth Cross-vesting Act and sub-s 56 (2) of the Commonwealth Corporations Act were both enacted later than sub-s 19 (1) of the Federal Court Act and address a specific subject, while sub-s 19 (1) of the Federal Court Act is general in its terms and import. The effect of the two later provisions is to remove the supposedly understood words "and no other jurisdiction" from sub-s 19 (1).
Those who challenge the validity of the two cross-vesting schemes submit that the "State matters" referred to in sub-s 4 (1) of the State Cross-vesting Acts and "civil matters arising under the Corporations Law" in sub-s 42 (3) of the State Corporations Acts encompass a capacity to exercise non-judicial power or judicial power not limited by reference to the notion of a "matter" in the Chapter III sense. However, I think that the word "matter" in these expressions bears the same meaning as it does in Chapter III of the Constitution.
The provisions of the State legislation to which I have referred would fall to be construed as part of the respective co-operative schemes for cross-vesting of jurisdiction and in the light of the familiar requirement of Chapter III of the Constitution as expounded in cases including Re Judiciary Act and other cases referred to earlier.
What I have said thus far enables me to answer the following questions as appears below:
In the Favelle proceeding
Question 1:Yes.
Question 2:This question does not arise.
Question 3:Yes.
In the Cortaus proceeding
Question 1:Yes.
Question 2:This question does not arise.
In the Amann proceeding
Question 1(a): Yes.
Question 1(b): This question does not arise
Question 1(c): " " " " "
Question 2:" " " " "
I agree with Lockhart J that in the Amann proceeding, question 3 (a) should be answered "Yes", questions 3(b), 3 (c) and 4 do not arise and question 5 should be answered to the effect that the applicant examinees are not entitled to any orders or declarations as sought in their notice of motion filed 30 August 1995. I also agree with Lockhart J's reasons for arriving at those answers.
CONCLUSION
In all three proceedings the separate questions should be answered as indicated above. I agree with Lockhart J that the costs of the motions of the parties supporting the validity of the general cross-vesting scheme and the Corporations Cross-vesting Scheme should be paid by the parties seeking to invalidate them, and that there should be no order for the costs of the interveners.
I certify that this and the preceding 62 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren.
Associate:
Dated: 24 June 1996
Heard: 20, 21, 22 November 1995.
Place: Sydney
Decision: 24 June 1996.
Appearances: In proceeding No VG 3304 of 1992 ("Amann").
Mr S D Robb QC with Mr A Robertson SC instructed by Kalyk Nash appeared for the applicant (BP).
Mr F M Douglas QC with Mr P Dowdy and Mr K Connor instructed by Henry Davis York appeared for the respondent ("Amann").
In proceedings No SG 111 of 1993 ("Cortaus").
Mr S C Churches with Mr R J Mills of counsel instructed by Piper Alderman appeared for the applicant ("Cortaus").
Mr D M J Bennett QC with Mr I M Jackman and Mr M J Leeming of counsel instructed by Speed and Stracey appeared for the 4th respondent ("Mr Joye").
In proceedings No NG 3239 of 1995 ("Favelle").
Mr A Spencer of counsel instructed by Tony Simons appeared for the applicants (Southern Steel and Southern Sheet).
Mr N Perram and Mr R G McHugh of counsel instructed by I.S.P. LAW appeared for the respondent ("Favelle").
Interveners in all three proceedings.
Mr H Burmester of counsel instructed by the Australian Government Solicitor appeared for the Attorney-General for the Commonwealth as intervener in all three proceedings.
Mr L Katz SC instructed by the Crown Solicitor's Office appeared for the Attorney-General for New South Wales as intervener in all three proceedings.
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