Duncan v The State of New South Wales; NuCoal Resources Limited v State of New South Wales; Cascade Coal Pty Limited & Ors v The State of New South Wales

[2015] HCATrans 11

[2015] HCATrans 011

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S119 of 2014

B e t w e e n -

TRAVERS WILLIAM DUNCAN

Plaintiff

and

THE STATE OF NEW SOUTH WALES

Defendant

Office of the Registry
  Sydney  No S138 of 2014

B e t w e e n -

NUCOAL RESOURCES LIMITED

Plaintiff

and

STATE OF NEW SOUTH WALES

Defendant

Office of the Registry
  Sydney  No S206 of 2014

B e t w e e n -

CASCADE COAL PTY LIMITED (ACN 119 180 620)

First Plaintiff

MT PENNY COAL PTY LIMITED (ACN 139 010 209)

Second Plaintiff

GLENDON BROOK COAL PTY LIMITED (ACN 139 009 000)

Third Plaintiff

and

THE STATE OF NEW SOUTH WALES

Defendant

FRENCH CJ
HAYNE J
KIEFEL J
BELL J
GAGELER J
KEANE J
NETTLE J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 11 FEBRUARY 2015, AT 10.18 AM

(Continued from 10/2/15)

Copyright in the High Court of Australia

____________________

FRENCH CJ:   Yes, Mr Solicitor.

MR SEXTON: If the Court pleases. Your Honours, I had finished yesterday dealing with the first question that was posed by the Court. Can I say something very briefly about the second question, that is, whether Schedule 6A is a law for the purposes of section 5 of the Constitution Act (NSW). It is difficult, we would say, to argue that it is not a law for the purposes of that provision. In Bachrach, which I took the Court to yesterday - the Court at 564, paragraph 22, described the legislation in question as a legal regime affecting the land in question.  In Commonwealth v Grunseit (1943) 67 CLR 58 at 82 Chief Justice Latham referred to:

the content of a law as a rule of conduct or a declaration as to power, right or duty –

As it happens, we would say, the legislation here does embody a rule of conduct in relation to the administration of the Mining Act but it also declares rights, duties and powers.  By cancelling the licences in question it makes a declaration of rights and duties.  Mr Bell referred yesterday to the judgment of Justice Dawson in Kable at 76 to 77 where he expressed the view that the word “laws” is in a sense synonymous with statutes for the purposes of section 5. Justice McHugh appeared to agree with that judgment at 109.

We, of course, would be happy with that view expressed by Justice Dawson but it is not necessary in this case to determine that question, given the passages that I have just taken your Honours to from those other authorities.  Unless there is anything else, your Honours, I do not have anything to say on that question and I was going to ask Mr Free to deal with the third question, the copyright issue.

NETTLE J:   Mr Solicitor, could I just ask, what is the rule of conduct which the law prescribes?

MR SEXTON:   The rule of conduct here, your Honour, is the concerns with the administration of the Mining Act - in other words, what will be determined in relation to these licences that were granted under the legislation so it is the conduct of the granting of the licences.

NETTLE J:   What is the rule that it prescribes?

MR SEXTON:   The rule that it prescribes is that that conduct will be, in a sense, treated as void in this particular instance.

NETTLE J:   So it is the creation of the, what, of the impropriety involved in the issue of the licences?

MR SEXTON:   Well, it is not dependent on the question of impropriety.  It is that the licences are cancelled because of the process by which they were granted but ‑ ‑ ‑

NETTLE J:   So, is the rule that henceforth, to grant a licence by that process is what, unlawful?  Is that the rule which is created?

MR SEXTON:   In the sense that it is only in this instance, your Honour.

NETTLE J:   Yes, I see.  All right, thank you.

FRENCH CJ:   What things can you do under the licence that you cannot do in the absence of the licence, that is to say, the licence holder?

MR SEXTON:   I am sorry, your Honour?

FRENCH CJ:   What things can a licence holder do under a licence that a licence holder cannot do in the absence of – that the person could not do without the licence?

MR SEXTON:  These were exploration licences, I think, your Honour.

FRENCH CJ:   Yes.  So it gives an authority to do certain things that would otherwise be prohibited?

MR SEXTON:   That is right, yes.

FRENCH CJ:   What are they?

MR SEXTON:  To explore these particular – the nominated areas of land for minerals.

GAGELER J:   Mr Solicitor, does section 2(2) of the Australia Act bear on the meaning of the word “laws” in section 5 of the Constitution?

MR SEXTON: Your Honour said section 2(2) of the Australia Act?

GAGELER J:   Yes.

MR SEXTON: I referred to it yesterday, your Honour, in the context that it in effect gives a plenary power to the legislatures of the States, except for that reservation that it makes in relation to relations with countries outside Australia. To that extent, it suggests that laws in – for example, the reference to laws in section 5 of the Constitution Act (NSW) would extend broadly to the powers of the Parliament except in the case, for example, that

there are limitations by reason of the Commonwealth Constitution, and there is the manner and form limitations which are also referred to in the Australia Act itself.

GAGELER J:   So if the Parliament of the United Kingdom could have passed at the relevant time a bill of attainder which would have the effect of being a law, that bears on whether a similar bill of attainder could be enacted as law in New South Wales in your submission.

MR SEXTON:   Yes, your Honour.

GAGELER J:   Yes.

MR SEXTON:   It does not arise out of the questions that have been put by the Court, but on another version of the case one might get to that kind of issue as to whether a bill of pains and penalties, for example, was something that could be passed by a State Parliament.  We would say that it could be.  I will ask Mr Free to deal with the copyright issue.

FRENCH CJ:   Yes.  Yes, Mr Free.

MR FREE:   If it please the Court, I propose to begin by addressing some of the questions which arose yesterday afternoon about the general scheme of the Mining Act governing the provision and disclosure of reports. It feeds into the analysis of the special regime effectively created in Schedule 6A and it also assists in demonstrating that it is wrong in my submission to start with the premise that the plaintiffs seemed to wish to start with – that the reports generated by a licence holder during the life of an exploration licence are the exclusive property of that licence holder to be exploited solely for their benefit. In fact, as I will seek to demonstrate, the reports are required to be prepared and provided to the Minister subject to only limited confidentiality, and they may in fact be published under the general scheme of the Mining Act.  We have provided ‑ ‑ ‑

HAYNE J:   That is setting up a target rather larger than the plaintiffs seek to aim at.  The plaintiffs seek to say only – at least I think I am right in saying the plaintiffs seek to say only there is an inconsistency with the Copyright Act.  Now, why do we go off into a rather larger question about the nature of the rights which a mining tenement holder might have in exploration reports?

MR FREE:   Well, perhaps it is strictly unnecessary for the inconsistency argument, your Honour.  I was seeking to address some of the questions which were raised yesterday which arose in the context, I think, of Mr Bell’s submission that something extraordinary was being done in respect of these reports that is not ordinarily the case.  In that context, reference was made to section 163C of the Mining Act, which we have provided in that bundle to your Honours this morning. 

In particular, section 163C, just on the second page, your Honours, of the bundle we have handed up this morning - section 163C(1) creates the obligation to provide reports.  Subsection (2) provides that the regulations may make provisions for or with respect to certain matters:

(a)the content, form or lodgement of the reports –

Over the page:

(c)prohibiting or regulating the disclosure of reports required to be lodged or made under this section or a condition of an authorisation.

That empowerment of the making of regulations providing for the disclosure feeds into section 365 of the Mining Act which is on the next page of the bundle and to which reference was made yesterday concerning the disclosure of information.  Section 365(1)(b) provides that disclosure can be made:

in connection with the administration or execution of this Act –

So the regulations permitting disclosure feed into that authorisation, and I think your Honour Justice Bell yesterday asked Mr Bell a question about whether clause 11(6) of Schedule 6A is intended to fit into this regime. In our submission, it does. It, in the special regime of Schedule 6A, provides the authority to make this a disclosure within 365(1)(b).

The three regulations which have been made pursuant to that power we have given to the Court; regulations 57, 58 and 59.  Our only concern here is with final reports, and in clause 57(1)(e) your Honours will see that a “final report” is one of a number of reports required to be provided by an exploration licence holder.  Subclause (2) tells you when that report must be lodged, and 57(2)(e) over the page provides that:

in the case of a final report‑within 30 days of the expiry or cancellation of the authorisation.

Going over the page to clause 58, there is a limited statutory confidentiality obligation.  So in the case of certain reports in 58(1) they must “be kept confidential”.  One sees in subclause (2) that they are kept confidential only for so long as the authority is in force, or if the holder of the authority acquires an assessment lease or a mining lease, then the confidentiality continues for the period of that.  Going over to “Publication of reports” in 59:

The Minister may arrange for a report to be published . . . at any time after the period during which it is to be kept confidential expires.

Your Honours might see in clause 59(2) any such publication is to contain an acknowledgment of copyright.  I should say something briefly about final reports because they are not subject to a statutory confidentiality obligation.  In clause 58, instead that is an obligation imposed as a condition of the licence.  So in this case – I will just give your Honours the reference – condition 45 of the licence on page 190 of the Cascade special case book required that the final report also be kept confidential but only for so long as this licence holder held either the exploration licence or what is called a “flow‑on title”.  So as far as the general scheme, confidentiality is maintained only for so long as the person is the tenement holder.

Schedule 6A then establishes a special regime but in many ways mirrors that general regime. Coming then specifically to Schedule 6A and the inconsistency question, the plaintiff’s contention is that clause 11 of Schedule 6A as a whole is inconsistent with copyright and therefore invalid by force of section 109 and we say that is a significant overstatement of any inconsistency.

The State accepts that there is a potential for inconsistency arising from one aspect of the interrelationship between clause 11 of Schedule 6A and the Copyright Act.  That aspect is the requirement that the State may become subject to, to meet obligations under Part VII of the Copyright Act, principally the obligation to pay terms or equitable remuneration, as the case may be, in respect of the carrying out of acts in accordance with the statutory licence in section 183 of the Copyright Act.

Now, our first answer to that is that on a proper construction of clause 11 that inconsistency does not arise but, in the alternative, if on a proper construction of clause 11 there is an element of inconsistency because of a purported denial of any such obligation, then the extent of the inconsistency is very confined and the answers to the questions before the Court should reflect that.

Can I say as to that last step, the position as we put it in the written submissions, needs some refinement.  We cited in the written submissions in support of that argument section 31 of the Interpretation Act and associated principles of reading down.  On reflection, that misidentifies the source of the governing principle.  The ultimate consequence is the same but in the case of section 109 invalidity, section 109 itself provides the constitutional imperative to effectively read a State law down in the sense that 109 only suspends the State law to the extent of any inconsistency and not any further.  That is consistent with what this Court held in the Sportsbet Case and I will come to that when I come to that part of the submissions.

The first point I would seek to demonstrate is that, although there is an overlap between clause 11 of Schedule 6A and the Copyright Act, it is only partial. Clause 11(1) of Schedule 6A is the conferral of authority on appropriate officials to use or disclose information obtained in respect of the relevant licences and land for specified purposes.

The concept of information is broad and the State accepts that it is broad enough to include the doing of acts which would include acts comprised in the copyright, that is, there may be disclosure or use of information that would involve the doing of an act comprising the copyright but, importantly, and I think this was the subject of exchange between the Bench and Mr Bell yesterday, that is not the full extent of the operation of clause 11(1), it also authorises acts that would not involve any act comprised in the copyright either because information is used or disclosed without any reproduction or other act ‑ ‑ ‑

KEANE J:   Mr Free, is this not the problem with this aspect of the case, that there is no identification of – or no assertion by your side of a right to do something which the other side denies because it is incorporated in the copyright or because it involves an infringement of the copyright?  Is there not just an insufficiency of fact demonstrating a real dispute about the right to do particular things?

MR FREE:   It is certainly correct, your Honour, that there is no dispute that is crystallised in a precise form of that kind and there is a significant degree of abstraction to the way the inconsistency point has arisen.

KEANE J:   Well, considerable degree of abstraction, is it not an entirely abstract question that invites us to write an essay in general terms about the relationship of this provision of Schedule of 6A and the Copyright Act?  At the end of the day, what order would we make that permits or denies the doing of any particular action by the State of New South Wales?

MR FREE: To cut to the ultimate submission we would make about any answer that this Court would make to the question referred to it, if the Court was against us on the construction question and found that on its proper construction clause 11 did purport to exclude an obligation – to meet obligations under Part VII of the Copyright Act, then the answer to the question referred to the Court would be, in our submission ‑ and I am sorry, your Honours, I will just remind you of the question – the question which has been referred is, is clause 11 of Schedule 6A inconsistent with the Copyright Act and inoperative to the extent of that inconsistency?  We would say to ‑ ‑ ‑

KEANE J:   You are saying well, it may be, or it may be not, depending on the facts and there are not any facts.

MR FREE: Well, the only solution we would proffer to deal with that in terms of an answer which reflects the extent of the inconsistency would be to say that clause 11(4) is inconsistent with the Copyright Act and inoperative only insofar as it purports to exclude an obligation to comply with the requirements of Part VII of the Copyright Act.

KEANE J:   Why would that be an exercise of judicial power as opposed to simply writing an essay?

MR FREE: Well, it may not be, your Honour, but it is the solution we have arrived at. The other point to note is the way the plaintiffs have framed their proposition as to inconsistency; it is an attack on clause 11 as a whole, and as we understand it their proposition is that clause 11 as a whole, including the conferral of the authority to do these Acts, is wholly invalid because it is wholly inconsistent.

KEANE J:   That seems to depend on the notion that when one refers to disclosure of information one is necessarily saying breach copyright.  Now, if one does not accept that proposition one comes to your position which is it depends on the facts and there are not any facts.

MR FREE: I accept that, your Honour. The proposition about the breadth of information I do not think I need dwell any further on. There are then two separate questions. One is the authority conferred by clause 11 to do certain things, which is attacked. Our answer to that is that, putting to one side for the moment the obligation to make certain payments under the Copyright Act, there is nothing inconsistent about clause 11 conferring authority to disclose or use information, even to the extent it applies to Acts comprised in the Copyright Act, and that is because the Copyright Act itself in section 183 authorises in the sense that Acts – authorises the State to do such things in the sense that Acts in the services of the State do not constitute infringement. There is no suggestion from the plaintiffs that that which is authorised by clause 11 would be outside the scope of the licence in section 183.

Now, our friends would argue ‑ or do argue, as we understand it, that the Copyright Act is a complete and self‑sufficient scheme and the State cannot make a law of this kind which impacts upon that scheme. The difficulty with that proposition, in our submission, is that section 183 itself assumes that there will be State laws that create either duties or powers to use or disclose information that gives rise to the exercise of the statutory licence to do things for the services of the State. So in the Copyright Agency Limited Case, that was the effect of the Real Property Act. It created the obligations and powers to do various things with survey plans. That then, in effect, slotted into the Commonwealth scheme which equally permitted that to occur without any infringement of copyright. Here, clause 11 is of the same kind.

FRENCH CJ:   Well, then I suppose the question is, reading subclause (3) as a reference to copyright, why is it necessary to say no copyright “prevents the use or disclosure of information” et cetera?

MR FREE:   It may have been unnecessary, your Honour, but it is in fact an accurate statement.

FRENCH CJ:   Perhaps a bit provocative.

MR FREE: Indeed. That then brings us to the aspect of the Commonwealth scheme that obliges the State to pay. It depends upon whether a government copy is involved or not, whether one goes down the section 183A route or the 183(4) and (5) route.

HAYNE J:   But without having an identified set of facts yielding an issue about this, what are we to say ‑ New South Wales would have to abide by the provisions of?  Not a particularly useful statement by the Court, I would have thought.  It might reflect the absence of a matter in this respect.

MR FREE:   Perhaps, your Honour, and I would add the observation that that position, that is, that the State is required to comply with whatever obligations apply, is reflected in the letter which his Honour Justice Gageler referred to at the end of volume 2 of the casebook.  Before the proceedings were even commenced, the State had indicated in correspondence that it would meet such obligations as arise under the Copyright Act.

If the issue arises, then it can only be as to whether clause 11(4) purports to exclude any such obligation. We would say that the words “No liability” attaching in clause 11(4) should not be construed as including an obligation of the kind which arises under Part VII of the Copyright Act consequent upon an exercise of the State’s licence. 

We have provided to your Honours a copy of the Court’s decision in Ogden Industries v Lucas (1967) 116 CLR 537. At page 584, Justice Windeyer considered the meaning of the word “liability” and his Honour, at about point 3, notes that the word “liability” is:

“chameleon‑hued” –

A little further down, he quotes the proposition that –

“Liability” can be, and often is, used as a synonym for “duty” or “obligation”; but Sir George Paton, in his book Jurisprudence, 3rd ed. (1964), by Professor Derham p. 242, uses it in an opposed sense.  “Obligation”, he says, “should be sharply distinguished from liability.  Obligation relates to what a person ought to do because there is a duty laid upon him:  liability to what he must do because he has failed to do what he ought.”

A little further down, about point 7, Justice Windeyer suggests –

there are at least three main senses in which lawyers speak of a liability or liabilities.  The first, a legal obligation or duty:  the second the consequence of a breach of such an obligation or duty: the third a situation in which a duty or obligation can arise as a result of the occurrence of some act or event.

We would say that in the context of clause 11(4), liability is being used in the second of those senses as meaning in effect a statutory declaration that the doing of an act authorised by clause 11 is not a wrong giving rise to any remedy for which the State is liable. On that construction, in our submission, it would not speak to obligations under Part VII of the Copyright Act. 

If the Court did not accept that construction as to clause 11(4), then one gets to the proposition that there is an inconsistency to that extent, to pick up the language of section 109. The reference that I made earlier was to Sportsbet Pty Ltd v New South Wales (2012) 249 CLR 298 at 317, where the plurality judgment adopted a submission put by South Australia and the Commonwealth in that case, that where section 109 inconsistency is involved – excuse me, section 31 of the Interpretation Act is not engaged because there is not, in fact, an excess of power, which is what section 31 speaks to, but section 109 itself provides the measure of inoperability.  In the case of Wenn v Attorney‑General ‑ ‑ ‑

HAYNE J:   Forgive me, Mr Free, do I understand the State’s position to be that the clause does not have the effect contended for by the plaintiffs and further the State accepts that it could not have the effect contended for by the plaintiff?  What more need be said, Mr Free?

MR FREE:   Only by way of facilitating, to answer Justice Keane’s question, an answer to the question if the Court feels it is one ripe for answer.  I will just give your Honours the reference in Wenn (1949)

77 CLR 84 at 122 where his Honour Justice Dixon describes principles which are, in effect, equivalent to the reading down principles that your Honour Justice Gageler recently reviewed in the Tajjour judgment, that is, provided that there is an operation of the State law which is not “completely interdependent and inseparable” from the inconsistent part, then the balance of the State law should continue to operate. 

There is no suggestion here that if you confined the operation of clause 11 in the very specific way I suggested would arise that there would be any difficulty with the clause otherwise operating. Its effect would not be radically altered or, to use the language of his Honour, its effect is not in any way “interdependent” with or “inseparable” from that which is excluded by the effect of section 109.

GAGELER J:   Mr Free, Mr Bell has his discrete section 109 argument but he also relies on section 11 being a taking without compensation as part of his characterisation and what this Act does is imposing a punishment.  You would not rely on the section 109 reading down as an answer to the characterisation of the Act as punishment, would you?

MR FREE:   No, your Honour. As far as the characterisation goes, that is part of the reason I sought to address the existing regime to demonstrate that the result of clause 11 is equivalent to any other licence holder whose licence has expired, but to answer your Honour’s question, no, we would not rely on that for that purpose. May it please the Court.

FRENCH CJ:   Thank you, Mr Free.  Yes, Solicitor‑General for the Commonwealth.

MR GLEESON:   May it please the Court.  In relation to question 1, in addition to our written submissions and Mr Sexton’s submissions, the matters that I just wish to give emphasis to orally were, firstly, it being common ground that the nature of the power in question, namely, the cancellation of a right granted by statute is capable of exercise at legislative, executive or judicial level.  We are not in the category of a power which is exclusively judicial.

Secondly, to dwell for one moment on the fact that the power is being exercised by Parliament and inherent in that process will be the entitlement of each Member of Parliament to bring to the vote an almost unlimited range of considerations of the public interest as to whether to vote for or against the law, that is true in general and it is also true in this particular case as we see from clause 3 of Schedule 6A.

Now, that is an unconfined or almost unconfined discretion and we would submit inconsistent with judicial power.  For example, Mr Bell raises the question of sovereign risk and says that is something that the Parliament could properly take into account, as of course it could.  It could take into account proper governmental processes.  It could take into account unjust enrichment and the like.  So, all those considerations would be inconsistent with a judicial discretion.

Your Honours, the third matter is where the plaintiffs, we would submit, fail is that they still have not identified for the Court a controversy between identified persons over existing legal rights which Parliament has determined and that is the linchpin of the problem.  The Court has been really given two different characterisations yesterday of the so‑called controversy. 

The Duncan/Cascade position is that you should regard this statute as both creating and adjudging a breach of a new norm.  The new norm is said to be an ex post facto, ad hominem norm that the holders of these three licences and no one else shall not in the past have obtained those licences by serious corruption and then Parliament supposedly has adjudicated that those three holders breached the norm and then it has punished them.

By contrast, Mr Sofronoff prefers a characterisation that what the law has done is to adopt findings in the ICAC report.  It appears, he says, findings of dishonesty or vice by the directors.  So, the accused persons in his theory are the directors of the companies, referred to in ICAC, not the companies themselves, and punishment has been accorded to the wrongdoers and a broader category of people in response to that.

We would submit that the Court would reject both those characterisations of the law and regard this more simply as a case where, as Parliament tells us, it has firstly had regard to information from ICAC; it secondly, has made an evaluative assessment about past events and in particular the quality of, as your Honour Justice Kiefel pointed out in argument, the Minister’s decision and the processes leading to it.

It then, thirdly, has looked a wide range of public interest considerations and fourthly, concluded that it needs to reverse the grant of the licences and so viewed, there is no determination of a controversy between identified persons over existing legal rights.

Your Honours, there are just two provisions of the clause I wish to refer to and they are - clauses 7 and 8 of Schedule 6A are of some significance because apart from denying compensation under clause 7, clause 7(3) says that:

This clause does not exclude or limit any personal liability of a person for conduct occurring before the grant of a relevant licence -

whereas clause 8 immunises the State from liability, for instance, for the Minister’s action if that be wrongful at law.  Under subclause (5), the only employees or former employees of the State who obtain immunity are those who acted honestly and in good faith.  So one can see from that that the Parliament has left untouched, as it were, legal rights which may have arisen out of these past events and, for example, the companies may be able to pursue claims against their directors if those directors have behaved wrongly in the obtaining of the licence. 

In that sense, the companies - they have not been adjudged guilty of a crime themselves, they have been left with such rights as they may have under the general law against perhaps the directors or any officials of the State who may have behaved improperly.

Your Honours, the last matter we wanted to say in question 1 was that there appears to be a separate strand in both plaintiffs’ arguments that the Court can look at this law and see punishment written all over it and if you see punishment you should reason back to find there must have been an exercise of judicial power occurring. 

We would submit that there would be an error in simply looking for punishment and then not asking the anterior question, has there been, as there would need to be for judicial power, the adjudgment of criminal guilt against a standard and then the imposition of consequential punishment.  As we have pointed out in our NuCoal submissions, even if the impugned provisions censure and stigmatise through the removal of the statutory rights that would not be enough to make them judicial.

The final matter on the first question, your Honours, is just the aspect of the denial of compensation, for instance, in clause 7 of the schedule which the plaintiffs say there is punishment, have a look at that.  The reason for the denial of compensation is to give effect to certain purposes and objects. 

Your Honours would see in clause 3, particularly 3(1)(c) that Parliament, in effect, turned its mind to whether there was any means short of cancelling licences without compensation which would unwind the conduct which it considered as the basis for the law and found there was none.  So it made an assessment that there is not any means by which we can, through financial adjustments, produce an alternative outcome. 

Similarly, in clause 3(2)(c) Parliament determined that no person should derive benefit from a tainted process and, for that reason, no compensation should be payable.  So, I go to that to indicate that the denial of compensation does not bespeak punishment and, therefore, does not bespeak judicial power.

Your Honours, that was all on the first question.  On the second question, we would adopt what Mr Sexton said this morning.  In answer to your Honour Justice Nettle’s question, we would prefer – and this is paragraph 13 of the outline – not to speak of it as a rule of conduct, although it may be, but just to say it is in the other limb of the law, namely, it is a declaration about a power, right or duty, namely, that the privileges which previously existed under the licence cease to exist in law on terms and that would be enough to bring it within any version of what is a law.

As your Honour Justice Gageler raised in argument, if a law strays into the judicial area and if one has a true separation of powers or the like, the result is not that it is not a law.  The result is at Commonwealth level it is a law within Chapter I but invalid because of the Chapter III implications, so it would not deny its character as a law if the Commonwealth Parliament were to stray into matters judicial.

Finally, your Honours, on copyright, the issue which moved the Commonwealth to write something on this topic was the cover the field argument rather than the direct inconsistency argument.  Now, this morning’s questions have illustrated that the copyright issue in a sense is not right for determination and all we would wish to add to that by way of caution is that the cover the field argument which you did not hear about orally yesterday but there is quite a bit written about in writing, we would submit is a complete distraction in this case and it is based on a false understanding of whether copyright creates positive rights to use as opposed to negative rights, and the Court dealt with that in the JT International Case in the context of intellectual property generally.

But the reason the cover the field is a heresy and a distraction is that if that part of the plaintiffs’ argument were accepted, one would find a raft of laws at State level which might be said to be inconsistent under 109 because there are many laws which say things about the use of works which may happen to be copyright works.  If they contravene a direct rule in the Copyright Act, then they are inoperative, but the larger cover the field question we would reject. 

So your Honours know that the issue I am asking you not to be distracted by, it is found most clearly in the reply submissions in Cascade, paragraphs 9 to 11, and in particular the statement in paragraph 11 that:

On its proper construction, s 183(1) confers a positive right or authorisation to do acts –

and this generates a field.  That is what we ask the Court to reject.  May it please the Court.

FRENCH CJ:   Thank you, Mr Solicitor.  Solicitor‑General for South Australia.

MR HINTON:   If the Court pleases, on questions 1 and 2 we adopt the submissions of the defendants and the Commonwealth.  We have nothing to add to our written submissions.  If the Court pleases.

FRENCH CJ:   Thank you, Mr Solicitor.  Solicitor‑General for Victoria.

MR McLEISH:   If the Court pleases, we have nothing to add to our written submissions eithers.

FRENCH CJ:   Thank you.  Solicitor‑General for Western Australia.

MR DONALDSON:   Your Honours, in respect of oral submissions, we have dealt with the first question in our written submissions.  In our handout, your Honours, we were simply going to direct the Court to passages in Kable (No 1) which are entirely inconsistent with the propositions which have been advanced by the plaintiffs.  The reference to page 64 is in the judgment of Sir Gerard Brennan and then it is Justice Dawson and 109 – page 109 Justice McHugh agrees with both. 

Can I simply add this, your Honour, following on from my learned friend, Mr Gleeson?  Justice Gaudron at page 108 and Justice Gummow at page 144 in Kable determined that law was an invalid law but, nonetheless, attracted the characterisation of a law, and so all of their Honours could be understood to have dismissed the proposition which was advanced in that case.  If your Honours please.

FRENCH CJ:   Solicitor‑General for Queensland.

MR DUNNING:   May it please the Court.  We do not wish to expand on what we have said in writing and adopt the submissions of our learned friends for New South Wales and the other interveners.

FRENCH CJ:   Thank you.

MR DUNNING:   Thank you, your Honours.

FRENCH CJ:   Mr Sofronoff.

MR SOFRONOFF:   Your Honours, New South Wales submitted that section 3 of the Amending Act merely expresses Parliament’s doubts about the processes by which the licences were granted, and submitted later yesterday that it was not possible to say that any finding in relation to any individuals or organisations have been adopted by the Parliament – findings made by ICAC.

Your Honours, as to that proposition, could we say this.  Commissions of inquiry, whether under special statute like this one or royal commissions, are common and almost invariably the rules of evidence do not apply, the right of sole incrimination is abrogated to a degree, and the proceedings are conducted as informally as possible.  As a consequence of the nature of such an inquiry as an inquisition, conducted by a commissioner, those affected who might have leave to appear for reasons of procedural fairness do not have an automatic right to call witnesses or to call evidence or to put forward a positive case.  That was the position here.

The rules of procedural fairness are then accommodated to take into account the nature of such a proceeding.  It is not a lis inter partes, but an inquisition, and one can say that the trade‑off of the strict rules of procedural fairness observed by courts is regarded as worthy because of a search for the truth that is the purpose of such commissions.  The truth, of course, that is arrived at is a little bit fragile because of the nature of that process but, nevertheless, the findings are published.  One of the features of a report of such a commission that, in our submission, is a consequence of its nature, affording limited procedural fairness in the way I have described, is that the report has no legal consequences whatsoever.  It is merely an official publication – by official, I mean it is a published opinion of an emanation of government, whether an executive commission or an entity like ICAC which is independent.

That was the problem, of course, in Ainsworth v Criminal Justice Commission in which Mr Ainsworth complained that his reputation had been tarnished by findings and a report made when he had not been afforded fairness and the rest of it.  In the Full Court of Queensland, or it might have been the Court of Appeal, that was held to be a bar to a remedy, and in this Court it was concluded the reputation was something worthy of protection, particularly when it was impugned in an authoritative manner and hence a declaration was made, but the problem that was raised by Ainsworth was the problem that these commission’s reports have no legal effect.  So, an affected person whose character has been impugned in such a commission has to live with the effect on his or her reputation, knowing that at least there is a comfort that there is no legal consequence.

If there is to be a legal consequence, that will arise, and typically does arise, because of recommendations made that criminal proceedings be brought and criminal proceedings then are brought and they then result in a finding of guilt or a finding of guilt not proven, or administrative proceedings are brought to cancel a licence or to dismiss a person from a job.  Section 125 of the Mining Act of New South Wales provides for a procedure to cancel a licence.  One of the grounds, section 125(1)(b2) – that is, (b2) in brackets – is:

that the holder of the authority provided false or misleading information in or in connection with an application . . . for or with respect to the authority –

which would be one of the features here if the State sought to cancel a licence under that provision; no doubt that would be one of the grounds led.  But notice must be given of the proposed cancellation and an opportunity afforded to the affected party to be heard under the provisions in section 125.

HAYNE J:   Now, how do these submissions take account of the fact that commissions of inquiry, including particularly royal commissions, are commonly established to inform the Executive, to inform the Executive on specified matters, and quoting from Chief Justice Griffith in Clough v Leahy 2 CLR 161:

the main object of all the inquiries is to ascertain whether any alteration of the law, and, if so, what, is necessary in respect of the premises.

That is, does not your argument confine royal commissions – or in this case a special commission of inquiry – to the ascertainment of crime?

MR SOFRONOFF:   No, I do not want to be understood as suggesting any such thing.  I have submitted that some of the ordinary consequences – usual consequences of a commission of inquiry may be criminal proceedings, may be administrative proceedings, may be civil proceedings, may be action taken by the government to initiate legislation in Parliament.  But leaving aside Acts which flow from commissions of inquiry which are of general application about which nobody can complain, the Executive, or any member proposing a bill, can inform himself or herself anyway he or she likes in order to constitute a motivation for proposing a bill to be enacted into law.

The point that I wish to make by these submissions is this.  Leaving aside general laws that are passed by Parliament as the result of matters uncovered by commission, leaving that aside, persons who are directly affected by findings are not legally affected until in some form or another an opportunity has been afforded for legal effects to be implemented only after the findings have been tested, that is to say in a criminal trial or by administrative procedure which is then capable of being tested in the courts. 

At that point the findings, the result of the second stage, not the first stage, become binding and result in a legal consequence.  One could expect, your Honours might think, that the directors of NuCoal and Doyles Creek and those companies to the extent that we call them persons, would have awaited an opportunity in a criminal proceeding against the natural persons, or in proceedings to cancel the licences, in the case of Doyles Creek, to present their own evidence, to expect that the evidence that would be taken into account in any of the proceedings would be evidence that ought to be taken into account and that the position would be vindicated one way or the other.

One director did have his day in court.  Mr Andrew Poole, who had been a director at material times of NuCoal and Doyles Creek, did have his day in court because he made a claim on his directors’ and officers’ liability policy for his legal expenses to be covered in his appearance before ICAC and upon the refusal of the insurer to pay he sued and the matter came before Justice Stevenson.  I think your Honours have been given a copy of that decision and the reason that the insurer, Chubb Insurance, declined cover was on the basis of non‑disclosure of the matters constituting the corrupt practices and so on, found by ICAC and asserted by Parliament.

If your Honours would look at paragraphs 9 to 11, you will see the nature of the proceeding.  At paragraphs 62 and 65, you will see the nature of the case that Chubb sought to make based upon the findings - 65 and 66 - based upon the findings that were made against Mr Poole and others, namely, the misleading statements and also the matter relating to knowing that all of this was going to blow up in due course if they took the licence and not disclosing it to the insurer. 

So those were mirror images of what had happened in ICAC that constituted the findings affecting Mr Poole and that in the end, as on our case, we submit that Parliament then asserted in the legislation.  In 696, the case – I am sorry, your Honours, in 685, his Honour found that the submission that had been made in support of the application for the licence was, in fact, misleading but in 686 he was not persuaded that Mr Poole, who gave evidence in this case, was aware that it was misleading, so that non‑disclosure failed. 

Then, as to the second ground – 696 – there was a rejection of the finding against him there and as a consequence your Honours will see 729, 732 and 733 that when the matter came to be tested in a proceeding those findings were not made good.  Different parties, different evidence, but my point, your Honours, is that one expects in the normal course that before findings have any actual effect upon a person except reputational, there will be a day in court or before a tribunal supervised by the court.

KIEFEL J:   But this process, the process that you have pointed to tends to point out that that is not what has been undertaken by legislative means.

MR SOFRONOFF:   But what was then done as your Honours have seen from the second reading speech to which I want to take your Honours again briefly, please, in volume 2 of the special case book - what was sought to be done – if your Honours would go to page 656 – was to avoid the risk that those findings might not be true findings, in the sense that they are true enough found by the Commission, according to the procedures of the Commission, and we have to accept that those proceedings were valid in the Ainsworth sense.  But whether they were truthful findings that would justify legal consequences is something that the Parliament was not prepared to risk.  If your Honours look at the second paragraph on 656, third line, the recommendation to cancel followed upon:

earlier findings of corrupt conduct against various individuals, including the former Minister and a number of officers from the companies involved.  The Government is aware that some of those findings are now the subject of current or threatened legal challenge . . . the action proposed in this bill does not stand or fall based on the findings or recommendations of the Independent Commission Against Corruption.  Having regard to the information that has been exposed to public scrutiny, the Parliament itself can and should form its own view –

and then it does.  So what this Act is intended to do – openly, as we can see from the speech – is to ensure that the findings that ICAC had made would be taken by Parliament, whether adopted or under the rubric of making its own findings on some material and, based upon those findings, certain legal consequences would follow, including cancellation.

That was achieved not merely, in our submission, in order to roll back the position to the status quo ante because that could have been done by cancellation under the Act if the Government was prepared to make good the findings in the ordinary way expected in administrative proceedings.  The Act was passed in order to avoid an examination of the facts, and the Act was intended openly to effect deterrence.

KIEFEL J:   Putting aside the motives which you seem to be attributing, are you saying that the Act has a judicial character although as a judicial exercise it is incomplete?

MR SOFRONOFF:   Yes, and I will deal with the flawed character of the judicial exercise in a moment briefly, but what it does involve is Parliament asserting a state of facts in general terms – I will come back to that, but nevertheless asserting a state of facts as the justification for the statutory cancellation of the licences.  Secondly, the cancellation of the licences and the other consequences and the objects are to be achieved by this Act because mere rollback could be achieved by cancellation or, more simply, by refusing to renew the application for renewal that Doyles Creek had on foot at the time that the Act was passed for the grounds of improper conduct which are proper grounds under the statute.

Now, in our respectful submission, there is yet a further stigma attached to the cancellation, a cancellation based upon findings that NuCoal and Doyles Creek have not been permitted to test in an ordinary way, and that is the blot upon the character of Doyles Creek as an applicant for future licences.  I leave aside the directors because there is a complicated trail one has to weave through section 380A and I do not want to take the time to do that.  It is enough to point to Doyles Creek. 

Doyles Creek is now in the position of applying for a licence in the future with the status of a person who has criminal and compliance issues.  Now, that statutory expression is a composite expression with the pejorative implications that it carries and an ordinary person who has had a licence cancelled under administrative procedures one can say fairly carries that blot which can be disestablished -it is only a factor – fairly carries it because that cancellation was effected by proper administrative procedure in which matters were examined, by definition properly or as corrected by the Supreme Court.  Here it is carried as a matter of law because of the effect of the Act.

All of that of course satisfies the intention of the legislature that this Act also be a deterrent.  So, one has, as an essential justification for the Act, findings asserted in the second reading speech and in the language of section 3 and then a consequence which at the very least is capable of being regarded as a punishment.  We do not say every disqualification; every cancellation of a licence is of its nature a punishment.  It is capable of being.  So you have those two aspects.

Now, could I just footnote that by submitting that it does not matter that innocent people have been included.  In the second reading speech that question of innocence was addressed by the Minister as inconsequential and as your Honour Justice Hayne observed in Al‑Kateb (2004) 219 CLR 562 at paragraph 265,in determining that the character of an action as a judicial action, punishing people, it may not matter that innocents have also been punished along with the guilty.

So, in our respectful submission, we have the two characteristics of a legislative judgment, the findings of fact and the imposition of a consequence by way of a punishment and because the purpose of that imposition is, among other things, deterrence, your Honour Justice Kiefel has observed, with respect, rightly, that it does not read like a judgment and the Commonwealth has submitted we do not have here a lis inter partes, that the Parliament adjudicated upon.

What judges do is adjudicate upon conflicts inter partes and there was not one here but that is, of course, the very vice of a bill of attainder.  A prosecution is brought by an officer who chooses to bring it and initiates it on the part of the Executive with a view to it being determined as a conflict by a court.  The vice of an act of attainder is that it is brought at Parliament’s own motion against a person and the decision, the judgment and the punishment are enacted in the one action.  That is the vice. 

So it is no answer, in our submission, to point to the absence of some of the indicia of normal court process here and then to say, absent those criteria, this is not a judicial action.  It is the absence of those criteria which makes the action of Parliament malign.

HAYNE J:   You mention what I wrote in Al‑Kateb.  I am not sure that it is an entirely accurate summary that you gave of paragraph 265.

MR SOFRONOFF:   I am sorry, your Honour, I will ‑ ‑ ‑

HAYNE J:   Do not stay to go there, Mr Sofronoff.

MR SOFRONOFF:   No, I do not want to misstate what your Honour said but the point that we apprehended your Honour was making was that it may be that in a particular case punishment is imposed not only on the guilty but on some innocent people as well.

HAYNE J:   That is not to say it may not be appropriate to identify treatment of persons as punitive where those persons are not offenders, but punishment is not to be inflicted in exercise of judicial power except upon proof of commission of an offence.

MR SOFRONOFF:   Yes.  Could I also deal with the nature of the ‑ ‑ ‑

KEANE J:   Mr Sofronoff, the thing about an act of attainder is that the conviction and guilt becomes the law of the land, no court can hold otherwise. No one suggests, do they, that if any of the gentlemen referred to in the ICAC report are prosecuted that the prosecution can simply tender clause 3 of Schedule 6A to establish their guilt of anything. No one suggests that, do they?

MR SOFRONOFF:   No, nobody suggests that, but equally in the case of bills of attainder in the United States jurisprudence, an Act might satisfy the definition of a bill of attainder because it imposes a punishment for past acts done by a person.  It does not require any court then later to have regard to that statute as constituting a conviction.

KEANE J:   No, no, the only point I am making is that it does not seem to me to be very accurate to suggest that clause 3 has established – amounts to a declaration of a finding of guilt of any offences by anyone.

MR SOFRONOFF:   It constitutes, not ‑ ‑ ‑

KEANE J:   Because, if it did, then the prosecution charging any of these gentlemen with an offence would simply tender it.  No one suggests that.

MR SOFRONOFF:   I do not suggest that, your Honour.  It does not constitute a declaration of any person as guilty of an offence on the books but what it does by referring to a general class is it asserts the guilt of that class, and in particular the licence holders of guilt in conduct that it describes as serious corruption.  Now, one of the possible features of – I will call it an “act of attainder” without wishing to shackle ourselves to American jurisprudence or old pre‑19th century English law, one of the features of an objectionable act of attainder is that it may – it does impute guilt, not necessarily of a known previous offence but of an offence that is asserted by the statute itself.  That is how we characterise this one. 

BELL J:   Mr Sofronoff, you accept that cancellation of a licence would not always answer the description of punishment.

MR SOFRONOFF:   Yes.

BELL J:   How do you respond to the Commonwealth’s point that here the Act does not appear to preclude the licensee from bringing proceedings against a director or for that matter a State official who appears to have acted corruptly with the consequent loss to the licensee?  It is a submission that, on the face of it, tends to undercut the view that the licensee is being punished upon a basis of conclusion of guilt.

MR SOFRONOFF:   Your Honour, the reason why NuCoal, for example, might wish to sue somebody is because it in fact has suffered a detriment that we seek to characterise as a punishment, so ‑ ‑ ‑

BELL J:   It has suffered an economic loss.

MR SOFRONOFF:   Yes.

BELL J:   Sure.

MR SOFRONOFF:   By reason of the ‑ ‑ ‑

BELL J:   But it retains the capacity, so it would seem, to sheet responsibility for that loss to someone who it can prove in a court is responsible in the sense, if you like, of being guilty of misconduct otherwise described as serious corruption or something of that character.

MR SOFRONOFF:   Your Honour, I will assume there is a right to sue somebody for the purposes of the argument.  The right to sue – NuCoal’s right to sue somebody, or Doyles Creek’s right to sue somebody is not the equivalent of its licence.

BELL J:   I understand that, Mr Sofronoff, but it ‑ ‑ ‑

MR SOFRONOFF:   But that is – I am sorry, your Honour.

BELL J:   It is just not clear to me that you are answering the – what I took to be the nub of the point that the Commonwealth was making, which is that one does not see in the scheme of the Act any conclusion respecting guilt of the licensee, or punishment of the licence holder on the basis of a finding of guilt.  Yes, there is a consequence.  Yes, it has considerable financial consequences for NuCoal.

MR SOFRONOFF:   Your Honour, the link that we seek to identify in the preamble to clause 3 is the link that Parliament itself makes between involvement in corrupt conduct and the consequence for the licence holders who were involved in that process tainted by corruption, including their directors at the time.  The fact that as a consequence of the passing of this Act NuCoal may have a right to sue somebody does not bear ‑ in our submission does not bear upon the character of the Act. 

It may be – I would need to think this through – but it may be that if NuCoal had been prosecuted for some offence under the Corporations Act in respect of which in truth one of its directors was the human being who put it into that position of offending against the law, of course, NuCoal could not sue anyone for being convicted.  But if NuCoal has suffered loss as a consequence of the matters arising out of a conviction, it is conceivable it could sue somebody in respect of that loss.  It would not alter the nature of the conviction. 

So what we would stress is that the existence of a correlative right which arises because of what has happened by reason of this statute does not bear upon the nature of the statute as we would advocate.  I do not mean that it is an answer but is that responsive at least, or have I – I do not want to avoid the question is what I am saying.

BELL J:   I think you have answered the question, Mr Sofronoff.

FRENCH CJ:   Somebody once said you cannot put a knitting needle into a judge like a cake to see if they are done.

HAYNE J:   Though counsel would sometimes wish.

MR SOFRONOFF:   One of the problems here is that, assuming there was any action for misfeasance in office, the State is not liable because one of the consequences of the Act is that, so to that extent, those rights are eradicated as well as part of this process.  The other aspects, your Honours, that I wish to address is this, that it is true that we point to the language of section 3 and we submit that one can discern findings of guilt and an intention to punish in it and it is put against us, and some of your Honours have observed, that it does not expressly contain a finding of guilt or expressly contain a statement that consequential upon that finding there will be a punishment.

That, we submit, is one of the vices of Acts of Parliament constituting judgments of guilt and punishments, that they are not published in a way that one expects a court to publish by way of giving reasons which are rational and subject to review, by way of putting a party upon notice of what is charged, by way of a finding of guilt of that which has been charged and nothing else, and by way of the imposition of a punishment in respect of something that has been identified.

An Act like this one is, in our respectful submission, from the terms of the history of it, starting with the ICAC referral but in particular the second reading speech and the terms of the Act, only to be understood as an intention on the part of Parliament not only to cancel the licence which could have been done administratively, but to ensure that it is done in such a way that those who have been involved in it understand that they have been singled out for particular treatment and that the world, as in the case of a condign punishment by a court, understands that if anybody else does this, this will happen to them.  In our respectful submission, that is the character of this Act which identifies it as a legislative judgment.

GAGELER J:   Mr Sofronoff, precisely who is being found guilty and precisely who is being punished?

MR SOFRONOFF:   Well, the answer is Doyles Creek.  I do not have to go further than that.  There are others, in our submission, who have been found guilty, namely those whose conduct are the subject of the findings implicit in section 3 and referred to in the second reading speech who are the directors who are described in derogatory terms that were quoted yesterday. 

One can see that from the negative implication in the second reading speech in that passage of it where the Minister says it is said that some innocent people are going to be affected.  What do you mean by “innocent” when you use the word “innocent”?  So that language which then gives rise to the general terms of section 3 is the language that one uses when one wishes to include people in the consequences of misbehaviour.

Your Honours, could I turn then to the second of three matters that I wish to address in reply.  Your Honour Justice Gageler asked what was the best US case.  There have been, I think, only four US Supreme Court cases in which an Act has been struck down as an act of attainder, and the one that we would put forward is the United States v Brown (1965) 381 US 437. I took your Honours to it briefly yesterday and I will not take your Honours to it now.

Could I give you the page references?  The statute is set out at page 438 and it disqualified persons from holding certain offices who had been members of the Communist Party, who were or had been members of the Communist Party.  The passages we draw to your Honours’ attention which contain statements of principle relating to acts which would offend against the United States prohibition are at 447 to 449, 456 to 457, 458 and 461, in the reasons of the majority, Justice White dissenting.

The final matter, your Honours, relates to section 2(2) of the Australia Act. We deal with that in paragraph 38 of our submissions in‑chief, I will not take your Honours to it, and in footnote 54, and point out that Professor Twomey dealt with the purpose of section 2(2) of the Australia Act in her book on The Australia Acts and the references in the footnote and, as I recollect her treatment of it, it was to ensure that in respect of the extraterritorial power of State legislatures there should be no doubt that they do have extraterritorial power.  That does not preclude, of course, an interpretation of that provision by this Court in a way that involves a greater effect from that section, but that was the original primary purpose.

New South Wales has submitted that the effect of section 2(2) is that it confers what it calls “plenary power” upon the New South Wales Parliament. It depends what you mean by “plenary”. Certainly, as at – and that is the constitutional argument which we are not raising today. If it matters, if New South Wales had conferred upon its Parliament in 1986 whatever powers, legislative powers the UK Parliament had in 1986, it did not have power to pass an act of attainder for the reasons pointed out by Lord Bingham in Rule of Law at page 46, namely, that by then that country had become party to the European community and would have been precluded from passing such an Act by reason of the treaty. 

The reference, your Honour, is in footnote 62 of our submissions in‑chief. But, of course, in Australia whatever the effect of section 2(2) might be in terms of attaching the legislative powers of the UK Parliament, we would submit, firstly, that they are the legislative powers not the judicial powers of the UK Parliament and, secondly, and in any event, whatever those powers might have been in the UK, here they would be constrained by the Constitution which is a subject for another occasion. Those are our submissions, your Honours.

FRENCH CJ:   Thank you, Mr Sofronoff.  Mr Bell.

MR BELL:   If it please the Court.  I just have seven fairly short points I would like to make by way of reply.  The first relates to one of Mr Sexton’s opening submissions about clause 3 where he embraced a thought, I think, articulated early in argument by your Honour the Chief Justice yesterday.  What Mr Sexton said was about clause 3, that:

it expresses, in a sense, a doubt about the process by which the licences were granted –

He sort of embraced that as a way of reading clause 3.  In our submission, that reading is just not available.  It is not a logical reading because if that is what the Parliament had – namely, a doubt about the processes – not a definite view, but just a doubt about the processes, it is quite inconceivable that the clear and multiple consequences that the Act imposes that Parliament would rationally have imposed those consequences on the basis of simply a doubt. 

So, in our submission, the submission in the first place is not supported by the language, but it is also not supported by logic.  If you have a doubt about something, you do not go about cancelling a property right worth many millions of dollars.  You work through the doubt either by having some further inquiry or hearing to reach the requisite state of satisfaction which would be commensurate and rationally related to the imposition of clear consequences. 

KEANE J:   What about if you have a disquiet – a disquiet, rather than doubt, and disquiet that is so grave that the only way to ensure public confidence in the process of granting these tenements is to scrub the grant and start again.

MR BELL:   Your Honour, with respect, I would not accept that there is any relevant distinction between a doubt and what your Honour describes ‑ ‑ ‑

KEANE J:   Grave disquiet.

MR BELL:   ‑ ‑ ‑as disquiet or grave disquiet.  There is, to be sure – one can contemplate a spectrum of doubt but, with respect, I do not – I would still make the same submission ‑ ‑ ‑

KEANE J: Why should not the process of granting these tenements be like Caesar’s wife? 

MR BELL:   Well, they are recognised to be property rights.  They are some of the most valuable property rights and economic rights in this country.  I am not just talking about these but mining tenements generally.  They are – certainly in recent times – the platform of the whole country’s economy.  These mining rights granted around the country under the State mining legislation are not something just to be given ‑ ‑ ‑

HAYNE J:   So what are you going to say against Justice Keane’s proposition?  You have said what I think can be said in favour of Justice Keane’s proposition.  What is the answer to it, Mr Bell?

MR BELL:   That parliaments do not just take away very valuable property rights because they are in the gift to start with and if the parliament changes its mind that is satisfactory, rather, there is – as is recognised in the Mining Act and all other acts what was the rule before Schedule 6A came in is if there was to be a cancellation of such…..rights, there would be an administrative hearing subject to a jurisdictional supervision by the Supreme Court with all the safeguards that that entails.

The other answer to your Honour’s question about serious disquiet, in our submission, as a matter of construction of those opening words of clause 3 – and, lest there be any ambiguity – recourse to the second reading speech, Parliament was not acting on doubt or grave disquiet.  Parliament was acting on its satisfaction that there was a tainting, that something had occurred, not that something might have occurred – but there was a satisfaction that something had occurred by reason of something else.  The “by reason of something else”, which is to use the language of the judiciary, the intermediate fact found was serious corruption.

So we submit that as a matter of language that construction your Honour put to me is not right and my first submission though was, as a matter of logic, you would not expect rationally to see such clear and absolute consequences being imposed by Parliament on the basis of something that could be described simply as a doubt.

The second point I wish to make is to respond to a submission both by Mr Sexton and by Mr Gleeson about the absence of a controversy between identified persons, i.e. the absence of a lis.  Now, Mr Sofronoff in part has answered this by pointing out correctly that in every bill of pains case, there is no pre‑existing dispute.  There is no hearing at which the target of the impugned legislation is represented and heard, et cetera.  That is the very vice but, in other words, it must follow logically, in our submission, that the absence of a lis or a dispute between identified persons cannot be an answer to the question as to whether or not what was happening here was either punishment or the exercise of judicial power.

Could I add to that response, and this is cited in our written submissions in Duncan at paragraph 41 - it is a reference to Sir Frank Kitto, again in Tasmanian Breweries (1970) 123 CLR 361 at 374, where his Honour said power may be:

“held to be judicial though no adjudication in a lis inter partes is involved”.

That is in our written submissions.  That would also, with respect, seem to be an answer.

BELL J:   Mr Bell, on your analysis, who has been adjudged guilty and punished?

MR BELL:   The licensees, the three licensees.  That is the answer to your Honour’s question and also Justice Gageler’s question.  That is our case.  That has always been our case.  We have never made the submission that other people are being punished.  There are obviously detrimental effects for the shareholders, those companies, et cetera, reputational impacts, but just because there may be other people affected does not or should not distract from the question of punishment of the identified parties.

One of the clearer – in the bill of pains jurisprudence, quite often – and again the references are in our written submissions – the targets of the legislation are disguised.  One of the decisions uses the language of disguised description.  But ultimately they can be identified and the courts have reached a conclusion that these were the targets who have been punished.  Here we have a very clear specification.  The only rights - the only people whose rights are affected directly by this legislation are the three licensees.

GAGELER J:   Mr Bell, another real difference between this legislation and a bill of attainder is a bill of attainder involves an attainder, an attainder of blood.  The object of a bill of attainder traditionally lost all rights.

MR BELL:   …..

GAGELER J:   Well, more than that.  Their heirs did not get any of their property.  There was no ability to sue and be sued.  Now, that is just not this case.  What has been lost is ‑ ‑ ‑

MR BELL:   Well, two points.  One is pains or penalties is perhaps a less severe species, bill of attainder being the most severe.  But your Honour speaks about what is lost.  You have the immediate property rights which are lost.  You have the pending applications lost.  You have a right – any ability to sue the State gone.  You have the 380A consequence which I accept is not as final as the other consequences, but it is in a sense presumptively there.

Using the language of criminal conduct – I have always accepted in the submissions, I think I did say yesterday that, in a sense, the fact that we might not be able to find a perfect facsimile of this case in another case is not by any means fatal.  We are seeking to tease out of the legislation or read the legislation and examine the substantive as opposed to simply the formal effect.  So formally, no one is said to be punished, but reading it as a matter of substance your Honours know what we say.  We say there are three people who are punished by reference to the finding in clause 3.  They are the – not the sole, but they are the two critical matters which suggest – we ask the Court to accept ‑ ‑ ‑

HAYNE J:   Does that submission point to an unstated premise for your argument which, if articulated, would run something along these lines, that the taking of a valuable right or privilege, once granted, is necessarily a form of punishment and can never be justified otherwise than as punishment by pointing to the need to have proper public administration of the grant of valuable rights and licences.

MR BELL:   No, we do not make that.  That is not necessary for the premise of our argument.  We accept and I hope I have made this point, perhaps I did not make it sufficiently clear by reference to the BLF Case, there can be a loss of rights.  There was a deregistration in that case.  In other cases one could lose a mining licence because, for example, say there was a licence to mine uranium, government policy could change.  That is not a loss by way of punishment.  That is a loss by reason of a change of governmental policy.  Or assume another case, a new government with a different set of environmental policies. 

Now, the loss of those rights, we could not make a case, come up and say well, that is necessarily punishment, et cetera.  That is why I sort of addressed the BLF Case which is put against us and distinguished it in the three ways I did which are on the transcript.  What we say is that the cancellation, one of a number of – not the sole and we do not want to fall into that trap, but one of a number of consequences has the character of punishment in this case and that is informed powerfully by the fact that the premise, what leads to the imposition of those consequences is a finding of the existence of serious corruption which, we say, joining the dots, is a finding in respect of the licensees and critical, and this takes me on to the next point I wish to make.

HAYNE J:   Well, before you come to that, does the characterisation as punishment deny that the Act is to be justified as desirable or necessary for the maintenance of proper public administration?

MR BELL:   Your Honour, an Act may, of course, have – and this is the reason we went to that passage of Justice McHugh in Woolley – an Act may have purely protective purposes, but this Act does not have – we say in some respects to have that as part of its focus but it also has the character of a penal Act. 

If I might, just to finalise what I was answering your Honour Justice Hayne and Justice Bell, one of the most striking things about my learned friend Mr Sexton’s submission was this.  When he was going through my seven points, he said in relation to deterrence this.  He said:

There is a reference to “deterrence” in clause 3, but it is far from clear who is to be deterred, certainly by the cancellation of the licences, given of course that no findings of fact were made against the licence holders.

Now, that is quite an astounding submission.  We have a clearly stated purpose in clause 3(1)(b) and the Solicitor‑General says it is not clear who is being deterred.  He has to make that because he wants to make the submission that there are no findings being made.  Now, it is a large problem, it is a large gap, in the logic and the cogency of his argument that he cannot reconcile that legislative purpose with his first submission that there are no findings of fact.

Of course, there is absolutely no difficulty giving meaning and effectuating that legislative purpose of deterring future corruption if the Court were to accept our construction because it works very clearly.  People in the future who may engage in serious corruption will have consequences imposed upon them that this Act has imposed upon people – licensees – who the Parliament has found to have engaged in serious corruption.  In other words, the consequences which we are visiting to the licensees in this case are the consequences that will be imposed on any future tenement holder who is found to have engaged in serious corruption. 

It works.  It makes sense and we say it is a huge forensic hole in New South Wales’ case.  It cannot – and we put the challenge there in writing, I put the challenge there orally and there was no response.  One can also go from that statement by Mr Sexton – although it is not clear who is being deterred – there be any doubt one can go through – back to the second reading speech here and in the same paragraph which is in Cascade, volume 2, page 1003, in the same paragraph where the deterrence is referred to – that is the second‑last paragraph of the speech – the Premier had said:

It is the risk of corrupt public officials and their private sector mates –

So the private sector mates, i.e., who in company form got the licences -

that will distort public processes, manipulate markets and will act for their own private benefit in secret deals at the expense of the public interest.  This bill puts an end to that.

It goes on to refer to clause 3, including deterrence.  So you can legitimately get to, on the Solicitor‑General’s concession about it is not being clear who is being deterred, you can get to the second reading speech by reference to that concession, at least by reference to that concession, and when you get there and when you also bear in mind what the Premier said about, well, there is “innocence and innocence” in the first paragraph of that – we say this is plainly all about a judgment of guilt. 

Can I make this submission then, that if New South Wales’ submissions be correct that the Act contains no finding that any of the licensees engaged in or were guilty of serious corruption and given that it is also common ground that the ICAC report relevantly made no finding to that effect, then what we have is an Act taking away extremely valuable property rights without compensation from, ex hypothesi, innocent companies because of the serious corruption of some unidentified others.

That, in our submission, is a most unlikely reading of the Act, a most unlikely conclusion that that is what is happening in this legislation, that, ex hypothesi, non‑guilty people who are subject of no findings either by Parliament or by ICAC are having these consequences and without any compensation.  The other vice, of course, as I have put, is that it leaves completely unexplained how deterrence works. 

GAGELER J:   Mr Bell, can I just try this?

MR BELL:   Yes.

GAGELER J:   What about a deterrence that is just along these lines, that those who might engage in serious corruption in the process of granting licences in the future will be deterred from doing so by knowing that the processes of that kind in the past that have been engaged in have been unwound?  They resulted in nothing in the end.  There is nothing in it for them.

MR BELL:   But on the view put that there is no consequence or sanction against the Minister or the Obeids or those people who the ICAC report said were responsible for the relevant corruption in the grant here.  There is no deterrence of those people.  On the New South Wales’ contention these consequences are being visited on innocent people, people who are not party, ex hypothesi, to any corrupt or serious corruption and so what message does it send to them.

BELL J:   The message that it sends is that in bestowing on an applicant for a very valuable right respecting the minerals owned by the State, the State will apply standards of probity of exemplary character and if it is shown that those standards have been tainted, albeit one cannot establish by a particular individual, nonetheless the benefit of that licence will be lost and the valuable resource will be the subject of the grant of a licence only following a process that is above reproach.  It would serve, perhaps, that value.

MR BELL:   It becomes, with respect, to respond to your Honour’s question, a somewhat confusing process though, the message being sent on our friend’s construction ‑ ‑ ‑

BELL J:   Minds might differ about that.

MR BELL:   ‑ ‑ ‑ is that innocent – people who have nothing to do with these matters will lose their rights in New South Wales.  I mean ‑ ‑ ‑

HAYNE J:   That is the private rights and interests must, in your submission, and always will, in your submission, trump the need for the proper public administration of the grant of valuable public rights.  That is the proposition that you are advancing, Mr Bell.

MR BELL:   If it is being done by way of punishment which takes us back to the argument that this is what is happening.

FRENCH CJ:   This is all in aid of your construction against the argument put by New South Wales that there is no lease, that there is a finding of some kind of guilt.  Analogous to that you would get in a bill of pains and penalties.

MR BELL:   You can link the finding to the individuals.

FRENCH CJ:   Now, that was point number 2, I think.

MR BELL:   Well, your Honour, I have gone through – I am very close to the end.  Your Honour Justice Bell raised Mr Gleeson’s point about clause 7(3) and the ability preserved to sue at common law.  That is at best, in our respectful submission, a neutral point.  Clause 7(3) is expressed generally, but it is neutral – if that right, i.e., a right of the applicants to bring any claims against anyone had also been taken away by this legislation we would have pointed to that as an additional element of punishment.  The fact that it has been preserved, but it is not in terms a preservation of the applicant’s rights, it is an entirely general clause, the fact that it is there, in our submission, does not detract from the other aspects of the Act which we submit are penal or punitive. 

Now, I think the final submission I wanted to make was this.  The Solicitor‑General for New South Wales’ response to some of the seven points I made was to say it is not punishment, it is just adverse consequences.  Now, could we just make this submission?  It is correct that you can have adverse consequences without punishment, but it is probably not correct that you can have punishment without adverse consequences.  So saying these are adverse consequences does not actually engage with whether the adverse consequences are penal or punitive in nature. 

In a sense, it is an acknowledgement – the acknowledgement that these are adverse consequences, that the Act does impose a necessary constituent element of punishment, but it does not go on to – and New South Wales therefore does not really engage simply by saying adverse consequences they do not really answer why they are not punishment, but that was how that proposition was attempted to be answered verbally.  Nothing further, your Honour.

FRENCH CJ:   Thank you, Mr Bell.  The Court will consider the arguments thus far put.  The Court adjourns until 10 o’clock tomorrow morning.

AT 12.06 PM THE MATTER WAS ADJOURNED