British American Tobacco Australia Ltd v Western Australia

[1986] HCA 51

HIGH COURT OF AUSTRALIA

Gibbs C.J., Mason, Wilson, Brennan, Deane and Dawson JJ.

THE COMMONWEALTH v. EVANS DEAKIN INDUSTRIES LTD

(1986) 161 CLR 254

26 August 1986

Constitutional Law (Cth)

Constitutional Law (Cth)—Federal jurisdiction—Suit to which Commonwealth a party—Commonwealth statute requiring rights of Commonwealth to be as nearly as possible the same as in a suit between subject and subject—State statute imposing charge in favour of sub-contractor on money payable by employer to contractor for performance of work—Whether applicable to Commonwealth as employer—The Constitution (63 &64 Vict. c. 12), s. 75(iii)—Judiciary Act 1903 (Cth), ss. 39(2), 64—Sub-contractors' Charges Act 1974 (Q.),ss. 10-12.

Decisions

GIBBS C.J., MASON, WILSON, DEANE and DAWSON JJ.: This is an appeal from a judgment of the Full Court of the Supreme Court of Queensland, which overruled a demurrer by the Commonwealth to the statement of claim delivered by Evans Deakin Industries Limited ("Evans Deakin") in an action brought by that company against the Commonwealth and E. &J.M. Maltry Pty. Ltd. (in Liquidation) ("Maltry"). The material facts alleged in the statement of claim were as follows. On or about 1 December 1983 Maltry contracted with the Commonwealth to perform certain construction work at the Eagle Farm airport in Brisbane. On 11 January 1984 Evans Deakin agreed with Maltry to perform certain of that work, namely the supply and erection of structural steel, as a sub-contractor. Evans Deakin performed work under the sub-contract, and $213,698.52 is owing to it by Maltry in respect of that work; a further sum of $27,600 will become payable on the expiration of the maintenance period stipulated for in the sub-contract. Moneys are owing by the Commonwealth to Maltry under the contract between those two parties. Maltry is now in liquidation. On 27 August 1984 Evans Deakin gave to the Commonwealth a notice under s.10 of the Subcontractors' Charges Act 1974 (Q.), as amended, ("the Subcontractors' Charges Act") claiming a charge in respect of the sum of $213,698.52 payable at the date of the notice and in respect of the further sum of $27,600, being retention moneys which had been withheld under the sub-contract and which, upon the expiration of the stipulated maintenance period, would become payable to Evans Deakin in respect of work done under the sub-contract. Neither the Commonwealth nor Maltry has paid or made satisfactory arrangements for paying Evans Deakin any part of the sum of $213,698.52. By its statement of claim, Evans Deakin claims against the Commonwealth a declaration that it is entitled to a charge under the Subcontractors' Charges Act on the moneys payable by the Commonwealth to Maltry pursuant to the contract between those parties for the sums of $213,698.52 and $27,600 and an order for payment by the Commonwealth to Evans Deakin of those two sums. The Commonwealth has demurred to the statement of claim on the ground that the Commonwealth is not bound by the Subcontractors' Charges Act.

2. The effect of the provisions of the Subcontractors' Charges Act, so far as they are relevant, may be shortly stated. By s.5(1), a sub-contractor is entitled to a charge on the money payable by an employer to the contractor under a contract for the performance of work upon or in respect of (inter alia) land or a building. The charge secures payment in accordance with the sub-contract of all money that is payable or to become payable to the sub-contractor for work done by him under the sub-contract: s.5(2). The total amount recoverable under the charges of sub-contractors shall not exceed the amount payable to the contractor under his contract: s.5(3). A sub-contractor who intends to claim a charge must give the notices prescribed by s.10: a notice of claim of charge to the employer and a notice to the contractor of having made the claim. The claim shall be in respect of money payable to the sub-contractor at the date of the notice and money to become payable to the sub-contractor after the date of the notice for work done by him prior to that date: s.10(1). Where a notice of claim of charge is given pursuant to s.10, the person to whom it is given shall retain, until the court in which the claim is heard gives a direction in the matter, a sufficient part of the money that is or is to become payable by him under his contract to satisfy the claim: s.11(1). A person who fails to retain the amount that he is required to retain is personally liable to pay to the sub-contractor the amount of his claim but not exceeding the amount that he is required by s.11 to retain: s.11(2). If a contractor who has been given notice of having made the claim under s.10 gives notice that he accepts liability, the employer shall pay the sub-contractor the amount he is required to retain: s.11(3), (4). An employer may, at any time after notice of claim of charge has been given to him, pay into court the amount he is required to retain: s.11(5). A payment made under s.11 discharges the employer of all further liability in respect of the amount paid and the cost of any proceeding: s.11(6). Where the person to whom notice of claim of charge has been given does not pay or make satisfactory arrangements for paying to the claimant the amount claimed, the sub-contractor may recover the amount of the charge from the person by whom the money subject to the charge is payable: s.12(1). Claims may be determined and enforced by proceedings under the Subcontractors' Charges Act in (inter alia) the Supreme Court of Queensland: s.12(2), (2A).

3. The Subcontractors' Charges Act, by s.4, states that "This Act binds the Crown", but it is common ground that those words in the Act do not refer to the Crown in right of the Commonwealth and that the Act does not of its own force apply to the Commonwealth. The submission on behalf of Evans Deakin is that the Commonwealth is rendered liable by s.64 of the Judiciary Act. That section provides as follows:

"In any suit to which the Commonwealth or a State is a party, the rights of parties shall as
nearly as possible be the same, and judgment may be given and costs awarded on either side, as in a suit between subject and subject."

4. It was decided in Maguire v. Simpson (1977) 139 CLR 362 that s.64 does not deal only with matters of procedure; the rights to which it refers include substantive rights. That view, which was necessary to support the conclusion in that case that s.63 of the Limitation Act 1969 (N.S.W.), whose provisions were not merely procedural, was applicable in an action commenced by the Commonwealth Trading Bank in the Supreme Court of New South Wales, was held by five members of the Court: see particularly at pp.377, 381, 388, 400, 405, 407. The sixth member of the Court, Stephen J., found it unnecessary to decide whether s.63 of the Limitation Act was applicable or to resolve the question whether s.64 referred to substantive as well as to procedural rights: see at p.392. The majority of the Court in that case considered that their conclusion was supported by the natural meaning of the words of the section, by the fact that in Farnell v. Bowman (1887) 12 App Cas 643 the Judicial Committee had given a similar wide meaning to the words of a New South Wales statute in much the same language and by the balance of earlier authority in this Court. It is unnecessary to discuss these reasons in detail because Maguire v. Simpson has finally settled the question. That case establishes that in every suit to which the Commonwealth is a party s.64 requires the rights of the parties to be ascertained, as nearly as possible, by the same rules of law, substantive and procedural, statutory and otherwise, as would apply if the Commonwealth were a subject instead of being the Crown. That result seems entirely just; the Commonwealth acquires no special privilege except where it is not possible to give it the same rights and subject it to the same liabilities as an ordinary subject. The section is ambulatory, and is therefore capable of applying rights resulting from changes made to State legislation after s.64 was enacted: Maguire v. Simpson, at pp 388, 395, 397, 407. There can be no doubt that the Commonwealth Parliament has full power to make laws governing the liability of the Commonwealth. It is unnecessary to consider whether s.78 of the Constitution (which enables the Parliament to "make laws conferring rights to proceed against the Commonwealth or a State in respect of matters within the limits of the judicial power") is the sole source of that power. In Maguire v. Simpson Barwick C.J. and Jacobs J. thought that it was, and held that s.78 is not limited to matters of procedure: see at pp.370, 404-405. It is more doubtful whether the Commonwealth Parliament has a general power to legislate to affect the substantive rights of the States in proceedings in the exercise of federal jurisdiction, but that question does not arise in the present case, since Maguire v. Simpson establishes that the provisions of s.64 in their application to suits in which the Commonwealth is a party are not to be confined by considerations which might operate to limit their scope in their application to suits in which a State is a party. Certainly s.64 is validly enacted in so far as it deals with the rights and liabilities of the Commonwealth.

5. The argument for the appellant in the present case takes as its starting point the proposition that "the essential condition of the application of s.64 is the existence of the suit to which the Commonwealth is a party ...": The Commonwealth v. Anderson (1960) 105 CLR 303, at p 310; and see Maguire v. Simpson, at pp 383-384 and China Ocean Shipping Co. v. South Australia (1979) 145 CLR 172, at pp 204-205. The correctness of that proposition cannot be doubted; it appears from s.64 itself that there must be a suit to which the Commonwealth is a party before s.64 commences to operate, at least directly. It is then said to follow that there must be some other law of the Commonwealth which enables the Commonwealth to be sued in the particular matter in question before s.64 can apply; in other words, there must be some other law of the Commonwealth which has given the plaintiff a cause of action before the suit is commenced. Section 56 of the Judiciary Act, it is said, performs that function in cases in which a person makes a claim against the Commonwealth in contract or tort, and particular provisions of Commonwealth legislation may bring about the same result in other cases. Proceedings under the Subcontractors' Charges Act are not proceedings in contract or in tort, and there is no other law of the Commonwealth which enables the Commonwealth to be sued to enforce a charge under that Act. Therefore, it is said, s.64 does not apply. Moreover, it is submitted, it would be anomalous if, upon the commencement of the action, the Commonwealth became subject to obligations which did not exist as between the plaintiff and the Commonwealth at the time when the events giving rise to those obligations occurred; a similar consideration influenced Menzies J. in Downs v. Williams (1971) 126 CLR 61, at p 68, in relation to State legislation in similar terms.

6. Upon analysis, this argument can be seen to be a reversion to the theory, rejected in Maguire v. Simpson, that s.64 does not refer to the substantive rights of the parties. The Supreme Court is given jurisdiction to entertain a suit to which the Commonwealth is a party by the combined effect of s.39(2) of the Judiciary Act and s.75(iii) of the Constitution. When an action is brought against the Commonwealth in the Supreme Court the condition for the operation of s.64 is satisfied: see The Commonwealth v. Anderson, at p 310. Once the suit is commenced the substantive rights of the parties shall be, as nearly as possible, as in a suit between subject and subject. If the Commonwealth were a subject, Evans Deakin, as sub-contractor, would, on the facts alleged in the statement of claim, be entitled to enforce the charge given by the Subcontractors' Charges Act. The qualification to s.64 expressed by the phrase "as nearly as possible" would not render the Subcontractors' Charges Act inapplicable. That phrase has been differently paraphrased by different judges, as the discussion by Stephen J. in Maguire v. Simpson, at pp 393-395, shows. The natural meaning of the expression appears to be that suggested by Kitto J. in Asiatic Steam Navigation Co. Ltd. v. The Commonwealth (1956) 96 CLR 397, at p 427: "as completely as possible". Kitto J. went on to say, at p 428, that s.64 in effect requires the court "to put out of account any special position of the Crown, and as far as possible to decide all questions of right in the same way as they would have been decided if the Commonwealth or State had been a subject". It is unnecessary to consider for present purposes whether in some cases at least it would be right to consider the special position of the Crown, but this is not a case of that kind. Here the Commonwealth, in entering into a building contract, was not performing a function peculiar to government; it was making a contract of a kind commonly entered into by ordinary members of the public and the determination of the rights and liabilities of the Commonwealth by reference to the Subcontractors' Charges Act would not be incompatible with the position of the Commonwealth or detrimental to the public welfare. Even if the words "as nearly as possible" are given a wider meaning than that which Kitto J. attributed to them, they do not exclude the rights given to Evans Deakin by the Subcontractors' Charges Act in the present case.

7. On behalf of the Commonwealth it is submitted that until the proceedings were commenced the Commonwealth could not comply with the provisions of s.11 of the Subcontractors' Charges Act - it could not, for example, pay money into court in accordance with s.11(5). On the contrary, it is submitted, the Commonwealth had a positive obligation to act in accordance with the terms of its building contract with Maltry and a payment made otherwise than in compliance with its legal obligations would be rendered illegal by the provisions of ss.81 and 83 of the Constitution and s.34 of the Audit Act 1901 (Cth), as amended. There are two answers to this submission. In the first place, the rights and obligations created by a State statute may be given effect in favour of or against the Commonwealth in a suit to which the Commonwealth is a party, notwithstanding that not all of the provisions of the State statute will be enforceable against the Commonwealth. For example, an action for breach of the statutory duty created by the provisions of the Factories, Shops and Industries Act 1962 (N.S.W.) may succeed against the Commonwealth, even if it be correct to assume that the provisions of that Act which prescribe penalties for breach of an obligation to adopt safety measures, and those which provide for the inspection and supervision of factories, have no application to the Commonwealth: see Strods v. Commonwealth of Australia (1982) 2 NSWLR 182. Secondly, in deciding whether a private person has a right against the Commonwealth, and the Commonwealth has a corresponding obligation, it must be remembered that once a suit is commenced between those parties the rights of the parties in that suit will as nearly as possible be the same as in a suit between subject and subject. If it is possible to say that once a suit is commenced the Commonwealth will be held liable, it follows that it can also be said, before the suit is commenced, that the events which have happened have created a liability which will be recognized and enforced in legal proceedings. A payment in satisfaction of such a liability will not be unlawful.

8. It is therefore only a half-truth to say that s.64 has the effect that upon the commencement of a suit the Commonwealth becomes subject to obligations which did not exist beforehand. The section does not have a retrospective operation. At all times before a suit is commenced, it can be known what the rights of the parties will be once the suit is commenced. It follows that we do not find compelling the consideration which influenced Menzies J. in Downs v. Williams in the passage at p 68 to which reference has already been made. As was pointed out in Maguire v. Simpson, at pp 384-385, Downs v. Williams is distinguishable from a case arising under s.64, because that decision involved (whereas s.64 does not) the reconciliation of two statutes of the one legislature. For that reason it is unnecessary to consider whether the decision in Downs v. Williams should be overruled.

9. We were referred to the recent decision of the Court of Appeal of New South Wales in Australian Postal Commission v. Dao (1986) EOC 92-148 in which it was held that the Anti-Discrimination Act 1977 (N.S.W.) did not confer jurisdiction on the Equal Opportunity Tribunal to grant relief to employees of the Australian Postal Commission. Although special leave to appeal has been granted from that decision, it is necessary now to discuss certain dicta which bear on the present question; it should however be pointed out that the decision rested mainly on reasons which do not now concern us, and that our disagreement with those dicta does not necessarily mean that the decision itself is wrong. In that case, McHugh J.A. dealt with the question whether, assuming the Commission to be the Commonwealth and the Tribunal to be a court, the provisions of s.64 of the Judiciary Act applied the Anti-Discrimination Act to the Commission in proceedings before the Tribunal and said, at p.76,489:

"Section 64 does not create causes of action; it assumes that the plaintiff has a cause of action against the Commonwealth. If s.64 enables a plaintiff to create a cause of action against the Commonwealth, then the Commonwealth, although in breach of no obligation whatever to the plaintiff, becomes retrospectively in breach of a statutory obligation upon the commencement of the suit. ... In my opinion, s.64 does not begin to operate as against the Commonwealth until the plaintiff has a cause of action which he can bring against the Commonwealth."

Kirby P. agreed with these remarks, and added, at p.76,475:

"Section 64 does not create causes of action. It assumes that a cause of action is validly created by State law which applies to the Commonwealth."

It follows from what has been said that we do not agree with those statements. McHugh J.A. went on to refer to Pitcher v. Federal Capital Commission (1928) 41 CLR 385 in which it was held that the widower of a woman killed as the result of negligence for which the Commonwealth was responsible could sue the Commonwealth under the Compensation to Relatives Act 1897 (N.S.W.). He said, at p.76,489, that the decision "turned on the fact that the Compensation to Relatives Act (N.S.W.) was always binding on the defendant because of s.6 of the Seat of Government Acceptance Act 1909 (Cth)". However, although the Compensation to Relatives Act was rendered applicable to the Australian Capital Territory by the Seat of Government Acceptance Act, the latter Act did not render the former binding on the Commonwealth, and this Court held that it was ss.56 and 64 of the Judiciary Act which rendered the Commonwealth liable. As Maguire v. Simpson has demonstrated, s.56 could not have had that effect; s.64 was the effective provision. It may be added that s.56 would have been manifestly defective if it had been intended to be the source of substantive rights in actions to which the Commonwealth is a party, since that section applies only when the Commonwealth is the defendant. Pitcher v. Federal Capital Commission is a case in which there would have been no cause of action if s.64 had not equated the substantive rights of the parties to those in a suit between subject and subject.

10. The question whether The Commonwealth v. Cigamatic Pty. Ltd. (in Liquidation) (1962) 108 CLR 372 was correctly decided was not canvassed in argument and we do not need to consider it.

11. For these reasons the conclusion reached by the Full Court of the Supreme Court of Queensland was correct and the appeal should be dismissed.

BRENNAN J.: The Subcontractors' Charges Act 1974 (Q.) ("the Act") provides for the creation of a statutory charge in favour of subcontractors on money payable by an employer to a contractor under his contract (s.5). When a subcontractor gives notice of his intention to claim a charge (s.10), the right of the contractor to be paid the money due to him by the employer may be affected (see s.11). A subcontractor's claim of charge may be enforced by proceedings brought in the Supreme Court of Queensland or in some other court of competent civil jurisdiction in that State (s.12). The plaintiff ("Evans Deakin") gave notice of its intention to claim a charge and subsequently brought proceedings in the Supreme Court of Queensland seeking a declaration that it, as a subcontractor, is entitled to a charge on the moneys payable by the Commonwealth of Australia as employer to E. &J.M. Maltry Pty.Ltd. (in liquidation) ("Maltry") as contractor and an order against the Commonwealth for the payment of the amount allegedly charged on those moneys. The Commonwealth demurred to Evans Deakin's statement of claim "on the grounds that the (Commonwealth) is not bound by the provisions of the Subcontractors' Charges Act 1974 and on other grounds sufficient in law". The demurrer was overruled by the Full Court of the Supreme Court and this is an appeal against that judgment.

2. Although the Act is expressed to bind the Crown (s.4), it is common ground that it does not bind the Commonwealth of its own force. It is submitted that the Act affects the Commonwealth as employer and Maltry and Evans Deakin as contractor and subcontractor by reason of the operation of s.64 of the Judiciary Act 1903 (Cth). That section provides:

" In any suit to which the Commonwealth or a State is a party, the rights of parties shall as nearly as possible be the same, and judgment may be given and costs awarded on either side, as in a suit between subject and subject."

Section 64 does not subject the Commonwealth to the operation of State laws, but the provisions of State law may be the measure by reference to which rights and obligations are ascertained in suits to which s.64 applies: cf. per Dixon C.J. in The Commonwealth v. Anderson (1960) 105 CLR 303, at p 310. If, as the majority held in Maguire v. Simpson (1977) 139 CLR 362, s.64 affects substantive rights as well as procedural rights, the substantive rights of the Commonwealth enforceable against other parties in a suit to which that section applies and the substantive rights of other parties enforceable against the Commonwealth in such a suit are assimilated to the substantive rights enforceable by one subject against another.

3. The application of s.64 is subject to a condition precedent which is to be found in its introductory words: "In any suit to which the Commonwealth or a State is a party". These words show that "the essential condition of the application of s.64 is the existence of the suit to which the Commonwealth is a party" or to which a State is a party (The Commonwealth v. Anderson, at p 310, and see China Ocean Shipping Co. v. South Australia (1979) 145 CLR 172, at p 204; Crouch v. Commissioner for Railways (Q.) (1985) 59 ALJR 831, at p 832; 62 ALR 1, at p 3). The name of the Commonwealth or a State must appear as a party to the suit but, by itself, that is not sufficient validly to constitute a suit. Before a suit is validly constituted, two partly coincident elements must be present: first, that the suit is brought to obtain a remedy which can be granted against the defendant if the relevant facts are established; and second, that it is brought in a court of competent jurisdiction. Section 64 can operate "only when the court has jurisdiction" (Maguire v. Simpson, at p 384). When the Commonwealth or a State is the party against whom a remedy is sought, some constitutional or statutory warrant is required to make the Commonwealth or a State amenable to the exercise of federal judicial power: Johnstone v. The Commonwealth (1979) 143 CLR 398, at p 401.

4. Section 78 of the Constitution empowers the Parliament to confer rights to proceed against the Commonwealth or a State and s.75(iii) of the Constitution confers jurisdiction on this Court in any matter in which the Commonwealth is a party. There has been some difference of judicial opinion as to whether s.75(iii) operates without the assistance of any law made pursuant to s.78 to impose substantive liability on and to authorize proceedings against the Commonwealth in this Court: see The Commonwealth v. New South Wales (1923) 32 CLR 200; Musgrave v. The Commonwealth (1937) 57 CLR 514, at pp 546-547,550; Werrin v. The Commonwealth (1938) 59 CLR 150, at pp 161,165-168; Asiatic Steam Navigation Co. Ltd. v. The Commonwealth (1956) 96 CLR 397, at pp 416-417, 422-423; The Commonwealth v. Anderson, at pp 308-309; South Australia v. The Commonwealth (1962) 108 CLR 130, at pp 139-140,148; Maguire v. Simpson, at pp 371,404. The better view is, in my opinion, expressed by Higgins J. in The Commonwealth v. New South Wales, at pp 219-220:

" ... to give jurisdiction to a particular Court over actions or matters of a certain character is not to make a matter actionable or justiciable if it is not otherwise actionable or justiciable under some law to which the parties are alike subject; and the King in right of one State is not subject to any law binding him in right of another State, or of the Commonwealth, unless by force of some positive enactment; and sec. 78 was designed to supply such an enactment, through the Federal Parliament."

5. The Constitution thus draws a distinction between the conferring of rights to proceed against the Commonwealth or a State and the conferring of jurisdiction to entertain a suit brought to obtain a remedy against the Commonwealth or a State when a right to proceed is conferred. If no right to proceed on a cause of action has been conferred by a law made pursuant to s.78 of the Constitution, no suit invoking federal jurisdiction against the Commonwealth or a State on that cause of action is validly constituted, and s.64 does not apply. In China Ocean Shipping Co., an action to limit liability under s.504 of the Merchant Shipping Act 1894 (Imp.) was brought against the State of South Australia in the Supreme Court of that State. Section 64 was held to be inapplicable. Gibbs J. said (at p.205):

" Before it can be said that a State is a party to a suit, it must be shown that there is some law of the Commonwealth which enables the State to sue or be sued in the case in question. The Parliament has power to make laws conferring rights to proceed against a State in matters within the limits of the judicial power: s.78 of the Constitution. If a suit is brought against a State in pursuance of a law made under s.78, the provisions of s.64 of the Judiciary Act will apply. The source of the power to enable proceedings to be brought by a State is not so clear (cf. Maguire v. Simpson (at pp 404-405), per Jacobs J.) but that question does not arise here. By s.58 of the Judiciary Act any person making any claim against a State, whether in contract or in tort, in matters of federal jurisdiction may bring a suit against the State, and s.64 would apply in any suit so brought, but the claim in the present case is not either in contract or in tort. It was not suggested that there is any law of the Commonwealth which confers a right to proceed against a State in a limitation suit. For these reasons, the present suit is not one to which a State is a party within the meaning of s.64."

6. A law made pursuant to s.78 must confer rights to proceed against the Commonwealth or a State before s.64 applies, for s.64 applies only when a right to proceed is conferred aliunde. Although it was not thought in China Ocean Shipping Co. that the State's immunity from a limitation suit was lifted by s.64, it is submitted in the present case that s.64 does not require a plaintiff in a suit against the Commonwealth to have a right to proceed against the Commonwealth arising independently of the section, and that, if a subject's obligation in particular circumstances is enforceable by suit, a similar obligation may be enforced against the Commonwealth in like circumstances provided a suit is commenced. Since rights and remedies are correlative, so the argument runs, and the remedies to be granted in a suit to which the Commonwealth is a party enforce substantive rights as nearly as possible the same as in a suit between subject and subject, the substantive rights enforceable against the Commonwealth are as nearly as possible the same as the rights enforceable against a subject.

7. This argument derives support from opinions expressed in two cases preceding China Ocean Shipping Co., namely, the opinions of Kitto J. in Asiatic Steam Navigation Co.Ltd., at p 427, and of Gibbs and Jacobs JJ. in Maguire v. Simpson (at pp 381,405). In the latter case, after reviewing a number of cases in which s.56 of the Judiciary Act had been mentioned as the section conferring or contributing to the conferring of rights to proceed against the Commonwealth in tort, Gibbs J. expressed the opinion that "it was s.64, unaided by s.56, that rendered the Commonwealth subject to the State legislation considered in those cases". It may be that s.64, unaided by s.56, rendered the Commonwealth subject to State legislation but that was in the field of tort, and in that field there is no doubt that the subject has a right to proceed against the Commonwealth. In my opinion, that right is conferred by s.56. Once s.56 lifts the Commonwealth's immunity in tort, s.64 might apply to prescribe the measure of the Commonwealth's liability. With all respect, I am unable to accept the argument that s.64 itself confers rights to proceed against the Commonwealth or a State. The actual decision in Maguire v. Simpson does not require its acceptance. In that case, where it was held that s.64 affects the substantive rights as well as the procedural rights of the litigants, no question arose as to the Commonwealth's immunity from suit. No remedy was sought in that case against the Commonwealth or against any party being sued on behalf of the Commonwealth.

8. The introductory words of s.64 are inconsistent with its conferring a right to proceed against the Commonwealth or a State. Those words define the condition precedent to the application of s.64, the following words contain its substantive provision. To treat the substantive provision as conferring a right to proceed against the Commonwealth or a State, it is necessary to treat the condition precedent as satisfied whenever the right is purportedly exercised. That is to say, a right to proceed against the Commonwealth or a State is conferred whenever a party proceeds against the Commonwealth or a State. Upon that construction, the introductory words contain no condition precedent. That construction should be rejected. The true construction of the section requires, in satisfaction of the condition precedent, a suit commenced in exercise of a right to proceed. That right must be conferred by another provision. When the right to proceed is conferred and exercised, s.64 prescribes the rights to which effect is to be given by the court in granting a remedy. In actions for tort, s.56 of the Judiciary Act has been construed as conferring a right to proceed against the Commonwealth either alone (see Musgrave v. The Commonwealth, at pp 533,544,550; Washington v. The Commonwealth of Australia (1939) 39 SR(NSW) 133, at p 142; Suehle v. The Commonwealth (1967) 116 CLR 353, at p 355; Downs v. Williams (1971) 126 CLR 61, at p 82) or in conjunction with s.64 (see, for example, Baume v. The Commonwealth (1906) 4 CLR 97, at pp 110,118; Pitcher v. Federal Capital Commission (1928) 41 CLR 385, at pp 391, 392-393, 395-396; Shaw Savill and Albion Co.Ltd. v. The Commonwealth (1940) 66 CLR 344, at pp 352-353; Parker v. The Commonwealth (1965) 112 CLR 295, at p 300; Downs v. Williams, at p 99; Groves v. The Commonwealth (1982) 150 CLR 113, at pp 121-122. It has not hitherto been thought that s.64 alone confers a right to proceed. One cannot equate s.64 with the statutory provisions considered in Farnell v. Bowman (1887) 12 App Cas 643 which were held to make the Government of New South Wales liable in tort. Those provisions conferred an express right to proceed against the nominal defendant: "The petitioner may sue such nominal defendant at law or in equity in any competent Court ...". Corresponding language may be found in ss.56,57,58 and 59 but not in s.64 of the Judiciary Act. It is only when one puts ss.56 and 64 together that one finds language corresponding with the Farnell v. Bowman provisions (cf. Maguire v. Simpson, at p 381). Similarly, the statutes considered in Jamieson v. Downie (1923) AC 691; Welden v. Smith (1924) AC 484 and The Crown v. Dalgety &Co.Ltd. (1944) 69 CLR 18 (see per Williams J. at pp 46-47) each contained a provision conferring rights to proceed against the Government as well as a provision relating to the law governing the determination of claims against the Government.

9. The general plan of the Judiciary Act is consistent with the view that ss.56,57,58 and 59 are the provisions enacted pursuant to s.78 of the Constitution (cf. per Higgins J. in The Commonwealth v. New South Wales, at pp 220-222) and that s.64 applies in a suit against the Commonwealth or a State when a right to proceed is conferred by one of those sections or by a federal law other than the Judiciary Act. Jurisdiction is conferred on the courts of the States in matters within the limits of their several jurisdictions by ss.39,39A and 44. The system of law which is to be applied or to which reference must be made by a court whose jurisdiction is duly invoked is defined by ss.79 and 80. The rights derived from that system, whether substantive or procedural, to which effect is to be given by the court in a suit to which the Commonwealth or a State is a party are prescribed by s.64. If rights to proceed are not conferred by ss.56,57,58 and 59, it is difficult to see what operation those sections have except, perhaps, to restrict the bringing of suits in respect of the claims therein mentioned to the courts prescribed in the respective sections: see Washington, at pp.141-142. In the case of ss.57 and 59, that restriction would simply repeat the restriction imposed by ss.38(c) and (d) and 39(1). If s.64 were held to be a law enacted in pursuance of s.78 of the Constitution and to confer rights to proceed against the Commonwealth or a State on all causes of action which might lie against a subject, the limitation of rights to proceed to claims in contract and in tort which inheres in ss.56 and 57 is entirely removed. Neither the text of ss.56,57 and 64 nor their context in Part IX of the Judiciary Act warrants that construction.

10. I would hold that s.64 is not a law conferring rights to proceed against the Commonwealth or a State. As the present suit is not brought against the Commonwealth in respect of a claim in contract or in tort, s.56 confers no rights to proceed against the Commonwealth. Nor does any other federal law. The suit is not validly constituted and the demurrer should be allowed.

11. The same conclusion may be reached by other paths. A suit to enforce a claim of charge under the Act can be brought only in the Supreme Court of Queensland or in some other court of competent civil jurisdiction in that State (s.12). A charge under the Act is a novel statutory right and a remedy enforcing the right can be sought only in the courts which have been invested with the jurisdiction to grant the remedy: cf. Graziers' Association of New South Wales v. Durkin (1930) 44 CLR 29, at p 36. Only the Queensland courts have jurisdiction over the subject matter of claims under the Act. There is no jurisdiction in this Court to grant a remedy against the Commonwealth under s.12 of the Act. The State law cannot invest that jurisdiction in this Court. No jurisdiction under s.12 of the Act is invested by s.64 or by any other federal law. Yet s.75(iii) confers on this Court jurisdiction in all matters in which the Commonwealth is a party. The jurisdiction of this Court under s.75(iii) cannot be diminished or destroyed. If a remedy to enforce a right cannot be granted by this Court, the remedy cannot be granted against the Commonwealth. Therefore it is not possible to impose on the Commonwealth a liability which is not justiciable in this Court (cf. The Commonwealth v. Anderson, at p 310). The liabilities which the Act purports to impose on employers, not being justiciable in this Court, cannot be imposed on the Commonwealth.

12. A further obstacle in the way of applying s.64 to a suit brought against the Commonwealth in pursuance of s.12 of the Act should be mentioned. It has to do with the nature and extent of the rights which, it is said, s.64 imports into a suit brought in pursuance of s.12 of the Act. The rights of the parties in a suit to which s.64 applies may not be precisely the same as the rights of subject parties in a similar suit. The law which defines the rights of subject parties may not be applicable in every respect to a suit in which one of the parties is the Commonwealth or a State. Indeed, the very hypothesis on which s.64 is constructed is that the law by reference to which the rights of the parties are ascertained under that section is a law which is not applicable or not applicable in every respect to a suit in which the Commonwealth or a State is a party. When Dixon C.J. in The Commonwealth v. Anderson, at p 310, noted that "it is the rights of parties as in a suit between subject and subject, not the law, that are to apply as nearly as may be", I understand him to be affirming the application of s.64 in cases where the referential law could not be applied in the instant suit but where its operation in a suit between subjects would create rights that can be imported to determine the rights of the parties in the instant suit. The words "as nearly as possible" show that the imported rights need not be identical with the rights of the parties in a suit between subject and subject, but the elasticity of the test surely stops short of including rights which are substantially different in nature or extent from those to which the referential law would give rise in a suit between subject and subject.

13. Assuming, contrary to my opinion, that s.64 applies to a suit against the Commonwealth brought pursuant to s.12 of the Act, the rights and the reciprocal obligations which it would import affecting the Commonwealth as employer would be substantially different from the rights and obligations which would affect a subject employer under the Act and to which a suit brought under s.12 of the Act would give effect if the Commonwealth were not a party. Section 64 is incapable of affecting the rights and obligations of the Commonwealth prior to the bringing of a suit. If s.64 is construed as affecting the rights and obligations of the Commonwealth when a suit is commenced as though the Commonwealth's rights and obligations had theretofore been affected by the Act, the operation of s.64 would produce a substantially different set of rights and obligations from those which the Act produces.

14. The Act provides for a statutory charge binding the money payable by the employer to the contractor when the notice of charge is given. The rights and obligations of the employer, the contractor and the subcontractor inter se are immediately and reciprocally affected. But as the Act does not bind the Commonwealth, the giving of a notice of charge to the Commonwealth is ineffective to bind the moneys payable by the Commonwealth to a contractor and the contractor retains his contractual right to be paid. Take the present case. If Maltry had demanded the whole of the moneys due to it under its contract with the Commonwealth after Evans Deakin had given the Commonwealth a claim of charge, on what ground could the Commonwealth have refused to pay them? Not on the ground that it was bound by s.11 of the Act to retain an amount sufficient to satisfy the claim for, in the absence of suit, the essential condition of the application of s.64 is not satisfied and the Commonwealth's contractual obligation to pay Maltry what is due under the contract is unaffected. If the Commonwealth, having refused to pay Maltry the amount claimed by Evans Deakin, had been sued on the contract by Maltry, would the Commonwealth have had any defence? Unless the Commonwealth could have set up as against Maltry the right to retain the amount specified in Evans Deakin's notice of claim, it would have had none. An employer's statutory right to retain such an amount against the contractor flows from the employer's statutory obligation to retain that amount to satisfy a claim of which notice is given pursuant to s.10 of the Act. But the Commonwealth's statutory obligation to retain an amount claimed by a subcontractor who gives a notice of charge arises, if at all, no sooner than the commencement of a suit by the subcontractor seeking to enforce the charge. The charge does not arise before any suit is commenced. It can hardly be said to arise in favour of the subcontractor when the contractor commences a suit to recover what is due to him under his contract.

15. If the Commonwealth, prior to the commencement of a suit by a subcontractor but after the service of the notice of charge, had paid the contractor what was then payable to him, how would s.64 operate once the subcontractor's suit was commenced? Either the payment to the contractor would be treated as effective to discharge the Commonwealth's contractual obligation when it was made, so that there are no moneys to which the charge may attach when the suit is commenced, or the payment is treated as a failure "to retain the amount that he is required to retain" under s.11(2) so that the Commonwealth becomes "personally liable to pay the subcontractor" as well as the contractor.

16. The anomalies inherent in treating s.64 as conferring a right to proceed against the Commonwealth as an employer are concealed when the contractor and subcontractor are both parties to a suit against the Commonwealth brought pursuant to s.12 of the Act. If the court proceeds as though the notice of charge was effective to bind the moneys payable to the contractor when it was given, the Act and s.64 appear to operate harmoniously. But the appearance masks another anomaly. An employer is authorized to pay into court the amount that he is required to retain when a notice of charge is given and thereby to be discharged of all further liability in respect of the amount paid (s.11(5) and (6)). Before a suit is brought, the Commonwealth is neither under an obligation to retain the amount claimed in a notice of charge nor entitled to pay that amount into court and thereby discharge its liability to the contractor. The Commonwealth could not avoid litigation under any contract under which it is liable to pay money to which a charge under the Act contingently attaches.

17. The remedy of a suit to enforce a charge against an employer and the right to a charge on the moneys payable by an employer to a contractor are inseparable. Like the right and remedy in Barraclough v. Brown (1897) AC 615 they are given "uno flatu, and the one cannot be dissociated from the other" (per Lord Watson, at p 622). The right effectively arises on the giving of a notice of charge, the event on which the chief provisions of the Act depend. Consistently with the scheme of the Act, the time when the right arises cannot be deferred until the remedy is sought. Yet an attempt to employ s.64 to import the subcontractor's right against the Commonwealth as employer necessarily defers the existence of the right until the suit to enforce the charge is brought. There is a substantial difference between the operation of the Act on the rights and obligations of the three parties concerned - the employer, the contractor and the subcontractor - when a notice of charge is given and the operation which s.64 would have when a suit to which the Commonwealth is a party is commenced.

18. In my opinion, s.64 confers no right to proceed against the Commonwealth in a suit brought pursuant to s.12 of the Act; it imposes no liability which is justiciable in this Court in a suit under s.75(iii) of the Constitution and it is incapable of importing rights and obligations affecting the Commonwealth which are substantially different from the rights and obligations of a subject employer under the Act. For these reasons, I would hold that s.64 has no application to the present proceedings.

19. It follows that the Commonwealth cannot be liable in the present action. I would allow the appeal, set aside the judgment of the Full Court and in lieu thereof allow the demurrer.

Orders

Appeal dismissed with costs.