Community and Public Sector Union & Ors v Commonwealth of Australia

[1995] HCATrans 195

TRANSCRIPT
OF PROCEEDINGS
AUSCRIPT
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IN THE HIGH COURT OF AUSTRALIA

MELBOURNE OFFICE OF THE REGISTRY

No. M36 of 1995

BETWEEN:COMMUNITY AND PUBLIC SECTOR UNION

STEPHEN MOSS and DENNIS YOUNG

Plaintiffs

- and -

COMMONWEALTH OF AUSTRALIA

MINISTER FOR PRIMARY INDUSTRIES AND ENERGY

Defendants

DAWSON J (In Chambers)

AT MELBOURNE, TUESDAY THE 27TH DAY OF JUNE 1995

Continued from 23.6.95

MR R. MERKEL QC:   I appear with my learned friend, MR P. MORRISSEY, for the plaintiffs in that matter.

MR R. TRACEY QC:   I appear for both respondents.

HIS HONOUR:   Yes.

MR MERKEL:   Can I say, your Honour, that we are indebted for the time your Honour has given us.  It has not helped the matters in difference, but I think, your Honour, it appears that factually there is probably nothing of great significance between the two parties and the application essentially involves the question of principle.  Could I hand up at the outset, your Honour, the orders that are proposed?  They are slightly different to those in the form that were handed up to your Honour with the papers this morning. 

The significant difference, your Honour, is that in the affidavit of Mr Haynes in the alternative form of injunctive relief, exhibits 1 to 4 are the Commonwealth's own comparisons of the conditions of Commonwealth service as against current conditions of State service, and although we may not agree with every detail, your Honour, for the purposes of any injunction, we would say that that is an adequate definition of the terms and conditions recognised by the Commonwealth.

If I go to the heart of the matter between the parties, your Honour, it seems that the common ground between them is as follows:  that the Commonwealth are proposing to transfer all officers engaged in the function of carrying out quarantine services from South Australia, Queensland, Victoria, New South Wales and the Australian Capital Territory to the service of the Commonwealth and has made an offer ‑ ‑ ‑ 

HIS HONOUR:   South Australia, Queensland ‑ ‑ ‑ 

MR MERKEL:   Victoria, New South Wales and the Australian Capital Territory.  The process by which that is to be achieved is to make an offer of employment on terms and conditions proposed by the Commonwealth, with the employee having the option, if he does not accept that offer, to remain in the State service which will involve, your Honour, no longer performing the quarantine function which is to be taken over by the Commonwealth, but to be used or relocated within the State hierarchy with some minor financial support from the Commonwealth.

The effect of that, your Honour, is that the proposal is to transfer the quarantine services from State provided services to the Commonwealth and performed by the Commonwealth to the public.

HIS HONOUR:   Well, as I understand the material, the States have in fact been performing these functions on an agency basis; have they not?

MR MERKEL:   Yes, your Honour.

HIS HONOUR:   It is hardly a transfer; is it?  It is a termination of the agency and offer of employment to those who have been performing those functions.

MR MERKEL:   With respect, your Honour, the agency situation, I think, has been in existence in effect since the Federal Act in 1908.  What has never occurred, your Honour, is the transfer of the department's, using the department with a small "d" at this stage, from the States to the Commonwealth.  Can I ‑ ‑ ‑ 

HIS HONOUR: There is no transfer of the department; is there? I mean, when the Constitution speaks of transfer of department in section 84, it is speaking of the transfer of an entity.

MR MERKEL:   I think, your Honour, that is where I need to take your Honour through the material, but can I make it quite clear, your Honour, that that is what clearly the material demonstrates ‑ ‑ ‑ 

HIS HONOUR:   I might just make it clear what I have in mind.  If you look at section 85, for instance, upon the transfer of a department, the property used in connection with the department becomes vested.

MR MERKEL:   That is so, your Honour.

HIS HONOUR:   In other words, it is the entity going over as such.  All I have in mind here is this looks something that is somewhat less than that.

MR MERKEL:   I understand what your Honour puts, and I think our answer is that ‑ ‑ ‑ 

HIS HONOUR: Can I put also what is in mind so you can deal with it while I am interrupting you, and if those who are being transferred, according to your submissions, have rights under the Constitution, they would not lose those rights by virtue of any offer or acceptance of any offer, provided that what was taking place was a transfer.

MR MERKEL: Your Honour, there are a number of issues there, but may I say this: that the Commonwealth's position is that this is an individual offer to an individual employee of a contract to resign from the State service and enter the Public Service and the Commonwealth's response to our case is that they are operating outside of the Constitution and dealing individually with each employee and therefore ‑ ‑ ‑

HIS HONOUR:   But what I am putting to you is either they are right or they are wrong.  If they are wrong, then the Constitutional rights which are afforded by section 84 are unaffected.

MR MERKEL:   Well, your Honour, can I indicate that that would be subject to the question of whether there is a waiver or an acquiescence by employees in taking the transfer under individual contracts of what would otherwise be their rights.  We have a real concern, your Honour, that without undertakings by the Commonwealth, that they would not treat acceptances as in way diminishing or waiving the rights.  There is a serious risk.

HIS HONOUR:   You cannot waive Constitutional rights; can you?

MR MERKEL:   Well, your Honour, there is simply not case law, as I understand the cases on this kind of question with respect to this issue under section 84.  In other words, the cases say that the Commonwealth and the States cannot legislate themselves out of the entitlements, but there has never been an instance, your Honour, where the courts have considered that if the employee concerned has, as the cases make it clear, a Constitutional right, that that right being Constitutional cannot be waived or given up by the employee.  One would think that quite compelling reasons would come forward, your Honour, as to why an employee could give up that right.

It would be rather odd, for example, if an employee could not leave the Public Service or could not refuse to continue office, but that is an untested area, your Honour, and as long as ‑ ‑ ‑ 

HIS HONOUR: Well, it is easily overcome anyway. I mean, if he accepts the offer subject to such rights as he may have under the Constitution.

MR MERKEL:   Well, your Honour, we have intercepted this process, as your Honour is aware, because the offers were to be accepted and deemed operative on Friday.  It may be, your Honour, that the Commonwealth can overcome the kind of problem your Honour has raised with me, if they could satisfy your Honour that on no view of the facts could any employee be prejudiced, but your Honour, we do have an anterior question and it is this:  your Honour, the reality is that in answer to your Honour's earlier question, if the employees have a right to be transferred under their existing conditions, and that means a right which the Commonwealth has an obligation, a countervailing obligation, not to make an offer. 

I have not expressed it very well, but your Honour, if we are right, this whole process is unlawful.  There is no right to make offers which entitle the employees to remain in the public sector.  There is no right to go on an individual basis.  Under sections 69 and 84, these employees become employees of the Commonwealth and what is violated, your Honour, is the whole Constitutional process which was carefully the subject of debate and consideration at the conventions, has been operated upon rigorously until now and is being, we would say if we are right, blatantly disregarded by the Commonwealth and we say that, your Honour, if there is a Constitutional right, it  is being removed, albeit if your Honour is right, replaced by a right to damages, but if there is a Constitutional right, your Honour, we say it is simply not a light matter for the Commonwealth to act if ‑ ‑ ‑ 

HIS HONOUR:   But that cannot be right, Mr Merkel.  There is no right not to be - I will put it this way:  the rights which are given by section 84 arise upon the transfer of a department under section 69 and perhaps otherwise by the transfer of a department, but there is no Constitutional right of an individual not to be transferred.

MR MERKEL:   No, the transfer, your Honour, is operative under ‑ ‑ ‑ 

HIS HONOUR:   Perhaps transferred is the wrong word, not to have an offer made in a particular way which is not in accordance with section 84.

MR MERKEL:   I think, your Honour, I am not sure that I am in any disagreement with your Honour at all, but can I indicate to your Honour how we see the process as working, because I think I need to start at the beginning, your Honour, for your Honour to appreciate ‑ ‑ ‑ 

HIS HONOUR:   All right.  I will not interrupt you any more.

MR MERKEL:   No, no.  I am indebted to your Honour for expressing your Honour's concerns about what we are putting and can I answer it by going to the beginning, your Honour?  I will not take your Honour to documents, but can I state what appear to be the essential underlying facts and are demonstrated by the evidence.  Your Honour, in the course of the Convention debates, it was clear that there was a considerable concern that officers in the State Public Service when their departments are transferred to the Commonwealth after Federation should be entitled to receive the terms and conditions that they had under State employment upon the transfer and that it was fairly clear that it became common ground that certain areas of function, and I emphasise function, your Honour, would be transferred to the Commonwealth and those are set out at section 69.

The reason why the distinction was drawn between Customs and Excise, your Honour, and the other activities was that the others were to follow Federation. Customs and Excise was to be transferred upon Federation. Now, what the debates show, your Honour, is that the concern had nothing to do with equity between governments. Section 69 and 84 were carefully negotiated and drafted to give a right to the servant upon transfer, which was to be effected under the Constitution to the existing terms and conditions of employment in the State service. It was a right to prevent injustice to the individual and it was a right that was to be given by the Constitution to the individual. But there was no question, your Honour, of the individual being part of any negotiating process.

The Constitution protected, in effect, the minimum conditions upon which the transfer could be effected. To ensure, your Honour, that that process was adhered to, section 69 was expressed in terms that the date of transfer was to be the date proclaimed by the Governor-General and section 69 operates upon the proclamation being the department being transferred and that automatically picked up the terms of section 84 which are mandatory. So that section 84, your Honour, says that upon the transfer all officers of the department become subject to the control of the executive government and those retained are entitled to the terms and conditions effectively, including accruing rights that they had as State servants.

I should say, your Honour, that the retained itself is limited. The cases have said that a officer is unlawfully dismissed, if dismissed in accordance with Commonwealth conditions, the only unlawful entitlement to his dismissal would be under State conditions as at the date of transfer. So that if, for example, in some of the cases that under State law he was entitled to work until 70, Commonwealth until 65, the Constitution protected the right to work until 70. Now, your Honour, those provisions have not been regarded as having any contractual element at all as far as the employees are concerned. Employees can negotiate above the terms and conditions, but the courts have been rigid in their protection of employees not being subjected to any employment below any term and conditions.

[12.18pm]

HIS HONOUR:   There are two cases, are there not?

MR MERKEL:   There are a few, your Honour.

HIS HONOUR:   Are there?

MR MERKEL:   I will take your Honour to them.  The critical ones, your Honour, demonstrate these as - as individual rights enforceable by the individual against the Commonwealth, and which cannot be abrogated by Commonwealth or State legislation.  That is the essence of it, but there are quite a few under the sections, your Honour.  But the critical point that is established is the following, your Honour, that I said to your Honour before that this was functional rather than departmental.  In the course of the debates, your Honour, the original drafts had the departmental concept as a capital D.

That was changed to a small "d", your Honour, but more importantly, as at -as at Federation, and in the leading period leading up to Federation, just taking quarantine as an example, there never was a Department of Quarantine in none of the States.  Quarantine then, as now, and as since, has usually been part of a public health department, but a quarantine - people in the public health performing quarantine services.  So, that your Honour will see in our material that they were able to identify the individuals who were forming the small "d", department of Quarantine in the bigger capital, the Department of Public Health or elsewhere, and in the convention debates and in Quick & Garran, your Honour will see it is referred to quarantine - I think in Quick & Garran it is referred to as a sub department.

So, that I thought it may have been in agriculture, but your Honour will see that in the financial allocations for employees who were within the quarantine departments of a State, there is a calculation to the very dollar of the cost of labour, which was essentially the department referred to.  It is as simple as that, your Honour.  If department means the political department in the sense of Department of Finance, Department of Posts and Telegraphs, and so forth, your Honour, this would effectively read out, I would probably think, all bar Posts and Telegraphs and Customs.

So, that if this Constitution, your Honour, is to be interpreted in the circumstances which it was entered into, the quarantine clearly relates to the sections of the State Public Service providing the quarantine service at the time of Federation, and that the function upon - and that what section 69 is concerned with, is the transfer of the body performing those functions in the State. Otherwise, your Honour, it becomes meaningless, and inutile and has no operative effect.

HIS HONOUR:   Well, I understand the point.

MR MERKEL:   And, your Honour, nothing has happened since.  If anything, what the evidence shows is that the Quarantine Department, since Federation, has now become more easily identified.  And if your Honour looks at the present material, your Honour will see we have a graph, for example, in Queensland, and I do not need to take your Honour to it yet, but your Honour will see that the current graph or chart, I should say, of employees performing quarantine services in Queensland, is now to be replaced by a chart of the Commonwealth, and your Honour, we have not been able to see any - any relevant difference.

There may be some minor change that - that we have not noticed, but effectively, everyone on 23 June who was performing quarantine services in South Australia will be picked up by the Commonwealth's offer and perform the quarantine services after 23 June for the Commonwealth and there is a transfer of the whole body of employees effected.  Now, your Honour, we make this point.  And that seems to be common ground.  My learned friends may say that there are some employees who are - may be not - may be offered because they perform in part quarantine services, and we can leave those aside for the moment.

Our concern, your Honour, is that the people who are being transferred constitute, using the words of McTiernan J, the body of persons providing these services in a State.

HIS HONOUR: You say transferred, but, of course, there is no transfer. There is an element of compulsion about transfer when looks at - when one looks at section 69 and 84. They were provisions which look to a situation in which the Commonwealth, as at Federation, had no apparatus, as it were, to perform functions which were assigned to it by the Constitution in the case of quarantine by section 51(ix), I think it is. And it was a way in which they could be provided with this apparatus quickly, and compulsorily. But, what you have here is not a transfer at all, but the making of an offer to individuals who are free to accept it or refuse it.

MR MERKEL:   Yes, your Honour.  But, the validity of that, your Honour, does not - it cannot depend upon whether it occurred in 1902 or 1995.

HIS HONOUR:   No.  That is not the point.  It depends on whether there is a transfer or not.

MR MERKEL:   Yes, your Honour.

HIS HONOUR:   With that element of compulsion which is part and parcel of a transfer.  That is why their rights were preserved, because they may have been shifted involuntarily.

MR MERKEL:   Well, not - but, your Honour, our answer to your Honour is that there is not one relevant distinction between what is occurring today and what may have occurred in 1901 or 1910 or '20.  The people performing the quarantine services were employed in State services.

HIS HONOUR: May be. That is looking to what they are doing, but there is a big difference in the sense that in 1901, or for that matter, now under section 69, if it were a matter of being transferred, the transfer would automatically take place by virtue of the Constitution - by force of the Constitution, and in the case of quarantine, a proclamation.

MR MERKEL:   Your Honour ‑ ‑ ‑ 

HIS HONOUR:   Which is not the situation here.

MR MERKEL:   Your Honour, that merely comes down to this fundamental question.  It appears to us, your Honour, that what section 69 and 84 were doing was protecting the individuals in the State service which would be disappearing to a - become a Commonwealth service, the right to have their employment continued.

HIS HONOUR:   No.  It was not that.  It was to protect them in the event of their being transferred.

MR MERKEL:   But - but, your Honour ‑ ‑ ‑ 

HIS HONOUR: There is nothing in the Constitution which says that the Commonwealth cannot set up its own quarantine service.

MR MERKEL:   No.  There is nothing that says that.

HIS HONOUR:   But, it cannot do so, by making offers to people who are employed in the State.

MR MERKEL:   Well, your Honour, that is the point.  If - if they can effectively avoid section 69 and 84 ‑ ‑ ‑ 

HIS HONOUR:   But, you see, you beg the question.  You are not avoiding the sections if you are not transferring anyone.

MR MERKEL: But, your Honour, with respect, the - the transfer is by operation of law under the Constitution, not by Act.

HIS HONOUR:   That is right.  And when that happens, that is a transfer.  When you make an offer which can be refused, that is not a transfer.

MR MERKEL:   That is - that is not a transfer, your Honour.  But what we say is that the combined operation of section 69 and 84 constitutes the code by which the bodies performing the service - the quarantine services in the States are to become part of the Commonwealth body, with the concomitant rights that section 84 gives.  If it were otherwise, your Honour, then the proposal to make offers renders nugatory the protection given by section 84.  Just renders it nugatory.

HIS HONOUR:   Well, it does not, because the protection is given against conditions being reduced when a person is transferred against his will, if it may be, from the State Public Service to the Commonwealth Public Service.  But, that is a different situation from the situation where he voluntarily accepts an offer which is made to him.  I mean, take the position that the Commonwealth advertises these positions as it could do, and all the officers in the State being qualified apply, and their applications are accepted.  You could not, in that situation, say that section 69 or 84 applied, could you?

MR MERKEL:   Well, your Honour ‑ ‑ ‑ 

HIS HONOUR:   And if that is so, what is the difference between that and the position here.

MR MERKEL:   Your Honour, the - when one reads the Convention debates, and one reads the text, we say that the underlying assumption of section 69 and 84 was that at a date after Federation, and with customs and excise upon Federation, all the employees were to be on transfer entitled as a matter of right ‑ ‑ ‑ 

HIS HONOUR:   On transfer, yes.

MR MERKEL:   And - but, a second step, your Honour, which is the critical one in dealing with what your Honour is putting to me, and it is this, your Honour, that we say that save for setting up its own department and advertising, the - if the Commonwealth wished to take over the State employees providing these services, then the protection given by section 84, your Honour, was to be pursuant to the section 69 route, not, in effect, an avoidance scheme by saying, well, we can avoid all of the problems under section 84 by just making offers of employment individually on the pain of the employees not having a function left, because people in the State services, your Honour, and many had been performing in quarantine services for most of their working lives, they will now no longer have a State employment.  And, your Honour, the whole purpose of this combined scheme was to ensure that does not happen.

That by removal of the service to the Commonwealth, the employees performing those services in the State will not only have their security of employment guaranteed under the Constitution, but it would be protected. That is continuity guaranteed and the terms and conditions protected. Now, what is suggested here, your Honour, would be a classic Constitutional avoidance scheme which would totally defeat the sole purpose of these sections, which is both continuity and protection. Not - no point in getting protection of terms and conditions if you can have your service terminated at will by the Commonwealth by saying we are not going to take you over.

And that is what we say must be the underlying assumption in section 69 and 84, because, your Honour, were it otherwise, the so called benefits given and the individual rights are illusory;  and they are substantial rights, your Honour.  They are rights throughout the course of employment;  and, your Honour, it is particularly apposite with quarantine, because there was never a department, as such.  There were only individuals providing quarantine services as a distinct service.

So, we say that what sections 69 and 84 anticipate is that when the Commonwealth proposes to employ those people in the States performing the services, they must do it, first by proclamation, and then by sections 84, and if it applies, and only for the extent it applies, 85.  But 85 is consequential upon the transfer.  So, it cannot be ‑ ‑ ‑ 

HIS HONOUR:   So does 84.

MR MERKEL: Well, yes, your Honour. But - but it works in this stage, your Honour. 69 requires a proclamation to effect the transfer, and we say it must be an underlying assumption that this constitutes a code by which these State functions and the persons performing them become Commonwealth functions. Section 84 then says, consequent upon the proclamation, the officers become subject to executive control. There is no element of voluntariness involved in the employee transferring. It was something that occurred under the Constitution.

Then 85, your Honour, really operates, upon the transfer of the department, property follows.  In other words, it is inverting the process by saying the department requires a transfer of property.  What really is required is no more than that the individuals, your Honour, be transferred by reason of the proclamation, the property, to the extent there is any, follows.  Now, your Honour, that simply put, the contest between us comes down simply to this.  That our submission is that the transfer of the function from being provided by the State by State employees to the Commonwealth by a process by which those employees become the persons who provide the service to the Commonwealth as Commonwealth employees, can only occur in accordance with section 69 and 84.  That is our first step.

[12.33pm]

The second step, your Honour, that that means that it can only occur upon proclamation: the officers become transferred, and are entitled as of right under the Constitution to their existing and accruing conditions. The case against this, your Honour, is that the Commonwealth can avoid ever proclaiming the transfer of the service, but can do it through a process outside the Constitution, thereby defeating entirely the rights sought to be guaranteed and secured by Sections 69 and 84.

The response we put to that, your Honour, is that if in l901 anyone said that the Commonwealth could send out individual offers to posts naval etcetera employees, and say, "Here you are, take it or leave it", there would have been an instant response that the Constitution just did not permit it. We say nothing can have changed between l901 and l995. That is really the point between us, your Honour. I should say, your Honour, that the case law has not dealt with this, one assumes, because the Commonwealth has never really thought it open to, in effect, side step the protection of Sections 69 and 84 in this way.

HIS HONOUR:   There was one case which dealt in passing, without coming to a conclusion, with the question of whether the terms and conditions were immutable once the employee had been transferred, or whether they then were subject to the Commonwealth Public Service Act and any amendments, and so on, to that.

MR MERKEL:   Your Honour, can I - did your Honour look at Flint v The Commonwealth?

HIS HONOUR:   No.  Perhaps you can give me the references.

MR MERKEL: Yes. Can I give your Honour - the cases I briefly refer your Honour to, if I can just mention them and hand up copies. Flint v The Commonwealth, which is 47 CLR 274. Le Leu v The Commonwealth, which was 29 CLR 305. Edwards v The Commonwealth, which is 54 CLR 313; and Cosway v The Commonwealth, which is 65 CLR 628. There are others, your Honour, but could I just take your Honour briefly to those.

Possibly the strongest statement is Flint, your Honour.  The headnote, in effect, picks up almost verbatim what was said by Dixon J, and that is, your Honour, that the amount, or the benefit, cannot be reduced by Commonwealth or State legislation.  It is true, your Honour, that that dealt specifically with the pension entitlement, but if one looks at Section 84 that is dealt with in the same way as existing and accruing rights.

What his Honour says at page 278 is that the section gives the transferred officer a Constitutional right which cannot be affected by legislation.

HIS HONOUR:   I have read that.  They are not tempted to expatiate on the meaning of the section, are they?  In fact, it is obvious they avoided it, because it has created many difficulties.

MR MERKEL:   Yes, there is no doubt about that, your Honour.  Le Leu has a passage of Higgins J at page 314.  At point 5 his Honour considers Section 84, and says:

Under that section a transferred officer is to preserve all his existing and accruing rights.  Counsel for the Commonwealth urges that this means no more than that the officer ...(reads)... by an Act of the Commonwealth.

His Honour then discusses preservation, and then down at point 9:

Preserve is not a technical word, but it certainly implies retain, keep intact or unimpaired, and the right to retain existing rights ...(reads)... notwithstanding Section 84 to alter or take away those rights.

HIS HONOUR:   There must be great difficulties with some rights.  I mean, rights of promotion, rights of conferment, and so on.

MR MERKEL:   Yes, your Honour.  The answer I think we would give the cases seems to suggest, is that if, for example, your right under State law is a right that itself can be varied by State law, then it would appear to be likely that that does not offend what Dixon J said in Flint.  So that if your right could be varied, you do not get a better right under State law:  you do not get a better right by being transferred, by making a right that could be varied, and not capable of being varied.  But subject to that, what the cases make it clear, your Honour, is that the Commonwealth was not highly trusted, and the one body that could not reduce rights was the Commonwealth.

Your Honour, that passage of Higgins J is picked up and approved in a joint judgment in Edwards at page 320, but I do not need to take your Honour to that any further.  In Cosway, McTiernan J considered the section at page 636.  His Honour at the bottom of the page picked up the notion of the department as a body.  What his Honour said was Section 84 provides for protection of State rights of officers of the department of the Public Service of the State who as a body pass under the control of the Commonwealth when the department becomes ‑ ‑ ‑ 

HIS HONOUR:   That is somewhat against you, is it not?  And he is rather suggesting what I was suggesting to you there; that it is the compulsory nature of the transfer, the passing as a body, which would not, of course, preclude there being individual offers.

MR MERKEL:   Well, your Honour, I think what his Honour is stating is clearly accurate.  I was using it supportively in this sense, that his Honour talks of the protection of officers who as a body pass to the Commonwealth.  It does not in any way negate what your Honour has put to me, but it does suggest that his Honour was not looking at it as a department with a capital D. 

And that is really - quite frankly, your Honour, the Commonwealth has approached this not so much on the basis that they are entitled to offer individual contracts, but, as I understand it, initially they did not treat it as a matter covered by the Constitution. That they were not transferring a department, because there never was, or there is not a Department of Quarantine, as such. Now the matter is being put under the microscope and comes before the court, the alternative way is, well, Sections 69 and 84 could be circumvented or side-stepped, or, I would add, rendered inutile by just offering all the employees a "take it, or leave it" offer to come across to the Commonwealth.

I suppose that is really the issue, your Honour, whether the Constitution can live with that or not.

HIS HONOUR:   But if you are right, having regard to the cases, the Constitutional right would still exist, would it not?  And it is not something that is capable - I cannot understand how a Constitutional right would be capable of waver, or variation by agreement.  If it cannot be altered by legislation, how can it be altered by the parties themselves?

MR MERKEL: Well, your Honour, the Constitution does not create normal rights as such. I think the answer is that I am not aware of any authority that would answer your Honour's question. The reason why I say that, your Honour, is that of course what your Honour says is right insofar as the Constitution distributes rights, powers or obligations between governments.
The Constitution itself deals with the way in which there can be agreement on how those powers may be redistributed. But where the Constitution in these sections has the unusual task of creating a personal right, it does not appear to us to be inconsistent with that for the person for whose benefit the right is created to indicate that I wish to change it. Putting it in a more realistic way, your Honour, at the moment, if I can just assume there is four weeks long service leave in the Commonwealth Public Service to be taken over 2 two week periods, and in the State service there is five weeks to be taken over 1 period: it is hard to see why an employee could not agree to take the lesser, but, for that employee, may be preferred method of holiday under the Commonwealth.

One can go through a whole range of possibilities where the individual employee may wish to say, "Well, I prefer a different right." Now, my only answer is that there is nothing in the Constitution or the cases that would suggest an employee cannot waive, or give up that right. And the position of the Commonwealth, your Honour, is that they are, in effect, creating a situation where there is a very basic argument, as far as employees are concerned, that these individual contracts necessarily constitute a waiver of the rights that they would otherwise have.

Now, our primary concern, which we expressed to your Honour last Friday, is that if we establish a prima facie case in respect of our Constitutional rights, this whole process, your Honour, is not only misconceived and unlawful, but it is putting to the employees an offer which itself is misleading or deceptive in terms, because it carries the assumption that it is a "take it, or leave it, you have no rights." And we say that is, given the number of employees and the problems that it created, that gives rise to a very considerable mischief. But at the outset, your Honour, if our argument is correct under the Constitution, this whole process is one that is unlawful. That is our real point.

HIS HONOUR:   Well, I understand that.  When it really comes down, you cannot do indirectly what you cannot do directly, and therefore you say the section is ‑ ‑ ‑ 

MR MERKEL:   Yes, your Honour.  That is the essential point.  Now, I should indicate, your Honour, the strength of that point is going to be determinative of this application.  The reason being that, of course, it will be put that these employees can establish their right at a later date, then they can come and try and seek compensation for it.  But we say that really that is a consequential question where you cannot restrain the breach. 

But where the court is in a position of being able to say this is what the Constitution requires, it requires a proclamation, it requires a transfer which is in accordance with the rights to preserve those rights, and if that is a prima facie case that we are able to satisfy your Honour about, then we say prima facie the Constitution should be observed by the Commonwealth. And that becomes a question of quite significant principle.

Now, we, for our part, have specially framed our orders, your Honour, in a way that seeks to not interfere with the transfer. We do not have any wish to stop the process that is being implemented. The process itself does not infringe the Constitution, save that it should be carried out with a prior proclamation. And that can be achieved without any prejudice to the Commonwealth, but it preserves the integrity of the Constitution, and complies with Section 84.

We have put an alternative form of relief, your Honour, which would be protective of the individual's concern, which is the primary concern of the union and the two individual plaintiffs who are subjected to the South Australian and Queensland offer.  Which would mean no more, your Honour, than that pending this matter coming on before a Full Court - and we should say, your Honour, that this is a matter where the facts now are quite clear; it becomes purely a question of law, the question your Honour has enunciated with me, as I understand it.   And we would say that there is simply no reason why the transfer cannot proceed in the manner proposed, but transferred employees, pending determination of the court, have their rights protected.  And that is as matter of some substance.

Now, we say that the Commonwealth would be hard put to show, your Honour, how it is prejudiced by those terms and conditions as set out in exhibits 1 to 4 being maintained, pending a final hearing of the matter.

[12.48pm]

We say, your Honour, that the final hearing of this matter is one that could come on before the court at the earlier opportunity the court is able to offer us a date because the presentation of material is essentially complete by reference to the material before your Honour.

HIS HONOUR:   Well, it would be an appropriate case to be stated, actually.

MR MERKEL:   Yes, your Honour, and my understanding is there is simply no reason why the parties are in any difference on any of the underlying facts because, essentially, the Commonwealth are saying, "We are not obliged to comply", and your Honour has enunciated the question with far greater precision than I have been able to but we say that, essentially, is the only difference between us.

HIS HONOUR:   Yes.

MR MERKEL: Well, your Honour, I have a wealth of authority on the question - well, a wealth of authority on a number of questions, your Honour - but the case that seems most closely proximate to the situation we have before your Honour is the case considered by the court - that is the Colonial Sugar case - that, your Honour is Colonial Sugar Refining v the Attorney General 15 CLR at 183. The most proximate, your Honour, for the reason that there, unlike most cases where there was an interlocutory injunction over the validity of legislation, here because it is sought to enjoin a Royal Commission, it is sought also to enjoin by way of interlocutory injunction a commission for, in effect, exceeding the executive power of the Commonwealth which is analogous to the present case.

And there is a helpful discussion, your Honour, at page 192 to 3 by Griffith CJ.  There was a question of whether it was appropriate to grant relief and what his Honour said at the bottom of page 192:

But if it appears to the court that the hearing of the suit, a declaration will be made denying to government department or instrumentality ...(reads)... that he must wait and bring his action for damages after the disciplinary power has been exercised.

And then his Honour at the end of that paragraph says:

Section 31 makes short work of the technical objections.

And then his Honour sets out a number of instances which include, in effect, your Honour, unlawful executive power which his Honour was concerned with as well as invalid statutory power.  Barton J discusses the broad jurisdiction to grant injunctive relief at 205 and also at 210.5 and there was a statutory majority for the grant of interlocutory injunctive relief to restrain the Royal Commission from exercising executive power which a prima facie case had satisfied two of their Honours the commission did not have.

Your Honour, that is the closest we have been able to find.  There are cases in the United States' jurisprudence which are analogous where the courts have restrained the executive government from acting beyond power but that really comes back to the point how strong or how substantial the prima case or the serious issue is that we have persuaded your Honour about.  Your Honour, there is one matter I should indicate - I notice it is 10 to 1, I am not sure what your Honour was ‑ ‑ ‑ 

HIS HONOUR:   Well, we will sit Victorian hours here, Mr Merkel.

MR MERKEL:   Thank you, your Honour.  Your Honour, could I hand up a case of Hoffman-La Roche and indicate to your Honour the situation that we have before your Honour.  Your Honour, we have a situation where, of course, the union is here acting on behalf of its members who are the persons to whom, in the large part, the offer has been made.  In that sense, it operates in a representative capacity and your Honour, with other members of the court, recently considered the role of the union in this area in Shop Distributive and Allied Employees v The Minister for Industrial Affairs in South Australia and I will give your Honour the reference.  That is now reported at Volume 129 ALR at page 191.

HIS HONOUR:   But a concession was made in that case, was it not - thank you - by the solicitor?  That the union - he did not take the point that the union because of its corporate nature was in a different position to that of the individual members?  I think that is right.

MR MERKEL:   Yes, your Honour.  I am not sure how fully that concession appeared.  I may have missed that.  I notice your Honour is right.  At line 25 at 195, there is a reference to the basis conceded but we would say a case, like the present, in a sense, a fortiori, fits within the principles of standing discussed at 194 to 5 by the court.  Individually, in a sense, your Honour, it is fair to say that none of the ‑ ‑ ‑ 

HIS HONOUR:   The concession is on line 19 - starts on line 19 at page 194 and raising the question of standing the ministers and not relying on the fact the union is an association.  The submission is put on the basis that the union has the same interest as its members.  But no doubt that may be a point that is not taken by the Commonwealth.

MR MERKEL: No. Well, we wait to hear what my learned friend puts, your Honour, but, in essence, this is a classic case before your Honour where the - if I can, just for present purposes, assume that we satisfy your Honour to a requisite standard - whatever that may mean - that there is prima facie a case of infringement of the Constitution then we say that it goes almost without saying that no individual employee has any right other than his or her own interest - none have the resources or capacity to mount a challenge against the transfer as such combined.

They are members of the union whose function it is to, in effect, carry out the task that it now seeks and we would say that that should dispose of the standing issue but I draw your Honour's attention to it for a slightly different reason and that is this:  That the union is in the situation where whilst it is representing its members, it does not seek to do so in any proprietary or financial interest of its own; it seeks to have them uphold their right to have the law complied with.

And in this sense it is the reverse situation structurally to what was before the court in Hoffman-La Roche but the same principle, namely, your Honour, that where - sorry - if I can reverse it - in Hoffman-La Roche, your Honour, the Secretary of Trade was not required to give an undertaking as to damages.  The court regarding the application for injunctive relief for enforcement or compliance with the law standing in a category apart for the purpose of the principle of an undertaking as to damages on interlocutory relief.  And, in essence, where the injunction is sought for compliance with the law by the State against those the State alleged were not complying it, in effect, fell upon those not complying to persuade the court that it was appropriate to require an undertaking as to damages.

HIS HONOUR:   Yes.  But I might ask Mr Tracey, I would imagine he would not seek to take the point that the interest of the union is different from the interests of the individuals who are members of the union.  Do you take that point on standing, Mr Tracey?

MR TRACEY:   Not on the standing point, your Honour, but we might want to be heard on the question of undertakings.

HIS HONOUR:   Yes.  But on the question of standing, you do not take the point, do you?

MR TRACEY:   No, we do not take that point, your Honour.

HIS HONOUR:   So that seems to solve that.

MR TRACEY:   And, in any event, we note that some of the plaintiffs are members of the union.

HIS HONOUR:   Yes, that is right.  Well, we do not need to pursue that then, Mr Merkel?

MR MERKEL: No. There is the next problem, your Honour, that is consequential upon it and that is whether the principle of Hoffman-La Roche should apply where it is not the State that is bringing action to compel compliance with the law but it is an individual bringing an action against the State to require compliance with the law. But we would say no different principle should apply because they are absent, these plaintiffs, there is simply no one with an interest to compel the Commonwealth to comply with its obligations under the Constitution and it was to that effect, your Honour, namely, that your Honour should not require or compel an undertaking as to damages as a condition of granting the injunctive relief that I wanted to take your Honour to Hoffman-La Roche because we say those principles apply.

HIS HONOUR:   I see it is 1 o'clock.  In the meantime, without deciding that question as to an undertaking ‑ ‑ ‑ 

MR MERKEL:   It has taken a long time for me to define it, your Honour, but that is ‑ ‑ ‑ 

HIS HONOUR:   ‑ ‑ ‑ an undertaking as to damages, the undertaking of - on the part of the Commonwealth - was till 10.15 this morning, was it not?

MR MERKEL:   4.15, your Honour.

HIS HONOUR:   4.15.  Well, it is still in place.  Very well.  Well, we will resume sitting at 2.15.

MR MERKEL:   Thank you, your Honour.

LUNCHEON ADJOURNMENT  [1.00pm]

[2.15pm]

MR MERKEL:   Your Honour, I have probably jumped ahead of myself a bit.  I was going to go to Hoffman La Roche to indicate, your Honour, why this is a case where your Honour should not require the undertakings as to damages.  But it occurred to me over the adjournment I really ought to take your Honour just briefly to the material, because one of the critical factual matters your Honour has raised directly with me is the question of whether this constitutes a transfer and, your Honour, the matter becomes much clearer when one looks at the material that the Commonwealth is acting upon.  This is not just an individual offer, one by one, but it is in terms of the public acts of the Commonwealth a transfer and it has been so described by them.

Could I briefly take your Honour to the material before going back to the cases.  I should indicate I will make - I will be making short reference to the convention debates where it became fairly clear, your Honour, that we would say this is exactly the kind of circumstance which was sought to be protected by section 69 and 84.  Your Honour, the first affidavit is that of Mr Monagles, Monagles, I mispronounced it.  Your Honour saw that on Friday.  It is more to the Commonwealth documents accompanying it that I wanted to take your Honour to.  Does your Honour have exhibit 1, TJM1?

HIS HONOUR:   Yes.

MR MERKEL:   Because, in simple terms, if your Honour looks at the offer and acceptance, that is one thing, but if your Honour looks at the context in which it has arisen it is another.  And, your Honour, this all came out of the - a formal, intergovermental agreement, and your Honour will see in the second paragraph the letter goes on to advise that in New South Wales, Victoria, Queensland and South Australia, quarantine barrier programmes will be transferred to Commonwealth delivery.  Clearly the need to transfer large numbers of appropriately trained and qualified officers from State Commonwealth Service will require consultation with the unions and so forth.  But I go next, your Honour, to exhibit 2. 

Your Honour will see - and these are all the Commonwealth documentation I am taking your Honour to.  On 24 May transfer to proceed and your Honour will see that again there is a reference to the transfer process.  And then the document finishes, your Honour, AQIS which is the Commonwealth Quarantine Service, is looking forward to the transfer of State-based staff and welcomes those officers to Commonwealth employment.  Your Honour, exhibit 3 finishes with the same notion, transfer arrangements.  Your Honour will see exhibit 4 sets out the closing dates. 

I do not think I need to take your Honour - your Honour will see that it is a message to all the staff transferring to the Commonwealth.  And, your Honour, the word transfer is apt because it is not as if there is a discontinuity in service, it is effectively being conducted so that they are literally transferring from State to Commonwealth service, but in all other respects having continuity rights.  Your Honour, exhibit 5 says, just with respect to the offer to South Australian employees, and one can expect a similar form of offer to each of the other states, one has already gone out to Queensland, that with effect from 1 August in the second paragraph:

AQIS will take over responsibility for quarantine and export inspection activities from the South Australian Department of Primary Activities.

Then it sets out the terms of the terms of the individual offer, which I do not need to trouble your Honour with, and contains in attachment B, which is the second last page, the offer to be appointed to the Public Service or not to be appointed.  And we say that if there is a transfer the transfer itself effects the appointment, they do not have the right to make the offer in those terms.  Exhibit 6 is an offer to Queensland in similar terms, your Honour. 

Could I go next - I should say, your Honour, as I understand the Commonwealth material, it is much to the same effect.  But it is just interesting to note, your Honour, that under the Commonwealth Public Service Act - does your Honour have the Commonwealth material?  And the very last sheet is an exhibit of a ministerial certificate concerning the transfer, the Commonwealth affidavit, your Honour, is that of Brian McDonald.  And I should say that there is nothing in that affidavit that would suggest that this is not a transfer.  Your Honour will see at paragraph 12 of that affidavit, it says that:

The Commonwealth is making offers of employment to all State officers who are currently exercising -

- loosely described -

- the quarantine functions.

And a list is then set out of the numbers involved, your Honour will see in paragraph 14 that they are set off not against the Department of Quarantine, but the numbers are set off against the Department with a capital "D" of primary industry, which is irrelevant.  Then your Honour will see the whole process is a transfer by inter-governmental arrangement, that is the effect of the affidavit, and could I go to exhibit BN3, your Honour, which is the certificate under the Public Service Act, section 81B, which is in effect the Commonwealth link-up with the transfer which takes the service of all the persons under the State service, in respect of the Quarantine Services to perform those services as employees of the Public Service.

Could I go next back to the plaintiff's material, your Honour, the - I should go next - I was going to take your Honour to Judy Bourke's affidavit, can I go firstly to David Haynes's affidavit, your Honour.  He sets out as exhibits 1, 2, 3 and 4 in the second paragraph.  The offer documents of the Commonwealth, and your Honour will see - can I just take your Honour to exhibit 1, which is the Commonwealth proposal Terms and Conditions proposal staff transferring from the South Australian Department of Primary Industry to the Australian Quarantine and Inspection Service.  And I think it is accurate to say that each document is headed in the same way.  And these documents contain, your Honour, an accurate description of the South Australian employment condition as opposed to the Commonwealth, and I do not need to trouble your Honour with the detail of that. 

He then sets out, your Honour, the differences in respect of South Australia, Queensland, Victoria, New South Wales and the general differences.  Again I do not think I need to trouble your Honour with them.  They are significant.  The Commonwealth seek to argue, well, if you take the swings and roundabouts, people get some benefits and suffer some detriments, but the cases make it clear, your Honour, that the - it is the individual entitlements which are to be retained to the extent that there are improved benefits no one runs into any problems but you cannot go less than the individual accruing rights such as long service leave and so forth and the other terms and conditions.  And as I have indicated to your Honour there is simply no - does not seem to be any real issue but that the Commonwealth have not treated themselves as obliged to maintain existing rights and formulated their offers accordingly and that produces these consequences.

Your Honour, the deponent sets out the kind of harm that is said to be suffered by reason of an injunction not being granted, and we say that that is significant and irreparable harm with employees - in paragraph 9(a) - employees being required to make decisions on the basis of information that is inaccurate. It says they have no choice where in fact under the Constitution they have a right rather than a choice. Second, your Honour, is they are not being offered the conditions and being required to make a decision on transfer insofar as they may wish to continue on the correct factual basis which is that they are upon transfer members of the Federal Public Service but they can wish to leave if they seek to exercise that right.

An example is given in 9(c), your Honour, to the problem in South Australia, where people have not accepted the offer and may not have done so because of the adverse terms.  And we say that these problems are going to get - become more exacerbated rather than less with the passage of time.  And your Honour, I do not think I need trouble your Honour with a detail of any - the specific detail.  He - I think, your Honour, could I just take your Honour briefly to exhibits 5 and 6 of Mr Haynes's affidavit.  Your Honour, exhibit 5 is just by way of example, that sets out the chart I had mentioned to your Honour this morning of the structure of the quarantine service within the State as it presently is before transfer;  and exhibit 6, your Honour, is the same service provided by the Commonwealth after the structure.

I understand these are Commonwealth documents but no issue is joined on them and I do not want to take your Honour through laboriously but my understanding is, your Honour, that effectively you could pick up the State structure and just put it in the Commonwealth structure and there is no difference.  There may be a minor change here or there but effectively the whole body providing the Quarantine Service in the State then becomes as in exhibit 5 becomes the body providing the Quarantine Service for the Commonwealth, there is no longer a Quarantine Service Department section or function in the State after the transfer. 

Could I finally go, your Honour, to the affidavit of Judy Bourke which really seeks to set out the historical material and I will just - I will not spend long on it, your Honour, but we do say it is helpful.  What we have tried to do in the time available is to look at the year books in order to ascertain what the position was with Quarantine Services.  And, your Honour, the - I will just go briefly through what she says in her affidavit.  Your Honour will see the paragraph - does your Honour have her affidavit?

HIS HONOUR:   Yes, I do.

MR MERKEL:   Paragraph 4 refers to the Commonwealth Reports concerning the Quarantine Service and that is the service that will be now - was being carried out by State employees but will be carried out by those employees for the Commonwealth.  We have gone back in paragraph 5, your Honour, to the pre-Federation reports discussing Federal quarantine and your Honour a helpful overview of the situation is at paragraph 7 which is from the Commonwealth Year Book 1901-1909.

HIS HONOUR:   I have read the affidavit and the exhibits, Mr Merkel.

MR MERKEL:   Yes, your Honour, those - that material makes the point I made to your Honour earlier, namely that quarantine was always, as with many other of I think other groups in section 69, perform services carried out by the individuals within larger Departments, with a capital "D".  I will not trouble your Honour with that any further but the exhibits make good that point.  Lastly, your Honour, can I just hand up to your Honour some excerpts from the Convention debates on these sections.  Your Honour, can I go firstly at page 867 - sorry, it starts off at: 19 April 1897, your Honour. 

The concern at the convention stated by Sir George Turner at page 867, first column .9 at the end of that paragraph.  The clause then being considered related to the problem that if the servants were transferred over to the Federal body, surely it is only fair and right they would carry to the new body whatever rights they had in the old body.  Then, your Honour, at page 869, second column .5.  Sorry, I should say Mr Deakin at .3, second column:

Any statutory rights which exist should be continued as the change is only a change of master not a change of function.  And, Mr Deakin, it would save a great deal of -

- this is in the middle of the page -

- great deal of anxiety and risk on the part of the civil servants if their existing rights under the statutes for conserved to them under the Commonwealth, it would be a simple thing to do and no ones position would be injured or improved, nothing could be fairer.

It was very much the focus on the individual right.  Could I go next, your Honour, to 15 February 1898 at page 994.  Mr O'Connor in the second column at 994, your Honour, at the top of the page:

I would like to point out to Mr Gordon that if we wish to understand this clause we must go back to the object of it -

- and this is clause 84.

Its object is not to confer pensions but to set right the gross injustice which must accrue to the servants of the several states who join the Commonwealth which will take over their services and will thereby put an end to their services with the states.  No doubt in taking over those servants of the states it will be very much to the interests of the Commonwealth in most cases to continue their services because those servants knew the work of their respective departments and their knowledge and experience will be of inestimatable value to the Commonwealth in the early stages.

The point, your Honour will find through here, is this notion of ensuring the State servants who go and become employed by the Commonwealth in respect of the functions they were previously performing be protected.  And Mr Holder over at 8995, your Honour - sorry, Mr O'Connor again at 995 at .4:

I think that in dealing with these officers whose rights are taken away through no fault of their own, we can well afford to treat them not only fairly but generously, although there may be a case in which possibly does not come under the provision.

Nothing was thought of this possibility.  Mr Holder at .8:

I think this matter can be looked at from three points of view, there is first the point of view of the civil servants who may be taken over by the Commonwealth; secondly, there is the point of view of the State and thirdly, the point of view of the Commonwealth.

[2.35pm]

And then at the bottom of page 996, Mr Holden, at the bottom last four lines:

Concerning these officers taken over I see no injustice.  Why should an officer feel ...(reads)... taken over from another state?

Could I go next to - sorry, going backwards, your Honour, 21 April, 1897 at page 1046, Mr Isaacs at column 1, your Honour ‑ ‑ ‑ 

HIS HONOUR:   Thousand and?

MR MERKEL:   46.

HIS HONOUR:   Yes.

MR MERKEL:   Three quarters of the way down the first column:

I think it is highly important we should have some provision such as suggested by my honourable friend ...(reads)... preserve to them not only their existing but their accruing rights.

Then in response to Mr Reid - Mr Isaacs:

We have done a great deal more in this Constitution than merely adhere to essential principles and we ought to preserve to these men their rights.

Then after Mr Peacock, Mr Isaacs says:

I think we will be doing more harm than good if we ignore rights as States.  When we are entering into this bargain we must preserve honour and fairness towards our public servants as well as towards our other creditors.

Your Honour, I will not read it all but throughout the tenor of the debate your Honour will see the very notion that we are putting here that it horrified those creating these clauses that the Commonwealth could sidestep them by doing what your Honour has seen in the present case which is everything in the form of a transfer but without a proclamation.  In essence, your Honour, the only difference between doing this lawfully and unlawfully is simply that they have not made the proclamation and therefore relieved themselves from having to make offers on the existing terms and conditions;  that is really all they have done. 

So we would say ultimately, your Honour, if they are right it must be the ultimate triumph for form over substance given the kind of protections that were sought to be secured by section 69 and 84.  In that context, could I go now, your Honour, to Hoffman-La Roche.  This case, your Honour, concerned an action by the Secretary of State to restrain the appellants from charging prices in excess of those permitted under the Restrictive Practices Act in effect at the time.  It is authority for the proposition, your Honour, that when the State seeks injunctive relief in the courts in respect of its contractual proprietary rights, there is no reason why it should be treated differently on the undertake as to damages from any other litigant, particularly in view of the Crown Proceedings Legislation but when it comes to enforcing the law, it stands in a different category and can I just take your Honour to where their Lordships discuss that question.  341 is Lord Reid, paragraph (d).  His Lordship referred to the usual case.  His Lordship said:

This is in a different and novel field.  No doubt it will be thought that criminal penalties were inappropriate as a means of enforcing orders of this kind and the only method of enforcement is by injunction.

That is in effect allow them to breach, your Honour, and then say they should be penalised rather than enjoin them from breaching:

Dealing with alleged breaches of the law is a function of the Crown or of a department ...(reads)... should not be granted or should only be granted on terms.

Your Honour, Lord Morris discusses the public interest aspect at page 350, paragraph (b).  In the middle of that paragraph, his Lordship says:

It is in the public interest that the law should be obeyed.  It is in the public interest that resistance ...(reads)... injunction should not have been granted.

Then down at paragraph (g) there is a reference to Walton J which we would rely upon.  I will not read it to your Honour.  Then at the bottom of 351, his Lordship, at paragraph (h), after referring to Lord Justice Lindley in Attorney-General v Albany Hotel, his Lordship continues at the bottom of 351:

The above passages show that in case such as Attorney-General v Albany, the Court would be obliged ...(reads)... asked to enforce is a statutory instrument.

I should say, your Honour, the effect of the injunction would help the Crown revenues as well as enforce the law and that is why this issue came up:

What the Court is asked to enforce is a statutory instrument which each House of Parliament ...(reads)... the approach of the Court must be that the law is to be enforced.

Now, we say that we put that even more strongly in respect of what is intended to be provided as a procedure to be complied with under the Constitution. Then down at paragraph (f) ‑ ‑ ‑

HIS HONOUR: Well, that raises a problem of course. You say that you are merely seeking to enforce the rights which are given by the Constitution but in the proposed order which you handed up, you use the language of the Constitution for the purposes of the order which you seek. Of course, that is where the argument is, I have no doubt. I have no doubt that the defendants will say that they are not transferring or attempting to transfer the officers, they are merely making offers.

MR MERKEL:   Yes.

HIS HONOUR:   One does strike this difficulty of injunctions.  You really should put it in terms of what you want to seek to stop them from doing and what you seek to stop them doing is making offers.

MR MERKEL:   Yes, your Honour.

HIS HONOUR:   And then the contention is of course that you are not really attempting to enforce the law, you are going beyond the law.  That is the contention on the other side.

MR MERKEL: Yes. Your Honour, it is for that - we are conscious of the problem, your Honour, and it is for that reason that we said that in essence under the Constitution they are required to make a prior proclamation and comply with section 84. Now, that may well be the final relief that ultimately would be appropriate. We have set out an alternative form of relief, your Honour.

HIS HONOUR:   It still uses the words, "transfer or attempt to transfer".  That is where the contention lies.

MR MERKEL:   Yes, sorry.  Yes, your Honour.

HIS HONOUR:   That just leaves the argument because the other side will say, "We are not doing that", so that is all right.

MR MERKEL:   I think the drafting there - if your Honour is disposed - I will endeavour to tighten up that drafting, your Honour.  It really does mean, "from acting upon the offers".  It is in effect in terms of the present undertaking, your Honour, that "I will look at that and I will try and ‑ ‑ ‑ 

HIS HONOUR:   The point I am making now in relation to Hoffman's case, that being said, well then it is not just a case where you are attempting to enforce the law.  You are attempting to enforce a particular view of the law which may not turn out to be right.

MR MERKEL: Except, your Honour, I think the injunction granted was a negative one which would really be enforcing it by preventing a breach. As I understand it, that is what Hoffman was dealing with. The term "enforcing the law" was really whether the power to grant the restraining of conduct in breach of the law was synonymous with enforcing it. What we are seeking here, your Honour, is to do no more than restrain what we say is a breach of the Constitution. The real point in Hoffman, your Honour, is really that ‑ ‑ ‑

HIS HONOUR: But if you turn out to be wrong in the construction you attempt to place on the Constitution, why should you not be liable in damages?

MR MERKEL:   Your Honour, there lies the problem.  That must always be the case when one seeks an injunction in these terms against the State or someone - the State seeking it against an individual.  I think what we are really saying, your Honour, is ultimately it is a matter that we do not say is irrelevant to your Honour's discretion but what we say Hoffman-La Roche indicates is that it is incumbent upon the Commonwealth to satisfy your Honour that to grant the relief we seek without an undertaking is unjust.  It seems to go more to the question of balance of convenience rather than whether or not an injunction should be granted or refused.  I think that is really the point of Hoffman-La Roche.

Your Honour, can I just - I will not read the other passages, your Honour.  That is what Lord Morris says at the bottom of page 46 352-3, paragraph H(a), (b) and (c), and his Lordship made the point that the strength or weakness of the claim for breach is important in that regard.  Lord Diplock discusses it at paragraph (b) at 363 and makes the point at 364 at paragraphs (e) and particularly (f) and (g), your Honour, that where it comes to law enforcement, the undertakings not required as of course ‑ ‑ ‑ 

HIS HONOUR:   Yes, I think we looked at that passage already.

MR MERKEL:   Yes.  Then finally, your Honour, Lord Diplock at 367(b), (c) and (d) - his Lordship at (c) says in the last sentence at 367:

To displace this right or to fetter it by the imposition of conditions, it is for the defendant to show a strong prima facie case that the statutory instrument is ultra vires. 

Then finally Lord Cross, your Honour, at paragraphs (e) and (f) at page 371.

HIS HONOUR:   Yes.

MR MERKEL: Your Honour, Sir Nigel Bowen - this is the last passage I will take your Honour to - in Commercial Bank of Australia v Insurance Brokers, which is 16 ALR 161 169 referred to Hoffman-La Roche at line 8 to 10 at 169, discussed the injunctive relief under section 80, in effect suing for enforcement of a statute creating public rights and then in the last sentence at lines 18 to 20 at 169 said:

The Court should then take into account on the balance of convenience the presence ...(reads)... in exercising the discretion.

We say that is consistent with Hoffman-La Roche.  It becomes a matter of discretion, your Honour.

[2.50pm]

The last point, and I will only give your Honour references, there is a recent decision of the Court of Appeal in New Zealand, Simpson v Attorney-General (1994) 3 NZLR at 667, which discusses the notion of breaches of the Constitution, your Honour, and civil remedies. It is a helpful discussion, it goes to damages for a breach that has already occurred, but the important point, your Honour, is what is said by President Cook at page 677, lines 25 to 30, his Honour says at line 29:

That what we are concerned with here are public law remedies.

And, again, your Honour, the whole discussion of this case is about remedies for breach of Constitution rights. True it is it came up in damages for a breach that had already occurred. The police who had arrived at the premises with a search warrant were informed that they had made some terrible mistake, said that they thought that is likely but said, "We'd better search anyway," and that was regarded as a breach of the rights afforded under the Bill of Rights, but their Honours discussed and held I think 4/1 that that was the equivalent of breach of the Constitution right and the court should afford an appropriate public law remedy.

Now, your Honour, the point I make is that authority together with Hoffman-La Roche seems to indicate that this is classically a public law remedy subject to dealing with the question in the proposed orders, your Honour. I accept what your Honour says that we must not raise the question for trial in the form of the relief we seek, but in effect, your Honour, we are not trying to stop this transfer, nor in a sense is it a requirement at the interlocutory level that there be a proclamation. We say the law requires it and the Commonwealth should adhere to it, but they could have a proclamation which said that if it be a transfer then it is to be so proclaimed. But the real nub of the claim, your Honour, on behalf of the union is simply that this is a case where the Constitution has laid down a process.

Prima facie we say this is a strong case given the way in which this matter has proceeded for saying that the process has not been complied with by the Commonwealth.  There is a public interest of the highest kind that it comply with its Constitutional obligations unless the Court is satisfied that those obligations do not exist or apply.  It being raised as a challenge, it being a public law remedy, we would say the real question for your Honour is whether the relief that we seek should not be granted by reason of some injustice or equity consideration, and we say there is none.  We would say, your Honour, that this is a case where it is for the Commonwealth to persuade your Honour that an undertaking ought to be given.  We would say that the matter could be brought on for an early trial.  We say that in those circumstances ‑ ‑ ‑ 

HIS HONOUR:   Well, you have made these submissions, Mr Merkel.

MR MERKEL:   Yes, sorry.  In those circumstances, your Honour, the existing terms and conditions are the true status quo.  The last matter I would seek to mention, your Honour, is if your Honour were against us or in doubt about these matters, we have endeavoured to try and formulate what would be required of the Commonwealth to deal with one aspect of our claim which is that we may be taken to have waived rights if our members accept the offer, and we have taken the liberty of preparing a form of undertaking, your Honour, not that we can require it or that your Honour can require it, but at least it is before the Court.  It does show, your Honour, that just on the question of individual rights anything less than that undertaking could not be seen ‑ ‑ ‑ 

HIS HONOUR:   Does Mr Tracey have a copy of this?

MR MERKEL:   Yes, your Honour, I have given it to my learned friend.  We would say that that is one way of the Commonwealth ensuring that the employees could not suffer any harm by reason of the acceptance of their offers, but we would say that they are the submissions we would put, your Honour, and subject to seeking to deal with the drafting problem your Honour has raised with me we would seek proposed orders in one of the two alternative forms.

HIS HONOUR:   Thank you, Mr Merkel.  Mr Tracey.

MR TRACEY:   If your Honour pleases.  The threshold that our friends have to cross before they can obtain an injunction in these proceedings is a very difficult one.  The High Court's decision in the CSR case has been read to your Honour and the words of Griffith CJ which established the threshold in these terms.  If it appears to the court that at the hearing of a suit a declaration will be made denying the Government department or instrumentality the power which it seeks. 

More recently Sir Anthony Mason has made the threshold a little less difficult. In another union case the Administrative and Clerical Officers Association v The Commonwealth and the Minister for Industrial Relations, that is reported at (1979) 26 ALR 497. The passage is at 502 and I do not trouble your Honour with it. Your Honour will be well aware of it, it is the one which pitches the test as a probability of success at trial, given the absence of a change of facts in the interim.

Now, it is our submission that our friends have not approached, much less crossed that threshold. The Constitution gives the Commonwealth a choice as to the manner in which it will perform its Constitutional functions, and in the present context that could involve it performing - and it could always have involved it in doing so through its own employees or through agency arrangements, and its own employees could be directly employed or could be secured by the exercise of the power conferred by section 69. But in 1901, as indeed remains the case, there is no Constitutional proscription which would have prevented the Commonwealth, for example, placing advertisements for staff to operate its quarantine system. It could have done that in 1901. It was not obliged to go the route that was open to it under section 69. In the event it chose not to do so.

What it chose to do was enter into agency arrangements with the states whereby employees of the states would carry out some of the functions of quarantine inspection, not all, and do so as persons appointed under Commonwealth legislation, subject to Commonwealth direction and the standards they were enforcing were Commonwealth imposed standards.  That was an arrangement that suited the respective governments at the time it was entered into and for many years thereafter, these arrangements were renegotiated.  But in 1994 the Governments of the four states concerned in this proceeding and the Commonwealth came to a mutual agreement under which those arrangements were to be terminated and terminated as soon as could reasonably be arranged, and it is a consequence of that decision that the Commonwealth has chosen to offer employment to persons performing quarantine functions in the relevant departments of the various states.

Now, the Commonwealth is under no obligation to do that, the Commonwealth could have advertised in last Saturday's press for these employees and could have embarked upon a whole new regime with a whole fresh group of employees.  Now, it ought not to be charged with a breach of Constitutional requirements or seeking to avoid Constitutional requirements because it chooses to give first choice to those who are already performing these functions in the states, given that it is under no obligation to do that.  The position in South ‑ ‑ ‑ 

HIS HONOUR:   No doubt that was always the case, as you say, but what section 69 does is to offer a facility to the Commonwealth, that is to have the advantage of taking over a department in order to have the wherewithal to start conducting the affairs of the department forthwith, not only the personnel but the furniture and everything as well.  And what Mr Merkel says here, well, that is exactly what you are doing here, you are taking advantage of the transfer of these experts and therefore you must take on board the obligations as well.  That is the way it is put against you.

MR TRACEY:   Well, your Honour, for him to succeed on that what he has to establish is that the transfer, and I will accept that term for the moment, it is not one we accede to but ‑ ‑ ‑ 

HIS HONOUR:   Well, it is one you use.  Well, it is one you use in your correspondence.

MR TRACEY: We have used it only in respect of employees who choose to come into Commonwealth service. We have not used it in the sense in which it is used in the Constitution, namely, the transfer of a department, and we submit that the transfer of a group of individuals does not constitute the transfer of a department. The Constitution draws a distinction for these purposes between administrative units, and I am prepared to concede for the purposes of argument that a part of the department as opposed to a full department maybe comprehended by the word "department" in section 84, although we would point out that the small "d" is also used in the context of section 64 of the Constitution when referring to Commonwealth departments in a context which plainly require the whole department to be referred to.

But for the purposes of argument at the interlocutory stage we can concede that a sub-unit of a department is comprehended by section 84 as well as a full department, but even accepting that the transfer of individuals who are a member of that sub-unit is not the same thing as transferring the department, and that can be illustrated in many ways, but perhaps the easiest is by reference to section 85 which talks about the property used exclusively in connection with the functions of the department going with the department. 

Now, one does not associate the property with the individual so that we would be submitting that in section 84 when the Constitution speaks of the transfer of a department it is not talking about a collection of individuals, it is talking about an administrative unit and that therefore our friends argument cannot succeed and cannot bring what is an offer of individual employment contracts to a collection of individuals as being the transfer of a department, and that can be further reinforced in this way. Suppose they had all refused the offers; there is no compulsion involved and so the Commonwealth could well have been in the position of having to advertise. Certainly it would appear that in South Australia there is going to be a shortfall of about 10. There were 45 or 46 employees, 33 have accepted, 3 have refused and 8 have not replied. So that there is going to be a shortfall there and they are going to have to be made good. So that there is no forced change of employer in respect of these employees.

Those who have chosen to come to the Commonwealth have done so of their own free will and not as a consequence of the operation of a Constitutional provision that transfers their department and them with it into Commonwealth service, and your Honour will have noted that the Constitution refers to both concepts, the transfer of the department and the fact that the people who are in that department then become subject to Commonwealth control. Now, it is our submission that as a result of that it simply cannot seriously be contended that section 84 applies. It does not apply because it does not form part of an exclusive code, as our friends would have it because the Commonwealth has always had the other option. It is not a situation in which a department has been compulsorily transferred, even in the broad sense of that comprehending a sub-department and so that where our correspondence refers to transfers it is talking about, as I have already submitted to your Honour, the movement of individuals who accept voluntarily the offer of employment in the Commonwealth and no more, and certainly not what section 84 is dealing with when it speaks of a transfer.

[3.05pm]

Thirdly, section 84 does not apply because no employee has been put in a position of involuntarily becoming subject to the control of the Commonwealth or forced to accept lower wages and conditions upon such a transfer, and many passages have been read to your Honour from the convention debates.  Those passages make it clear that what the founding fathers were concerned about was that where State employees were transferred as a result of the exercise of Commonwealth power under section 69 that they should not be worse off when they move to the Commonwealth. 

They were not addressing themselves to the situation which could easily have arisen where the Commonwealth decided to staff some of its department, again by public advertisement, and some State public servants applied for those positions, even a sizeable group of them.  That was not the issue to which these debates on section 84 and 85 were directed.  Your Honour, as to the balance of convenience, they would briefly say this, and it emerges from the affidavit of Mr MacDonald.  Your Honour, the position is that these arrangements are well advanced and it is going to cause considerable disruption, both to the Commonwealth and the States concerned, if this process is stopped short. 

It will of course have an impact on the individuals concerned because they will be in a state of uncertainty as to what they can and cannot do.  The position that the Commonwealth seeks to achieve is that anybody, be they former State public servants or people recruited elsewhere in the workforce, will be subject to the same terms and conditions when they become employees of the Commonwealth.  Therefore, the alternative position for which our friends contend is not acceptable to the Commonwealth either because it would create considerable disparity for an indefinite period as between terms and conditions.  That of course has an effect on morale.  It also has an effect on the administration because there will be as many different sets of provisions as there are individuals.

HIS HONOUR:   What do you say as to the suggested form of undertaking that was proffered by Mr Merkel?

MR TRACEY:   The undertaking sought from us or from ‑ ‑ ‑ 

HIS HONOUR:   From you.

MR TRACEY:   Your Honour, I saw it for the first time when it was handed to me, and I would not want to say anything to your Honour about it without instructions.  But can I say this, your Honour ‑ ‑ ‑ 

HIS HONOUR:   It is fairly straightforward.

MR TRACEY:   Yes.  We would have thought that ‑ ‑ ‑ 

HIS HONOUR: You say there are no rights under the Constitution, that it is meaningless, but there you are.

MR TRACEY:   Well, yes, your Honour, we would say that if we raised, or sought to raise, the proposition that in some way these rights had been waived, if we were subsequently sued for damages for the shortfall in wages, that the court would very quickly say that that argument was not open to us.  So that in that sense the undertaking would not do us any harm but nor would it advantage our friends.

HIS HONOUR:   You say it would not, he says it would. 

MR TRACEY:   Well, your Honour, I am prepared to seek quick instructions about that.

HIS HONOUR:   Now you want to insert the words in the second last line:

... without constituting a waiver of or in any other way prejudicing such rights, if any.

MR TRACEY: Yes. Would your Honour pardon me just a minute? Your Honour, while those instructions are being obtained might I just quickly give your Honour a reference? It is probably not necessary given that your Honour has had a look at the authorities, but there is authority in this court for the proposition that damages are available for a breach of section 84, and may I give your Honour reference to one of them? Lucy v The Commonwealth (1923) 33 CLR 229. There are others, your Honour, but that one I would have thought is probably the best as being illustrative of the proposition. Your Honour, I have those instructions and I am able to offer the court ‑ ‑ ‑

HIS HONOUR:   I do not see how it could prejudice your position to give that undertaking.

MR TRACEY:   Not at all, your Honour.  We are no worse off, but I did want to make sure that those instructing me understood the tenor of it.  Your Honour, they are the submissions.

HIS HONOUR:   Thank you, Mr Tracey.   Mr Merkel.

MR MERKEL:   Your Honour, just dealing with ‑ ‑ ‑ 

MR TRACEY:   I am sorry, your Honour, in that haste I have overlooked one thing, and that is the question about the undertaking as to damages.  Your Honour, we are unaware of any authority that would support the proposition that our friends advance that this is an appropriate case in which those undertakings should not be obtained.  No doubt if they had found it we would have been the first to hear about it.  Your Honour, we have examined the texts and I have handed to your Honour a copy of Meagher Gummow and La Haine on Equity.  The relevant passages, your Honour, appear at page 572 in the middle of paragraph 2178, where the learned authors say:

There are very few exceptions to the requirement that an undertaking be given.  Normally it is the price a plaintiff has to pay for the grant of an interlocutory injunction.  The only exception which used to be quite clear is the case of an interlocutory injunction sought by the Attorney General.

There was then reference to Hoffman La Roche and the fact that in England, at least, that exception no longer applies, although there will be certain circumstances in which as we have seen the Crown, in a very narrow and confined area, will not be required to give an injunction, but otherwise it is bound, as are private parties.  And then the learned authors go on, about five lines from the bottom:

What the position is in Australia nobody yet knows, although it is now settled as regards the Commonwealth.  Other possible exceptions are when the plaintiff makes out an unarguable case of fraud which at the interlocutory stage must be rare and where a plaintiff's poverty prevents him from tendering a meaningful undertaking.

Now, they are the only exceptions that the learned authors have been able to detect in their researches, and they are certainly the only ones that we have been able to discover in the short time available.  But certainly, your Honour, there is no public interest exception of the kind that our friend supports.  I am reminded, your Honour, that there are some subsequent English authority that followed Hoffman La Roche that have very much confined it to its facts, but I do not think I need trouble your Honour with them because, of course, they are confined to the Crown and what our friend has to establish is that a private litigant is in some way in the same position as the Crown.  And in our submission there has been no material advanced nor authority for so establishing. 

So that it is our submission that if your Honour was disposed to grant any form of injunction in this proceeding that it would be subject to the usual undertaking, there being no basis for asserting that the plaintiff, at least the union plaintiff, is not in a position to give a meaningful undertaking.  Your Honour will pardon me one last minute.  Yes, they are the submissions, your Honour.

HIS HONOUR:   Yes, Mr Merkel.

MR MERKEL:   Your Honour, just dealing with that last matter about the authority concerning the undertaking as to damages being a discretionary matter.  Could I hand up to your Honour a copy of a discussion on that in Robert Sharpe's book on Injunctions and Specific performance, second edition, at - particularly at paragraph 2.500 and also a decision of the Court of Appeal in Allen v Jambo Holdings, which - paragraph 2.500 in Sharpe's book, your Honour. 

Your Honour will see that there are a number of authorities under the heading that there is a discretion in the court to relieve from an obligation given undertake in special circumstances, and then a number of cases are referred to, and at footnote 116, your Honour, authority for the proposition that we have put to your Honour, it appears to be that supported by Sir Nigel Bowen that the undertaking is one factor to be taken into account in the overall assessment of the application.  That is at .4 at that paragraph.

Your Honour, in the final analysis it is our submission that what really is the difference between the parties may be the strength or otherwise that your Honour may view the prima facie case.  It is our submission, your Honour, that the facts demonstrate the entirety of the transfer of the body and that makes a strong prima facie case and that brings us into the principles, we say, of Hoffman-La Roche, but your Honour the only other matter is the form of injunction.  Your Honour having raised the question of the transfer point in the current form of wording, I am currently having prepared an alternative form, your Honour, that would overcome that point which would have the effect of restraining the Commonwealth from acting upon the offers made unless the employment given by the Commonwealth is on the terms and conditions set out in exhibit's 1 to 4.

That is currently being typed out and being brought to court, your Honour, and if I could hand that up to your Honour's associate.  As far as the time is concerned I had discussions with my learned friend just prior to the luncheon adjournment and subject to me getting formal instructions, your Honour, I understand both parties are prepared to continue to undertakings given to your Honour last Friday until your Honour has been able to - or been able to hand down a decision on this application.

HIS HONOUR:   If I suggest the time of 10.15 next Friday for handing down a decision.

MR MERKEL:   Yes, your Honour.

HIS HONOUR:   Is that satisfactory?  And both the undertakings will be continued until then, is that right, Mr Tracey?

MR TRACEY:   Would your Honour pardon me just a minute?

MR MERKEL:   For my part, your Honour, can I - I need to get formal instructions.  I understood they were the effect of my instructions but I need to get formal instructions for that.

MR TRACEY:   Yes, we are in a position to give that undertaking until Friday morning.

HIS HONOUR:   Very well.

MR MERKEL:   Can we indicate to your Honour's associate shortly as soon as my solicitor comes back - she is presently getting the offer - sorry, the proposed form of order.

HIS HONOUR:   You want me to leave the bench for a moment, do you?

MR MERKEL:   If I could just have a few minutes.

HIS HONOUR:   Rather than sit here in silence looking at you.

MR MERKEL:   Yes, thank you, your Honour.

HIS HONOUR:   Yes, very well.

SHORT ADJOURNMENT  [3.15pm]

[3.25pm]

MR MERKEL:   Firstly, your Honour, we are instructed to give the cross  undertakings to damages and so that if the undertakings could continue until 4.15 on Friday or further order, your Honour, and could I hand up to your Honour ‑ ‑ ‑ 

HIS HONOUR:   I said 10.15, but 4.15 would be more convenient.

MR MERKEL:   Yes, sure.  No, sorry, 10.15 is not inconvenient for when your Honour will deal with it.

HIS HONOUR:   No, but 4.15 for the continuation of the undertaking.

MR MERKEL:   Yes, just in case there is a ‑ ‑ ‑ 

HIS HONOUR:   Thank you.

MR MERKEL:   This, I hope, overcomes the defect of the previous document and deals with the nub of what is sought, your Honour.  I have handed a copy to my learned friend and I think it is accurate to say that the statement is agreed to be accurate, namely that the conditions in those exhibits are those which the Commonwealth contends each transferring officer is entitled, so can I thank your Honour for the indulgence in the time shown.

HIS HONOUR:   We will adjourn the matter until 10.15 on Friday, the 30th.

MR MERKEL:   Thank you, your Honour.

AT 3.26 PM THE MATTER WAS ADJOURNED
UNTIL 10.15 AM ON FRIDAY, 30 JUNE 1995