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 9

[2015] HCATrans 009

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 TUESDAY, 10 FEBRUARY 2015, AT 10.15 AM

Copyright in the High Court of Australia

____________________

MR A.S. BELL, SC:   If the Court pleases, I appear with my learned friend, MR B.K. LIM, in the Duncan proceedings and the Cascade Coal proceedings.  (instructed by Yeldham Price O’Brien Lusk Lawyers)

MR W. SOFRONOFF, QC:   May it please the Court, I appear with my learned friend, MR G.J.D. DEL VILLAR, for NuCoal Resources Limited.  (instructed by Quinn Emanuel Urquhart & Sullivan)

MR M.G. SEXTON, SC, Solicitor‑General for the State of New South Wales:   If the Court pleases, I appear with my learned friends, MR S.J. FREE and MS Z.C. HEGER, for the defendant in each matter.  (instructed by Crown Solicitor (NSW))

MR J.T. GLEESON, SC, Solicitor‑General of the Commonwealth of Australia:   May it please the Court, I appear with MR J.S. STELLIOS for the Attorney‑General of the Commonwealth intervening in the three matters.  (instructed by Australian Government Solicitor)

MR M.G. HINTON, QC, Solicitor‑General for the State of South Australia:   If the Court pleases, I appear with my learned friend, MS L.K. BYERS, on the instructions of the Attorney‑General for South Australia intervening in each matter.  (instructed by Crown Solicitor (SA))

MR S.G.E. McLEISH, SC, Solicitor‑General for the State of Victoria:   If the Court pleases, I appear with my learned friend, MS K.L. WALKER, SC, for the Attorney‑General for Victoria intervening in each matter.  (instructed by Victorian Government Solicitor)

MR G.R. DONALDSON, SC, Solicitor‑General for the State of Western Australia:   May it please the Court, I appear with my learned friend, MR D.E. LEIGH, for the Attorney‑General of Western Australia intervening in each matter.  (instructed by State Solicitor (WA))

MR P.J. DUNNING, QC, Solicitor‑General for the State of Queensland:   May it please the Court, I appear with my learned friends, MR J.A. KAPELERIS and MR W.E. WILD, for the Attorney‑General of the State of Queensland intervening in each matter.  (instructed by Crown Law (Qld))

FRENCH CJ:   Yes, Mr Sofronoff.

MR SOFRONOFF:   Do your Honours have the plaintiff’s oral outline of submissions?  Having regard to the letter from the Court which we received today, I propose to address the matters referred to in paragraph 1 and paragraph 5.  Is that how the Court wanted it done?  Thank you, your Honours.  My learned friend, Mr Bell, will deal with the second and third issues referred to in the Court’s letter.

FRENCH CJ:   Thank you.

MR SOFRONOFF:   Your Honours, it is necessary for me to take the Court to – however briefly – some of the background of fact referred to in the special case book and then I will take your Honours to the ICAC Act because its provisions bear upon what followed.  Then I will take your Honours to the Amending Act, as we have called it, and take your Honours through those provisions without commenting upon them at length at that point and then I will make some submissions about the nature of punishment and then come back to the Act and deal with it comprehensively, if that is convenient.

Could I ask your Honours then to go to the special case book volume 1 and at page 63 your Honours will see the exploration licence that was granted to Doyles Creek Mining Pty Limited and the conditions relevantly are contained on page 84.  For present purposes, what is important is that some work had to be done, as is usual in the case of such licences in all of the States, and the Minister is to have some access and some rights in relation to them. 

Then, after the grant of that licence, as your Honours will see from page 50 of the special case itself, a company called Trident Capital approached a company called Taurus – unrelated to Doyles Creek – with a view to its investing in that company and that happened.  The purpose of the meeting was -paragraph 8 - to propose that Taurus invested in Doyles Creek and that happened. 

Paragraphs 9 and 10 describe how, before committing, Taurus procured a respectable firm of solicitors to make investigations.  That was done and no concerns were revealed.  Paragraphs 12 and 13 then had the result that a large section of the shares of Doyles Creek were purchased by interests on behalf of Taurus.

Part of that transaction, which occurred later, was that in due course a company which was then called Supersorb but which changed its name to NuCoal Resources Pty Ltd became party to an option agreement under which all of the shares in Doyles Creek would be purchased from the then shareholders of Doyles Creek by NuCoal Resources and then NuCoal Resources would be floated on the Australian Stock Exchange.

For that reason and because of the requirements of the Corporations Act, accountants were engaged to prepare an “Investigating Accountants Report” for the prospectus - paragraph 15, solicitors were engaged to prepare a “Solicitor’s Report” - paragraph 16 and those reports were in due course prepared and included in the prospectus and they showed no reasons for concern in relation to the investment that was being offered to members of the public and to institutions in NuCoal whose sole substantial asset was, of course, its shareholding in Doyles Creek, the licensee.

Outsiders bought shares on the float in 2010, 50 million shares were bought.  By then only one of the original directors was on the board of NuCoal and Doyles Creek and that was one Mr Andrew Poole - that is paragraphs 21 and 4 of the special case and in due course NuCoal Resources came to have 3,000 individual shareholders, including natural persons and companies.  It followed then that after that capital raising and, no doubt, other fundraisings - paragraph 27 of the special case - Doyles Creek, at the behest of its holding company, spent substantial sums of money to explore the area, the subject of the exploration licence, and data was collected.

Could I take your Honours at that point in time to the ICAC Act, the Independent Commission Against Corruption Act 1988? Section 4 of that Act establishes the Commission and sections 7, 8 and 9 then define “corrupt conduct”. I will come back to that in a moment. Section 13 provides that one of the principal functions of the Commission – 13(1)(b) – is:

to investigate any matter referred to the Commission by both Houses –

Otherwise the first function referred to is to investigate allegations or complaints relating to corrupt conduct as defined in the Act.  If we go back to section 8, “corrupt conduct” relevantly for the purposes of this case is constituted – section 8(1)(a):

any conduct of any person . . . that adversely affects . . . the honest or impartial exercise of official functions . . . 

(b)any conduct of a public official that constitutes or involves the dishonest or partial exercise of any of his or her official functions –

Section 8(2):

Corrupt conduct is also any conduct of any person . . . which could involve any of the following matters -

Relevantly, your Honours will see a series of offences referred to.  Your Honours will see section 8(1) defines “corrupt conduct” to be certain conduct involving dishonesty and so on.  Subsection (2) uses the word “could” – “could involve any of the following matters” which obviously constitute offences.  But that then is further qualified by section 9 because that section provides in subsection (1) that:

conduct does not amount to corrupt conduct unless –

relevantly –

it could constitute or involve:

(a)a criminal offence –

Again, the conditional “could”.  “Criminal offence” is defined widely in subsection (3).

HAYNE J:   Or could constitute other things.

MR SOFRONOFF:   Yes, your Honour, but I am concentrating on criminal conduct at the moment because what was found by the Commission was involvement by former directors in actual offences.  But as your Honour, with respect, correctly observes, it can also constitute other things, falling short of criminal conduct.  If your Honours would then go to section 13, 13(2) provides that:

The Commission is to conduct its investigations with a view to determining:

(a)whether any corrupt conduct . . . has occurred . . . 

(2A)Subsection (2)(a) does not require the Commission to make a finding . . . that corrupt conduct . . . is occurring –

But then subsection (3A) –

The Commission may make a finding that a person has engaged or is engaging in corrupt conduct . . . only if satisfied that a person has engaged in or is engaging in conduct that constitutes or involves an offence -

So the Commission’s attention is directed to whether corrupt conduct has been committed and it can only conclude that it has been if it makes a finding that conduct relevantly involving an offence has taken place.

HAYNE J:   Well, what do the words “or thing of the kind described in that paragraph” mean in subparagraph (3A)?

MR SOFRONOFF:   Your Honour, it means, in our submission, the conduct described in 9(1)(a), (b), (c) or (d).  I emphasise criminal offence because that is what the Commission was concerned with here but it also encompasses disciplinary offences governing public servants, the potential for conduct which would justify dismissal of a public official -and in the case of Ministers it cannot be dismissed in that fashion - and who are guilty of conduct short of a criminal offence, conduct that offends an applicable code of conduct – all of those things. 

I do not mean to ignore the width of the definition by concentrating on criminal offences but, as your Honours will see in the terms of the report of the Commission, that is what the Commission itself concentrated upon and that is why I concentrate upon it.  If your Honours then go, please, to section 17(1) and (2) – the Commission’s proceedings are ones which do not require it to apply the rules of evidence and it is to approach its tasks:

with as little formality and technicality as is possible –

There is, however - sections 21 and following – power to compel the provision of both information and evidence – sections 21, 22 and 23.  There is a limited abrogation of the right against self‑incrimination in section 26 in the way that one commonly sees in such statutes.  Section 34 provides a limited right to appear and to examine and cross‑examine, limited by leave being granted by the Commission.  Then, if your Honours would go to section 73, your Honours had seen in section 8 that one of the functions of the Commission – I am sorry, in section 13(1)(b) – that one of the functions of the Commission is:

to investigate any matter referred . . . by . . . Parliament –

Section 73(1) authorises:

Both Houses of Parliament may, by resolution of each House, refer –

such a matter to the Commission, and then it becomes:

the duty of the Commission to fully investigate –

that matter.  Sections 74 and 74A authorise the provisions of reports – the preparation and provision of reports by the Commission after it has conducted its investigative functions and could I ask your Honours now to look at 74B which bears upon the case.  Section 74B(1) precludes the Commission, including in a report, a finding that a “person is guilty of or has committed” a criminal offence or one of the other species of conduct referred to in section 9.  Subsection (2) provides that:

A finding . . . that a person has engaged . . . 

(a)in corrupt conduct . . . 

is not a finding or opinion that the person is guilty –

of an offence.  That is to say, although section 13(3A) permits the Commission to:

make a finding that a person has engaged . . . in corrupt conduct –

only if it is prepared to make a finding, that is to say it is satisfied -

that a person has engaged in . . . conduct that constitutes or involves an offence or thing of the kind described –

in paragraph (9), nevertheless the report must not state that the person is guilty of an offence and, to the extent that the Commission makes a finding and reports the finding that a person has engaged in corrupt conduct which implies the conduct constituting an offence, that is not a finding that the person is guilty.

In our submission, the apparent dichotomy between section 13(3A) and section 74B is this.  While it is a necessary step, in the course of the Commission performing its function of investigating, and if it is appropriate to do so to make a finding that corrupt conduct has been engaged in, as a matter of form the report must not state that the person is guilty of an offence.

That is not such a strange position for the legislature to adopt because - at least in Queensland - while a coroner is obliged, among other things, to determine how a person died, which may include that the person died by succumbing to an intentional killing, no part of a coroner’s function involves the finding of criminal guilt which is, of course, reserved to the courts.

So notwithstanding a finding as a matter of fact that in a particular case a person has committed an offence or engaged in another conduct of the kind defined, a finding reached on the balance of probabilities, the publication of the report is not itself to be taken as an imputation that the person is guilty of the criminal offence as a matter of law.

HAYNE J:   Section 74B(2) prevents any argument of preclusion.

MR SOFRONOFF:   I am sorry, your Honour.

HAYNE J:   It prevents any argument of preclusion.

MR SOFRONOFF:   What does your Honour mean by ‑ ‑ ‑

HAYNE J:   Estoppel.

MR SOFRONOFF:   Yes, yes, it does, that is right.  If your Honours would go to special case book volume 2, please, at page 352, in the Legislative Assembly of New South Wales on 11 November 2011, a resolution was proposed in the terms that your Honours can see at the top of that page which would, if passed, constitute a referral under the Act to the Commission, and your Honours will see at page 356 that that motion was carried.  The same resolution was passed in the Legislative Council, page 357, and as a consequence the Commission commenced an inquiry into the circumstances surrounding the grant of the licence that I identified to your Honours. 

If your Honours would go, please, to volume 2 at page 359, you will see the first of two reports issued in this matter by the Commission, and your Honours will see from pages 376 and 377 that the Commission identified the issues which it would investigate and I can summarise those matters for your Honours by telling your Honours that they constituted questions 1 and 2 referred by the two Houses of Parliament.

The second report appears at page 538 and your Honours will see on the right‑hand side just above the subtitle “Operation Jasper” that this report concerned questions 3, 4 and 5.  If your Honours would go to the first report, please, after dealing with the conduct of various officers of Doyles Creek - if your Honours would go to page 478 you will see at the foot of the left‑hand column there is a finding that certain statements made - and these were made in support of the application for the exploration licence - were misleading.  In the right‑hand column after the bullet points, the Commission finds that each of the directors knew these statements were misleading.  At page 481, in the left‑hand column, third paragraph:

The Commission concludes that each of the directors was aware that false or misleading statements were being made ‑

about certain matters.  At the beginning of the next paragraph, it finds that those statements were “material”.  There are other such findings made but then at page 497 the Commission addressed the task of making the actual findings and it made certain findings in relation to Mr Macdonald, who was then the Minister.  Your Honours will see the finding at the top of the right‑hand column and, having made that finding, the Commission went on to consider whether any offence had been committed. 

If your Honours would go to 498, in the paragraph just after the italics, the Commission expressed its satisfaction for the purposes of section 9(1)(a) of the ICAC Act in the terms expressed there and, in the second paragraph:

Accordingly the Commission is satisfied that the jurisdictional requirements of s 13(3A) of the ICAC Act are satisfied.

The Commission then went on to deal with the position of Messrs Maitland, Ransley, Poole and Chester and, if your Honours would go to page 501, in the left‑hand column the second, third and fourth paragraphs and the two paragraphs at the top of the right‑hand column contain the findings of corrupt conduct for the purposes of the Act and relate it to offences. 

FRENCH CJ:   This is all going to a proposition, is it, that these findings were, in effect, adopted by the Parliament?

MR SOFRONOFF:   The Parliament, in our submission, made its own findings, having regard to what is contained there.  ICAC - the Commission made findings required of it, that is, findings it was entitled to make for the purposes of the statute published in terms required by the statute.  The Parliament then went on to do something of its own and satisfied itself.  Your Honours will see – and you need not pause to analyse at this stage – findings made at pages 502 to 503 in relation to the four people named there, and there are further findings at page 505.

Having written and delivered that report concerning its findings, the next question concerned recommendations.  If your Honours go to page 539, this is the report that concerned questions (3), (4) and (5) requested of Parliament and it is here that the recommendation was made that the licences be cancelled.  The Commission had engaged two barristers to provide an opinion, which I can tell your Honours appears annexed to this report and it begins at 558.  I do not intend to take your Honours to the detail of that.  It is summarised in this report.

Having considered that report, at the foot of page 540, the Commission expressed the view that the granting of the authorities, relevantly for Doyles Creek, was so tainted by corruption that those authorities should be expunged or cancelled and any pending applications regarding them should be refused.  In fact, by that stage Doyles Creek had made an application for a renewal of its licence which was then pending and which would, in the ordinary course, have been dealt with under the statute in the usual way by an administrator. 

At the top of the right‑hand column on page 540, the Commission said that it recommended that the government considered enacting legislation to expunge those authorities.  That could be accompanied by a power to compensate.  In the second paragraph:

Such legislation would have the benefit of reducing risks arising from challenges in the courts to any ministerial decision to cancel or not renew -

Then if your Honours would go to page 550, there is some consideration of the position of NuCoal at 550, left‑hand column.  The considerations in favour of expunging the licence, notwithstanding the position of NuCoal as a company that will suffer and which is in respect of its shareholders certainly largely distinct from those who did the conduct identified as corrupt conduct, are set out there. 

Then if your Honours look at page 551 in the bottom right‑hand corner, the Commission gave consideration to whether it would be adequate for the government to proceed under existing Mining Act legislation and the Commission identified the provisions of the Act under which cancellation can be made.  At the top of page 552 in the second paragraph, the Commission observed that:

The furnishing of information in relation to an application under the Mining Act –

in the way that it was done in this case, as the Commission found -

is an offence . . . 

The second ground of cancellation –

third paragraph -

requires the decision‑maker to reasonably conclude that false or misleading information has been provided.

Then at page 553, the Commission considered the extent to which the Minister in deciding whether to cancel licence under the existing statute could take into account the findings of the Commission and there is a quotation of part of the opinion of counsel at the foot of the left‑hand column on 553, where counsel observed that the Commission’s findings are a matter of opinion by the Commissioner ‑ do not have any other binding status.

Over the page at 554, in the second paragraph, having regard to what it identified as difficulties with expunging or cancelling the authorities, the Commission turned its attention again to special legislation to expunge and in the last sentence of the second paragraph:

One advantage of such legislation is that it would significantly reduce the risks associated with any administrative law challenge to ministerial decisions -

In the paragraph after the next one, there is an observation about the potential constitutional issues arising.  Then could I take your Honours to some of the correspondence that passed between NuCoal and the government which your Honours will see beginning at page 587 of volume 2.

HAYNE J:   What are we looking for in this correspondence?

MR SOFRONOFF:   What your Honours are looking for is the course of events which show that NuCoal’s position was not considered by Parliament before the Act was enacted.  Now, if it is a legislative judgment, then part of our argument, as your Honours will have apprehended from our outline, is that, well, if it is a legislative judgment, then there are certain requirements before such judgments are made and one of them is to hear the party affected.

HAYNE J:   If it is a legislative judgment ‑ ‑ ‑

MR SOFRONOFF:   Sorry, your Honour?

HAYNE J:   Not if it is an exercise of judicial power, but if it is a legislative judgment, you have to hear the parties.

MR SOFRONOFF:   That is our submission, your Honour, because what we understand the interveners to be submitting, and the defendant to be submitting, is that the Parliament of New South Wales can exercise judicial power and if it has done so in this case, by Act, then it is valid and the question arises, if this is a judicial Act, whether there are constraints upon its validity by reference to the ordinary requirements of the exercise of judicial power.

FRENCH CJ:   But the prior question we are asking you to address is whether it is a judicial Act.

MR SOFRONOFF:   Yes, I understand that, your Honour.

HAYNE J:   So why again – tell me why again we need to go through this correspondence?  How does it relate to this issue of whether this is an exercise of judicial power?

MR SOFRONOFF:   Strictly it does not, and I will move on, your Honours.  I will go to the Act.  The Act was passed on 30 January 2014 and your Honours will see that section 3 sets out the purposes and objects of the Act.  Could I ask your Honours to read the paragraph before the subparagraphs?  Your Honours will see from that preamble to the subparagraphs which set out the purposes and objects two things.  First, Parliament expresses its satisfaction about a state of affairs.  That appears in the first line.  That satisfaction has been reached by Parliament as a result of information that has come to light because of the proceedings of the Commission.  The third thing is that Parliament has reached a state of satisfaction that what has happened is that:

the grant of the relevant licences, were tainted by serious corruption –

That is why in answer to your Honour the Chief Justice’s question I said that it was not our submission that Parliament adopted the findings, but that it looked at the findings and satisfied itself of that state of fact.   Having regard to its status ‑ ‑ ‑

HAYNE J:   State of fact, or state of value judgment about the character to be afforded to events that have happened?

MR SOFRONOFF:   Your Honour, both, because the expression “tainted by serious corruption” is of course a judgment, but it must be based upon a conclusion that some facts exist which justify that characterisation, so it must be both.

FRENCH CJ:   There is a variety of ways, is there not, in which something could be tainted by corruption?

MR SOFRONOFF:   Yes.

FRENCH CJ:   Some involving the direction commission of an offence in relation to the procuration of a licence, other things at a more penumbral stage.

MR SOFRONOFF:   Yes.

FRENCH CJ:   There is no clear definition of ‑ ‑ ‑

MR SOFRONOFF:   No, and in our submission it does not matter for the purposes of characterising a statute as a legislative judgment or a finding of guilt that the offence that is pointed to is one not known to the law.  In the American cases there are the examples of the impugned conduct constituting seditious activity - I will give your Honours the reference to the case in a moment – that being not an offence known to the law, but being a species of conduct in respect of which punishment, as the court found in that case, followed.  So it does not matter, in our submission, that this statute does not identify an offence known to the law.  It identifies a species of conduct that is vicious, in the strict meaning of that term, and which must, at a minimum, involve dishonesty of some kind.

GAGELER J:   Do we read the word “corruption” in this Act as having the technical meaning in the ICAC Act.

MR SOFRONOFF:   No, your Honour, but one would read it as informed by that because the genesis of this Act, as the Parliament asserts, is the proceeding before the Commission and the Commission was concerned with corruption of that kind.  So it is at least that if not something else, but it is at least that.  So I would not submit that one would ascribe the meaning to the word “corruption” here that is defined in the ICAC Act, but one would, in asking the question what “corruption” means in this Act, inform that meaning by reference to that Act because of the course of – because of the genesis of this legislative initiative.

Section 3(1) goes on, having regard to that state of satisfaction, to describe what Parliament has been prompted – why Parliament has been prompted to do what it is going to do in succeeding sections, relevantly, subsection (b):

promoting integrity in public administration . . . and deterring future corruption.

In subsection (2), to those ends, that is having been satisfied that the licences were tainted – the grant of the licences were tainted by serious corruption, being satisfied of that and in order to deter future corruption, the specific objects of the Act include 2(c):

to ensure that no person (whether or not personally implicated in any wrongdoing) –

could I ask your Honours to note the word “wrongdoing” -

may derive any further direct or indirect financial benefit from the tainted processes –

“tainted processes” having been defined in subsection (1). Then section 4 cancels the licences. Section 5 voids any current applications. Section 7 provides that no compensation is payable. Section 8 protects the State against liability. Section 10 maintains the obligation of the former licensee to provide information and records obtained as a consequence of complying with the terms of the licence to the State. Section 11 gives the official who obtains those reports and other data certain rights of use.

HAYNE J:   Is the inclusion of item 3 in the schedule critical to your argument, that is to say, would your argument be available if Schedule 6A had contained only Part 2?

MR SOFRONOFF:   Simply cancelled the licence?

HAYNE J:   Yes.

MR SOFRONOFF:   Your Honour, it would depend upon the circumstances, and the reason I answer it in that way is this.  It has been said in this Court by Justice McHugh in a passage to which I will come, following dicta in the United States that the nature of an Act – the character of an Act, as an exercise of judicial power or as an act of attainder for that matter in the United States, will depend upon the circumstances and will depend upon the purpose for which it was passed. 

Now, in our submission, if the facts that can be put before the Court, the constitutional facts that can be put before the Court, demonstrate that a one‑section Act cancelling a licence was enacted for such a purpose, and if such a purpose is prohibited by the Constitution, then it would not assist the legislature to attempt to blind a court looking at the question by saying nothing in the text of the Act. This is no different, in our submission, from how the Court is obliged from time to time to construe Commonwealth legislation enacted under a head of power that is purposive like the defence power.

So the answer to your Honour’s question is it depends upon whether there is a body of facts that will identify the true character of the Act and it cannot be the law that in spite of marked circumstances of which the Court can take account on that assumption, a one‑line Act will defeat a constitutional prohibition – well, certainly in the Commonwealth sphere there is a constitutional prohibition, so a one‑line Act will not do the trick, in our submission, and we would still be here if the facts that underlie our argument were there. 

But the facts are here because in the special case book, as your Honours have seen, one comes to the amending Act but one comes to it from the referral of the House to the Commission to undertake inquiries into fact and to make judgments for the benefit of the House, one can infer, a report to the House, which then basing itself upon that information satisfies itself of a state of facts and for the purposes identified in the Act ‑ ‑ ‑

HAYNE J:   That purpose being, or at least including, the purpose identified in item 3(2)(c), namely that no person innocent or guilty should obtain any financial benefit.

MR SOFRONOFF:   Yes, but, in our submission, if the purpose of the Act includes an improper purpose, one cannot ignore that because there were proper purposes.

FRENCH CJ:   This all goes to the question of characterisation, of course.

MR SOFRONOFF:   Yes.  This is not a question of – I am sorry, your Honour, I cut you off.

FRENCH CJ:   Yes, can I just say, having regard to the rather broad terminology, “tainted by serious corruption”, is there any logical conceptual difference between the formulation of the purpose and object in the chapeau of 3 and a formulation that there is such serious doubt about the integrity of the decisions and processes that culminated in the granting of development licences, et cetera?  Is the Parliament saying anything more than that there is, as it were, a smell about the processes and in the interest of the public and public confidence and the integrity of the processes it should wipe the slate clean?

MR SOFRONOFF:   There is a large difference, in our submission, because one case would be that Parliament refers to a doubt being raised without asserting any conclusion, but this one expresses positive satisfaction that the decisions and processes were tainted by serious corruption, and there is a reference to the ICAC inquiry by name – Operations Jasper and Acacia – and so one cannot, in our respectful submission, ignore the content of those reports as informing the nature of Parliament’s satisfaction as to matters of fact and matters of judgment and as informing the purpose for which this Act was passed.

KEANE J:   Why does it not mean simply that Parliament is reliably informed that the process or the integrity of the process was compromised?  Parliament has been reliably informed by the ICAC procedure and on that footing it is satisfied that the procedure should be expunged.

MR SOFRONOFF:   But that is not what it has done, your Honour.

KEANE J:   Why is that not precisely what it has done?

MR SOFRONOFF:   Because what it has done is not to say, having been reliably informed of certain facts, Parliament decides to cancel these licences by legislative Act.  Here Parliament says - because Parliament is satisfied from a certain source, Parliament itself is actually satisfied by reason of that source that the decisions and processes were tainted by serious corruption.

KEANE J:   Yes, it is satisfied because it has confidence in the accuracy of the report of ICAC.  Why can it not just act on that footing?

MR SOFRONOFF:   Well, it has acted on that footing, your Honour, but the consequence of that is that it is acting on a footing of satisfaction of at least dishonest conduct and what it calls serious corruption and then proceeds for particular purposes, including deterrence, to cancel the licences.  So, if this case had arisen in more of a vacuum in the sense that there was no ICAC report, there was some information that had been given to Parliament and Parliament did not assert its satisfaction as to a state of affairs and a judgment, if none of that had happened, then it might be an innocuous Act where all that has happened is that Parliament has exposed a motivation for passing an Act.

KEANE J:   So, if Parliament had said, “Whereas we have noticed reports in the paper that suggest that this process may have been compromised, we will proceed to expunge it”, that would have been all right?

MR SOFRONOFF:   Your Honour, as I answered to Justice Hayne, it would all depend upon what a person in the position of my client can point to.

KEANE J:   But would that be all right?  Parliament could say, “We have read reports in the newspapers that this process was unsatisfactory, and on that footing we have decided to expunge the licences”.  That would be an acceptable exercise of legislative power, but for Parliament to say, “We have been informed by this report from ICAC and we are satisfied that the process is tainted and we should expunge it”, that is not all right.

MR SOFRONOFF:   Correct, your Honour, and the reason is that in the first example that your Honour gives there is, first, no finding that is pointed to.  There is merely a statement that is pointed to in a publication.  Secondly, there is no assertion of satisfaction about a state of affairs by Parliament itself.  Rather it has been moved by something that has been represented.  So there are big differences between the first and second propositions that your Honour ‑ ‑ ‑

FRENCH CJ:   This all going to characterisation, Mr Sofronoff ‑ ‑ ‑

MR SOFRONOFF:   It is, your Honour.

FRENCH CJ:   ‑ ‑ ‑ as to whether it is judicial or non‑judicial.

MR SOFRONOFF:   Yes, and that will depend upon ‑ ‑ ‑

FRENCH CJ:   Judicial or legislative.

MR SOFRONOFF:   I am sorry, your Honour.

FRENCH CJ:   No, that is all right.

MR SOFRONOFF:   That depends upon the actual circumstances surrounding the passage of the Act and how those circumstances bear upon its character by reference to, among other things, purpose to which I will come by reference to the cases.  So, one might accept that in a vacuum a legislative cancellation or other imposition of a disadvantage that could, in some circumstances amount – other circumstances amount to a punishment, might not amount to an arguable judicial act.  But it all depends upon the circumstances. 

Here, we point to the actual request from Parliament that report of the Commission in relation to these matters were not the result of the Commission taking its own initiative.  Parliament invited fact finding and then acted upon the fact finding to draw its own conclusion of fact and then to visit consequences upon certain people for defined purposes.

BELL J:   The satisfaction that it attained was that the process was tainted.

MR SOFRONOFF:   Yes.

BELL J:   That satisfaction led it to expunge the licences, that expungement had consequences for people – some of whom might be suspected of some improper conduct, some of whom were not suspected of improper conduct.  But what finding do you say Parliament made respecting an individual for an offence leading to a punishment?

MR SOFRONOFF:   There are two categories.  Category one is that it has found that in respect of the licensees they were parties to decisions and processes that were tainted by serious corruption.

HAYNE J:   Innocent parties or guilty parties – simply parties.

MR SOFRONOFF:   Well, your Honour, they cannot be innocent or guilty unless a court has found them to be innocent or guilty.  Is your Honour asking me a different question?

HAYNE J:   You say they were parties to a process.

MR SOFRONOFF:   Yes.

HAYNE J:   Yes.  They were the licensees.

MR SOFRONOFF:   Yes.

HAYNE J:   That is stating the obvious.

MR SOFRONOFF:   Yes.

HAYNE J:   So what is the finding?

MR SOFRONOFF:   The findings are that the ‑ ‑ ‑

HAYNE J:   Found that with respect to the licensees that they were parties to what?

MR SOFRONOFF:   They were parties by the conduct of their directors, explained in the findings of ICAC, which involved criminal offences and as a consequence they, as corporate licensees, ought to suffer the fate provided by section 4.

BELL J:   Where do you get that from the provisions of the Act?

MR SOFRONOFF:   One has regard to the second and third lines of section 3(1), the satisfaction of Parliament is:

as a result of investigations and proceedings of the Independent Commission Against Corruption known as Operation Jasper and Operation Acacia ‑ ‑ ‑

BELL J:   That the process is a tainted one, but where does it ‑ ‑ ‑

MR SOFRONOFF:   But those two lines are a reference to the findings in the ICAC report and to nothing else.  There is nothing else they are referring to.

BELL J:   They are a reference to satisfaction respecting the process.

MR SOFRONOFF:   Based, your Honour, upon the result of investigations and proceedings and that result is the report.  That is the result of the investigation and when one looks at the report one sees actual findings made about actual natural persons who were, at the relevant time, directors.  So, one, in our respectful submission, cannot read the second and third lines of section 3 as abstract statements or general statements.  They are direct references to the content of the report and the findings there which result in Parliament’s own satisfaction in the way I have submitted.

KIEFEL J:   Your written submissions place some weight upon the nature of the conduct, the fact that there are offences and that parties are regarded as attached to or benefitting from the offences, all bound up in the notion of a particular kind of finding.  But if, by way of example, an environmental authority had been asked by the Parliament to look at the processes, about the grant of licence, and had reported that environmental matters were not taken into account there is no question of conduct or reprehensible conduct and the Parliament decides that because the processes failed to take into account environmental consequences that they were not complete or proper processes, the licences should be cancelled and the whole thing should start again.

MR SOFRONOFF:   Yes.

KIEFEL J:   Would your submission be the same?

MR SOFRONOFF:   No, because that would not involve any satisfaction involving ‑ ‑ ‑

KIEFEL J:   But what if it said it was satisfied that the processes had failed to take into account ‑ ‑ ‑

MR SOFRONOFF:   No.  I was going to say, your Honour, because it does not involve a finding on the part of any person of a vice, serious corruption.

KIEFEL J:   So that is really the focus of your argument?

MR SOFRONOFF:   Yes.  Yes, your Honour.  One feels very keenly, if it is directed to oneself, that an allegation of serious corruption is not an abstract matter but is a direct accusation of involvement and, therefore, guilt in, relevant involvement of a kind that attends guilt in dishonesty that constitutes not only corruption, but serious corruption.

HAYNE J:   So an essential part of your argument is that item 3(1) in the schedule is to be read as a finding of individualised guilt ‑ ‑ ‑

MR SOFRONOFF:   Yes.

HAYNE J:   ‑ ‑ ‑ in accordance with the ICAC Report.

MR SOFRONOFF:   Yes.  Yes, your Honour.

BELL J:   A finding of individualised guilt of an offence.

MR SOFRONOFF:   Yes.

BELL J:   What offence?

MR SOFRONOFF:   The offences that are referred to in those paragraphs I took your Honours to in the first report of ICAC.  The offences of those men who, for example, knowingly provided false and misleading information in support of the application for the environmental licence, and so on.  They are identified in the report.

FRENCH CJ:   So how then does your characterisation of what Parliament has done in relation to those findings differ from the characterisation of it as, in effect, an adoption or acceptance of the findings made by the ICAC in respect of the individuals?

MR SOFRONOFF:   Your Honour, I do not mind saying – submitting that Parliament adopted the findings.  I put it a different way but I do not eschew the other and I do not want to seize lifelines ‑ ‑ ‑

FRENCH CJ:   No, I just put it to you before.

MR SOFRONOFF:   What Parliament has done in the first five lines of section 3(1) is to incorporate by reference the reports because without reference to the reports, the first five lines are not able to be understood - “tainted by serious corruption” - by whom, in what circumstances, what decisions and process?  What does “Operation Jasper” and “Operation Acacia” mean?  All of that requires resort to the report that it must not be forgotten was commissioned by Parliament for its purposes.  It is not the same as Parliament taking notice of some statements that have been made generally.  This is a report commissioned by Parliament for its purposes. 

So, what we have here is, in our respectful submission, Parliament requiring a commission for its parliamentary purposes to inquire into matters of fact to make findings of commission of offences as a matter of fact to report to Parliament.  Parliament then is satisfied by reference to the content of that report that those findings of fact involving commission of offences is true and then, as a direct response, visits a consequence upon certain people. 

The question remains for me to turn to whether the visiting of the consequences has any significance.  But at least the sequence that we have here is Parliament makes inquiry itself, albeit through a third party, which reports to it formally and in public, reports findings of fact imputing guilt of criminal offences and then Parliament takes those findings, satisfies itself that it believes them and, as a consequence, passes an Act.

So this is far from the position of a one‑line Act cancelling a licence or cancelling any other statutory right or privilege.  This is a process engaged in by Parliament from the point on 11 November that it made the request to the point that it passed this statute.

KIEFEL J:   Some persons or entities about whom no findings were made by ICAC also suffer as a consequence of the cancellation of licences.

MR SOFRONOFF:   Every shareholder who owns shares in NuCoal Resources has also suffered indirectly.  Could I make this brief submission without digressing too far ‑ ‑ ‑

KIEFEL J:   But that means that the effects are not dependent upon conduct of that person.  They are caught up in the process having gone astray.

MR SOFRONOFF:   The effect upon that person is due to the guilt being found in respect of another person.  That is not foreign to law, although it is frowned upon.  Attainder is that.

KIEFEL J:   You say they are not being punished.  They are just caught in the side wind?

MR SOFRONOFF:   They are disadvantaged as a consequence of this.  The person being punished is the company which is the licensee.  As a consequence, NuCoal Resources and its shareholders suffer.  Could I make this brief submission about the relevance of incorporation here?  Of course, in almost every legal circumstance it is relevant to accept the truth that a company is a person in all relevant respects, but in some circumstances, in our submission, it is important to recognise that that legal fiction – statutory legal fiction, albeit it it has real consequences in transactions – is nothing more than a statutory regime established to permit an investor, the shareholder, to contribute money to a business enterprise in circumstances where that investor will be protected against unlimited liability, and for the persons who manage the business of that enterprise, the directors, similarly to be protected against unlimited liability while imposing other liability upon them.

But at the heart of it what there is is nothing more than a statutory regime which permits natural persons to engage in business with other natural persons – outsiders to the company – and to protect one set from unlimited liability and to allow the outsiders to engage in business knowing of those limitations.  So it is one thing in a case like this thing to say, well, it is the companies that have been punished but they have not done anything, but in truth what has happened is that because of the conduct of some natural persons – those identified in the report – other persons including some of them perhaps, insofar as they still remain shareholders, are to be visited with the cancellation of the licence to ensure that no person whether or not personally implicated in any wrongdoing may derive any further direct or indirect financial benefit and so on.

So, in our submission, it does not matter to the character of an Act like this, other things being in favour of a characterisation as a judicial Act, it does not matter that the offence that is complained of is not one that is known to the law as a previous offence, and secondly, that the manner in which the punishment has been affected is by a broadside that it is hoped will hit some of those people and it does not matter that it is going to hit other people as well. 

HAYNE J:   Just to be quite sure about this, Mr Sofronoff, your submission is that it does not matter that the offence is not known to the law, it does not matter that what you describe is punishment is visited upon a legal person other than the person who committed this offence unknown to law?  Those are the two propositions I think you have just advanced.

MR SOFRONOFF:   The second proposition, by punishment I mean the actual immediate consequence of the enactment of the statute, here the cancellation of the licences.  Of course, the cancellation of the licence is merely a legal event.  The real punishment comes from the inability to exploit a resource.  The real punishment comes from the loss of a valuable asset by NuCoal and, indirectly, the loss of value of shareholding by the shareholders of NuCoal.

HAYNE J:   But the important point to make, I think, is that you need to grapple with that the legislature’s enactment of an Act having this effect of dealing with an offence not known to the law by effecting consequences on a legal person other than that who contravened this norm not apparently known to law is a species of an exercise of judicial power.

MR SOFRONOFF:   Yes, and malign because of those two features, because no exercise of judicial power would ever involve the finding of guilt for something that has not been an offence heretofore, and a punishment by reference to mass punishment or the victimisation of a person other than the offender.  That is a feature of the vice inherent in acts of attainder, bills of pains and penalties and the exercise of judicial power to punish by a legislature.

It is, in our submission, no answer to a characterisation of an Act as invalid on these grounds that the Parliament has found that person A has committed the offence of seditious activity or serious corrupt conduct, to bring it closer to home, and has found that in order to vindicate the public good in the way that sentencing does by deterring others, it will punish person B.  That is what it has done here.  It has identified through the agency of ICAC that these particular men engaged in this conduct, rightly characterised, if it occurred, as serious corruption and as a consequence it has visited a punishment upon Doyles Creek.

KEANE J:   In speaking of punishment, as you do, will you take us to a case or cases where the revocation by the Parliament of a grant of rights made under an Act of the Parliament has relevantly been characterised as punishment?

MR SOFRONOFF:   Well, certainly judges on a daily basis cancel statutory licences as punishment - driving licences, I mean.  Nothing novel in that, and that Parliament has done so is our complaint.  Let a court do so under the Mining Act in the proper way that the Mining Act provided before this.

KEANE J:   Well, under the Mining Act, an official could terminate the licence.

MR SOFRONOFF:   And you can appeal to the court then.

KEANE J:   Yes.  Would the termination by the official be an act of judicial power?

MR SOFRONOFF:   No, it would not be as a punishment in order to deter others from similar conduct.  It would be because certain statutory criteria have been met or have failed to be met.  It is an entirely different process.  What your Honour has I think directed my attention towards is that the imposition of a detriment may in one circumstance be a punishment, in another not.

KEANE J:   Well, the removal of a privilege is not normally described as a punishment.

MR SOFRONOFF:   It would be described as ‑ ‑ ‑

HAYNE J:   Except by parent to child.

MR SOFRONOFF:   Well, it is commonly described as a punishment, with respect, in the Magistrates Court when a drink driver comes up for – and it is specified as a punishment under the statute, so there is nothing novel in that.

KEANE J:   In the cases that you have that talk about this notion of punishment being the exclusive province of the exercise of judicial power, do you have any cases where the retraction of a privilege granted under statute by the legislature which granted it is regarded as a punishment?

MR SOFRONOFF:   There are American cases, your Honour, where people who have not sworn an oath of allegiance or people who in the 50s were impugned as communist fellow travellers have had their right to stand for a particular office removed, and that has been held to fall within the definition of an act of attainder.  Could I say this about the US cases, your Honours, because I will deal with a couple of them.

As Justice Dawson pointed out in Polyukhovich, we do not ask whether a particular statute is an act of attainder.  We ask whether in its terms and in its character it offends against some constitutional principle.  Equally in the United States, although because of the constitutional language they refer to acts of attainder and bills of pains and penalties, nevertheless their cases also demonstrate that the courts there look at the substance of the matter, not whether one ticks the boxes as an adequate description of an act of attainder or bills of pain and penalty.

So that raises a question in every case of the kind that your Honour Justice Keane has been putting to me, that it may be in one case something as a punishment, another case it is not.  So the disqualification of a lawyer from the right to practise is not a punishment and is always held not to be a punishment because it is a matter of discipline and the protection of the public good.  The inquiry does not generally involve a lis inter partes.  It is an inquiry by the court or by the tribunal into the open question of fitness to practice. 

Equally in the ASIC cases that our learned friends rely upon, disqualification as an auditor or as a director is a function of an inquiry, an investigation into fitness according to certain professional standards, so they are not punishments.  But, if one disqualifies a person from driving a car or holding a liquor licence, not by means of an administrative procedure involving such an inquiry but as a punishment for an offence, strictly so‑called in a court, well, then it is a punishment even though it involves the extinguishment of this vulnerable thing, the statutory right or privilege.

Although in every sphere, in our respectful submission, the character of a licence to explore as a mere statutory creature and therefore vulnerable to extinguishment does not conclude any question, it just starts the question.  So in certain circumstances it would not constitute an acquisition of property to extinguish the licence.  In others, if the word is deprivation of property, it might fulfil that, and it does not matter that it is a statutory licence that is the creature of statute and therefore in that sense the gift of Parliament which can withdraw it.  So, in our respectful submission, it is no answer to our case to point to the nature of the punishment being cancellation of a licence.  Of course that is a factor but it is no answer.  It depends upon other features that we want to draw attention to.

Your Honours, could I dwell briefly on the nature of punishment in the hope that that will illuminate for the Court the issues for determination in characterising the Act?  In our submission, conviction for an offence of its nature involves the public expression of censure by a public authority, a court, and it is often attended as a consequence of that conclusion by a stigmatisation of the person concerned and under our system of law only the person who has offended, not relatives or associates of the person who offended, and that stigmatisation might be by changing the status of that person into a prisoner or it might be by disqualifying that person from certain rights or privileges or licences that the person enjoyed until then.

Conviction, not always but, in our submission, almost always, involves the imposition of a punishment and, in our submission, the sanction constituted by a punishment differs from the sanction that the law grants to a person suing privately for damages, for example, or some other remedy that directly affects the defendant in a number of ways.  First, of course, the process is initiated by a public office and not by a private individual, in general.

Secondly, the criminal process is initiated not for the purpose of vindicating the rights of a particular victim or person, although it might do that incidentally, it is initiated in order to vindicate the public right to an orderly society.  It is in all cases when it is applied, applied for identified and articulated wrongdoing as your Honour Justice Hayne observed in Al‑Kateb v Godwin 219 CLR 562 at 650. There is always a direct relationship between a finding of an act or omission because an offence is always constituted by an act or omission, and the consequence imposed by the court.

That is why, in our submission, unlike Acts of Parliament, judgments of courts in the criminal sphere are always ad hominem, because the criminal statute that the court applies might be perfectly and will be perfectly general in its application to everybody, but the judgment that is applied will always be an ad hominem judgment by the court. 

The purposes then for which the punishment is applied under principles with which your Honours are of course familiar, include to promote public confidence in the efficacy of the laws of the State, the criminal laws of the State, to deter an offender, to deter other potential future offenders and also, lest it be forgotten, by the sense of retribution that it might evoke rightly and justly in those who observe the process.

So, as Professor Hart pointed out in his famous paper, Prolegemnon to the Principles of Punishment, generally punishment exhibits five characteristics.  The first is that it must involve some pain or other consequences normally considered unpleasant.  Secondly, it must be for an offence against legal rules and norms.  Thirdly, it must be imposed on an actual or supposed offender for his or her conduct.  Fourthly, it must be intentionally administered.  Fifthly, it must be imposed and administered by an authority constituted by a legal system. 

In my submission, it is uncontroversial to say that those characteristics have long been accepted as five of the central characteristics of punishment and which distinguish it from other sanctions imposed by the law.  If we look at this Act, it is necessarily drafted as an ad hominem instrument because it is directed at the conduct of particular persons who are associated with particular licence holders. 

Section 3(1) selects licensees because Parliament is satisfied that the processes by which they got their licences were tainted by serious corruption.  Section 3, in our submission, also involves the making of findings or adopting of ICAC’s findings.  Findings made by an entity at the request of Parliament, Parliament itself not being a suitable body to conduct its own investigation, ICAC being established by law, by statute, as a body that can do that job for Parliament and can compel witnesses.

The effect of sections 8, 9 and, I think, 13 of the ICAC Act is that although ICAC is not to be taken to impute criminal guilt in the sense that a criminal court would impute criminal guilt, it does and it is obliged to make a finding that a person who has engaged in conduct that does constitute an offence and that is to say that under this statute, in our submission, Parliament has imputed guilt to the licence holders by reference to the conduct of identified directors of the licence holders, identified in the ICAC report. 

The guilt is expressed, among other expressions used in this Act by the fact that that conduct was contrary to the standards of what would have happened had the relevant licences been granted pursuant to processes other than the tainted process.

FRENCH CJ:   Why should one characterise this as – I mean, I know multiple characterisations are possible but why cannot one simply characterise what the Parliament is doing as the reversal of the adverse consequences of the conduct of certain individuals as found by the Parliament, assuming in your favour that it has made that finding.

MR SOFRONOFF:   It is, indeed, one of the overt reasons why Parliament has done that and it is stated in the object and purposes.  Another reason is deterrence and so on.  So it is true, your Honour.

FRENCH CJ:   Is it not sufficient unto the day, applying a kind of “Occam’s razor” approach, to explain this in terms of the reversal of an undesirable outcome?

MR SOFRONOFF:   Your Honour, I submit it in answer to a question by Justice Hayne but here there might be one or two proper purposes but if there is an improper purpose it invalidates the Act.  Could I explain that.  In the context of an Act of the Federal Parliament which relies upon three heads of power, two of which are found to be unavailable and one of which is available, that is the end of the question, the Act is valid. 

But here the question is not whether the New South Wales Parliament can point to a head of power.  Here the question is what is the character of the Act?  So, the presence of proper purposes may bear upon – of course, does bear upon that character but it does not, in our submission, conclude that answer because if the purpose is one of the purposes and one of the relevant purposes is punishment, then the addition of other purposes that might have been satisfied by other legislation would not save the Act.

FRENCH CJ:   The question is whether the rollback of an adverse outcome is sufficient - the question is, is that a sufficient explanation?  If it is a sufficient explanation why does one then move on to say it is punitive?  What justifies that additional characterisation?

MR SOFRONOFF:   Because if the Court accepts our submission that the character of this Act, by reference to the process by which it came – the sequence of events by which it came into being and the express purposes asserted by Parliament render it an Act that involves the imposition of a punishment – then it does not matter, in our submission, that along the way some other decent and proper legal purposes have been served.  It does not matter.

Could I deal, your Honours, with the decision of the Privy Council in Kariapper v Wijesinha [1968] AC 717? That was a statute which was passed in Ceylon, consequential upon the findings of a commission – I think it was a royal commission – that certain members of Parliament had taken bribes. The statute that was passed – if your Honours would go to page 730E:

The preamble to the Act recorded “And whereas it has become necessary to impose civic disabilities on the said persons . . . The Act consequently imposed disabilities upon any person “to whom the Act applies” –

and those were persons -

specified in the schedule –

in relation to whom findings had been made of bribery, that is, bribery had been proved against them.  So the factum upon which the operation of the Act was based and which rendered that person liable to be affected by the Act was that person’s status as a person in respect of whom a finding had been made of bribery, proven bribery, in the Commission.  The consequence of that status appears at the top of page 731.  It is that the seat of that member of the House of Representatives or of that senator is deemed to have been vacated.

There were two arguments raised before the Privy Council – one of which was that the Act was not a law.  I will pass over that.  The second was that it involved an exercise of legislative power.  The reasons of the Privy Council were given by Sir Douglas Menzies.  If your Honours would go, please, to page 734, just below letter C, his Honour said:

The Act is not an act of attainder or a bill of pains and penalties because it does not condemn the appellant for any action, i.e., it contains no declaration of guilt, and because the disabilities which it imposes have not the character of punishment for guilt.

That is to say, the Act does not adopt any findings.  It does not express any satisfaction as to any state of affairs by Parliament.  What it did was point to an actual fact – a finding of bribery by a commission - and impose a consequence.  The consequence was a disqualification against holding a seat in the House of Representatives or in the Senate.  If your Honours would look to the American dictum just below letter F, where in the United States, just at letter G, one of the definitions of an offending statute:

it pronounces upon the guilt of the party, without any of the forms of safeguards of trial; it determines the sufficiency of the proofs produced, whether conformable to the rules of evidence or otherwise; and it fixes the degree of punishment in accordance with its own notions of the enormity of the offence.”

If your Honours would look on the next page, 735, at the foot of the page, there is a quote from the reasons of Justice Frankfurter in United States v Lovett.  Your Honours will see in the fourth line:

Punishment presupposes an offense, not necessarily an act previously declared criminal, but an act for which retribution is exacted.  The fact that harm is inflicted by governmental authority does not make it punishment.  Figuratively speaking all discomforting action may be deemed punishment . . . But there may be reasons other than punitive for such deprivation.

Over the page in the last four lines:

‘The deprivation of any rights, civil or political, previously enjoyed, may be punishment the circumstances attending and the causes of the deprivation determining this fact’.”

That is to say, the circumstances will characterise the nature of the legislative enactment and, or indeed, whether any other exercise of governmental power constitutes the imposition of punishment.  The reason this Act was not a punishment is explained below letter C.  First:

It is the commission’s finding that attracts the operation of the Act not any conduct of a person –

So the factum is a finding that was made, not a finding by Parliament that a person has done something.  Secondly –

Parliament did not make any finding of its own . . . The question of the guilt or innocence of the persons named in the schedule does not arise . . . It is, of course, important that the disabilities are not linked with conduct for which they might be regarded as punishment –

and moreover, your Honours, the disqualification, or I should say, the qualification of a person to be or not to be a Member of Parliament is very much a matter for Parliament, by passing laws to decide who shall sit in Parliament.  If your Honours go to page 737 at letter F:

Speaking generally, however, their Lordships would observe that it is not readily to be assumed that disciplinary action, however much it may hurt the individual concerned, is personal and retributive rather than corporate and self‑respecting.

Their Lordships concluded that the Act was disciplinary in character, not punitive.  Here, your Honours, one aspect of this Act that I mentioned at the beginning but have not emphasised, is that it is not only the cancellation of the licence that is involved here.  It is also the taking by the State of the licensee’s rights in the information, rights protected by the common law and by equity and rights and information which, as the special case reveals, were acquired at great expense.  It also involves an elimination of the rights that every other licensee enjoys to have the matter of renewal or cancellation adjudicated according to the usual provisions of the Mining Act. 

HAYNE J:   Just by reference to Kariapper and what is said at page 736 of Kariapper ‑ ‑ ‑

MR SOFRONOFF:   Page 736, your Honour?

HAYNE J:   Yes, letter D.

MR SOFRONOFF:   Yes, your Honour.

HAYNE J: Schedule 6A has no bearing upon the determination of any question of guilt or innocence of persons whose conduct was criticised by ICAC, does it?

MR SOFRONOFF:   Not if your Honour is asking whether a court dealing with one of those men in respect of a charge would ever have regard to the Act, the answer is no, the court would not have regard to this Act.

HAYNE J:   At least, unlike a classic form of act of attainder, a person subsequently charged in the courts would not have a plea in bar.

MR SOFRONOFF:   But, your Honour, as the US cases have shown, even a classic act of attainder may not involve imputing a finding of guilt in respect of a known offence.  It might be an offence created by that very act, like seditious activity or serious corruption, and so it will never come before a court in that form.  Yet, in our respectful submission, if one assumes for the purposes of the argument that an act is beyond any doubt an act which makes a finding of guilt of what is, let us say, styled the offence of serious corruption on the part of, let us say, Mr Smith, and as a consequence imposes a punishment on Mr Smith, the fact that no court will ever adjudicate on Mr Smith’s guilt of that offence will not alter the character of the act.

HAYNE J:   But, unlike acts by courts, what is done by this schedule does not constitute a resolution of any issue, let alone a final resolution of any issue of a kind that was, or could have been, joined between parties, does it?

MR SOFRONOFF:   No, because until this Act was passed, nobody could be punished for engaging in something called serious corruption other than in terms of a particular law. 

HAYNE J:   The consequences for which the schedule provides are to be visited upon persons regardless of whether they are guilty or innocent of participation in what you describe as ‑ ‑ ‑

MR SOFRONOFF:   Yes, but because of somebody’s guilt.  If your Honour does not accept that ‑ ‑ ‑

HAYNE J:   A person who is not expressly identified in the schedule, you say, it is sufficiently identified by reading the schedule with the ICAC report.

MR SOFRONOFF:   The answer is yes, because I would submit that nobody at the time in New South Wales who troubled to read section 3(1) would have been in any doubt who the persons were who engaged in that conduct because of the terms of section 3(1).  In our submission, your Honour, the Act is ad hominem because it is directed to the licensee but, as I submitted earlier this morning, it could not be right that if an Act which imposes punishment for an offence happens to impose punishment not on, let us say, an identified offender for an identified offence, but instead imposes that punishment – visits retribution upon a third party, let us say a relative, somebody associated in order to make life miserable for the actual offender who is not amenable to the jurisdiction of Parliament, then that would, in our respectful submission, not save that Act if a Parliament cannot pass an Act imposing a punishment for an offence.  A device like that, in our submission, cannot be an answer.

Could I ask your Honours to go to Re Woolley; Ex parte Applicant M276 (2004) 225 CLR 1, relevantly, and if I could conclude my answer to your Honour Justice Hayne, the fact that it cannot be revisited in a court is one of the complaints because it is final and it is not subject to any judicial review. If it is constitutional, contrary to our submissions, then it is an Act that is absolutely final, subject to, of course - lacks the finality of a judgment because an Act of Parliament is always subject to repeal.

So it also has the characteristic that as a judicial Act it has the flaw that it is not final in that sense, but it is final in the sense that there is no appeal from it, it cannot be examined, no reasons have to be given and, in our respectful submission, the fact that it is not something that a court would have regard to upon the prosecution for an offence, is immaterial.

It also bears another character in that whereas, as the Commission appreciated, there may have been a dispute between the licensee and the State which would have been resolved at the administrative level and then, if necessary, at the level of the Land and Environment Court of New South Wales and then, if necessary, in this Court.  This is a resolution of that potential dispute recognised as one that could emerge, a resolution by Parliament to forestall judicial examination.

Could I ask your Honours in Woolley to go to the reasons of Justice McHugh at page 25?  At the foot of the page, the last sentence there, could I invite your Honours to read that to the end of that paragraph?  Your Honours will see on page 26 in the eighth line:

The terms of the law, the surrounding circumstances, the mischief at which the law is aimed and sometimes the parliamentary debates preceding its enactment will indicate the purpose or purposes of the law.

In that respect, could I ask your Honours to go to special case book volume 2 at page 656 and could I invite your Honours to read paragraph 2 of the Minister’s second reading speech.  Then, after that paragraph, your Honours will see it goes on in the next paragraph in the fourth line at the end:

the Government considers Parliament will be satisfied that the relevant licences and the processes that led to them being granted are tainted by serious corruption.

The words in section 3(1) are not mere rhetoric.  They were an invitation to Parliament actually to be satisfied of the matters of fact.  Then, if your Honours would look at ‑ ‑ ‑

KEANE J:   What do you make of, in the preceding paragraph, the last three sentences:

However, 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 as to whether these licences should be cancelled. 

MR SOFRONOFF:   It is a statement by the Minister that we are not merely relying upon what ICAC said, we invite Parliament to form its own view, not only about whether the licences should be cancelled but your Honour will see in the next paragraph, in the middle:

the Government considers Parliament will be satisfied that the relevant licences and the processes that led to them being granted are tainted –

That is to say he is inviting the Parliament to be satisfied of two things.  One is the existence of corruption as a matter of fact and judgment and the second thing that the appropriate consequence to be visited in respect of that conduct is cancellation.  Your Honour will see that the Minister took some trouble to emphasise the fact of corruption.  On page 657, paragraph 5, after referring to NuCoal in the fourth line:

There is also evidence of corruption involving several of the directors and founders of Doyles Creek Mining –

and over the page – no, I will not deal with that, your Honours.  Could I ask your Honours then to go to Chu Kheng Lim v Minister (1992) 176 CLR 1 at 70 in the reasons of Justice McHugh. Your Honours will see at page 70, at about 10 lines down, after the words, “Bills of Attainder” and the footnote (53):

The Supreme Court of the United States has construed the term “Bill of Attainder” –

Can I ask your Honours to read from there to the foot of that paragraph?  The reason I have taken your Honours to that citation is that this is a case where the statute does seek to punish individuals who were people who conducted themselves in the manner referred to in section 3(1).  But, it also happens to punish people who did not. 

GAGELER J:   Are you using “punishment” in the same sense when you are talking about those two groups of people?

MR SOFRONOFF:   I do not have to, your Honour, in the sense that the punishment is directed to the wrongdoer and that one of the vices of an arbitrary punishment is that it might affect others who are not the object of the punishment.  But, in our submission, this can also be characterised as a statute which, having identified conduct by certain people, then overtly seeks to punish people – the companies being legal people – who, themselves, were not found to have engaged in that conduct.  It is a case where the misconduct of A – in respect of the misconduct of A, A is punished but the Act also seeks to punish B – as a punishment.  If one looks at section 3(2)(c):

to ensure that no person (whether or not personally implicated –

They do not care - not exaggerating.  I mean, Parliament wants to ensure that whether or not you are personally implicated – certainly if you are – you are not to derive any benefit.

FRENCH CJ:   Well, the object as stated in the second reading speech is to put the State back into the same position it would have been if the licence had never been granted.

MR SOFRONOFF:   It is one of the objects.

FRENCH CJ:   Does not the fact that that causes a wide range of people, perhaps, to suffer an economic loss – not just those who are thought to have been guilty - my other point to that as the purpose and the nature of the legislation in this case, that it is to do with rolling back something which should never have happened.

MR SOFRONOFF:   Yes.  What your Honour has put to me arising out of the speech, of course, is stated expressly to be a purpose and object in 3(1)(c) to place the State back where it belongs.  But, in addition, in terms of characterising this Act, conduct is identified.  It is identified in terms familiar to imputation of criminal guilt.

FRENCH CJ:   There is nothing in the purposes about punishment, is there?

MR SOFRONOFF:   Yes, your Honour.  The word “punishment” does not appear.

FRENCH CJ:   No.

MR SOFRONOFF:   But one of the purposes of punishment is deterrence of future such conduct and that appears in 3(1)(b).  One of the purposes of punishment may be to deprive a person who has gained something by an offence of that benefit, and that is 2(a) and 2(c).  We do not point to each of those subparagraphs as indicative of punishment.  We do point to the preamble to 3(1) and to 3(1)(b), (2)(a) and (2)(c), and to the genesis of this legislation in the investigation into conduct and the findings that resulted in the report to Parliament as indicative. 

Your Honour has put to me on a number of occasions that there are other purposes which nobody could complain about and I would accept that that is so, but the purposes that we do raise for consideration are purposes which, in our submission, characterise the statute in the way in which we contend.

KIEFEL J:   Paragraph 3(2)(c) reads as if Parliament is indifferent to personal guilt.

MR SOFRONOFF:   Yes, it is indifferent in whether the effect is felt by a person who is guilty or not guilty.

KIEFEL J:   And therefore their conduct.

MR SOFRONOFF:   And it is indifferent as to whether that person has engaged in that conduct.

KIEFEL J:   If one looks to 3(1), the only person that is really identified by what is said there is the person responsible for the process and the decisions and that is probably the Minister.

MR SOFRONOFF:   It cannot be just the Minister, your Honour, because ‑ ‑ ‑

KIEFEL J:   The grant, the decisions and the processes all point to the Minister, do they not, and the Minister is the only person against whom there is something in the nature of an offence identified.

MR SOFRONOFF:   No, your Honour.  The decision, of course, is that of the Minister, it can only be that of the Minister.  But the processes are processes engaged by the applicant and by the Department and the Minister and the offences identified in the ‑ ‑ ‑

KIEFEL J:   I think perhaps you are perhaps giving the emphasis in the wrong place.

MR SOFRONOFF:   Are we at cross‑purposes, your Honour?

KIEFEL J:   Section 3(1) refers to the grant of the relevant licences and then the decisions and processes that culminated in the grant.  It is the grant of the licences which are the concern, and the processes and decisions that led to it, but it is principally the grant that 3(1) is attaching to.

MR SOFRONOFF:   But, your Honour, could I ask rhetorically why one would read the words that the grant “were tainted” as though the words “decisions and processes” were not important?  There are two things, as the verb “were” shows in the fifth line:  the grant and the decisions and processes.  When one looks at the report, your Honour, the Minister is identified and his conduct is ‑ ‑ ‑

KIEFEL J:   Quite so.  What I am really suggesting to you is that the purpose of this Act, as identified in 3(1), is that the Minister has been identified and therefore an action by government, processes of government have failed.  That is why things have to be cancelled, but the fact that others are not personally implicated in 3(2), the Parliament is indifferent to that.  It is acting in relation to a failure of government.

MR SOFRONOFF:   But, your Honour, to construe ‑ ‑ ‑

KIEFEL J:   Or the Executive, I should say.

MR SOFRONOFF:   I am sorry, your Honour – to construe 3(1) as though it were concerned with the action of the Minister and with the character of the decision would be to ignore the presence as a reason for all of this of serious corruption as tainting that process, and the serious corruption is corruption that was engaged in by the Minister, according to ICAC, but most importantly also by an identified three, or it might have been four, men in respect of each of whom the particular offence is identified.

The consequences are not visited on the Minister; they are visited upon people who may or may not have been implicated, but the reason is to ensure that no person can derive benefit from the processes in which people did these acts and, very importantly - 3(1)(b) – to deter future corruption, not just by the Minister.  The corruption that ICAC had to find, was entitled to find, it found in respect of not just the Minister, but also in the conduct of the directors.

So, if this Act had been passed as an Act merely to – I should not say merely – as an Act whose real purpose was to cancel the licences because of a dissatisfaction of Parliament just with the decision, then the preamble to 3(1) would not be there and, in our submission, 3(1)(b) would not be there.  Indeed, there would not be a need for this Act because the ordinary processes under the Mining Act including taking into account the public benefit ‑ ‑ ‑

KIEFEL J:   The findings made by ICAC in relation to the three gentlemen were conduct with respect to DPI officers and whether they could be misled.

MR SOFRONOFF:   But it was the conduct of the directors that gave rise to the finding of an offence, not of the officers.

KIEFEL J:   Was that conduct directly linked to the Minister’s actions and the reasons why the Minister – as identified by ICAC?

MR SOFRONOFF:   Of course, all of it was directed towards achieving a decision by the Minister.  It was all directed to that.  But the inquiry that ICAC made concerned the Minister’s motivations which were held to be malign – found to be malign.

KIEFEL J:   Yes.

MR SOFRONOFF:   But they went further and in order to – if the Minister had been malign and no person on the part of the licensee had done anything wrong, then one would not have had any reference to “tainted by serious corruption” because there would not have been any involvement on the part of the applicants, 3(1)(b) would have had no place, and (2)(c) would have had no place. 

HAYNE J: Just while you are interrupted then, Mr Sofronoff, can I put this series of propositions to you? Does item 3 in Schedule 6A have the following features: first, it is directed to putting the State back into the status quo ante before the grant of the licences?  That is one feature of it.

MR SOFRONOFF:   Yes.

HAYNE J:   It seeks to do that because it is said that the process which led to the change from the status quo ante was tainted by serious corruption.  That is a further feature.

MR SOFRONOFF:   Yes.

HAYNE J:   A further feature is that the doing of that will work detriment to others; some innocent, some guilty.  It has that feature.

MR SOFRONOFF:   Yes.

HAYNE J:   You say it has the characteristic of an exercise of judicial power because some of those for whom detriment will be worked either are, or may be assumed to have been, or are legislatively assumed or determined to have been, in some way unspecified, involved in what is said to be serious corruption.

MR SOFRONOFF:   Yes, and the consequence is imposed for that conduct on their part.

HAYNE J:   Yes.

MR SOFRONOFF:   Could I take your Honours to one final case and that is the United States v Brown 381 US 437? Could I ask your Honours to go to page 442 at the foot of the page where the Chief Justice observed that the Bill of Attainder Clause was not intended to be construed narrowly, for reasons he explains? If your Honours would read from 10 lines up:

The best available evidence –

down to the foot of the page, and also, your Honours, at page 437 ‑ ‑ ‑

KIEFEL J:   I am sorry, what page?

MR SOFRONOFF:   437, your Honour, about 10 lines down again, beginning with the words “The Court’s pronouncement”.

FRENCH CJ:   I am not sure that is the right page number.

HAYNE J:   I think it may be 443 you are looking at.

MR SOFRONOFF:   I am sorry, 447, your Honours; 447 ‑ ‑ ‑

HAYNE J:   447.

MR SOFRONOFF:   ‑ ‑ ‑ beginning with the words “The Court’s pronouncement” down to the citation of Ogden v Saunders, and at the foot of that page, at the second last line:

In reaching its result –

including the quote from the earlier case.  And, finally, at 448 at the foot of the page, the quote from Lovett which continues over the page.

GAGELER J:   In terms of Supreme Court holdings, which Supreme Court case comes closest to the present?

MR SOFRONOFF:   To the present?

GAGELER J:   What is your best case from the United States Supreme Court?

MR SOFRONOFF:   Could I give that some thought, your Honour, and tell your Honour in due course rather than simply making a mental analysis?  Your Honours, finally could I say in respect of the issue that the legislature was concerned with the Minister’s act that it is remarkable here that the ‑ what we have styled punishment is imposed upon persons in respect of wrongdoing, as 3(2)(c) calls it, and the only person who is not visited with consequences is the Minister.  That is to say, the imperative of this Act lies to a great deal in the object in 3(1)(b) future deterrents, and 3(2)(c) to ensure that wrongdoers do not benefit irrespective of the question

whether innocent people might also suffer as a consequence of depriving wrongdoers of the benefit.  Those are our submissions, your Honours.

FRENCH CJ:   Yes, thank you, Mr Sofronoff.  Mr Bell.

MR BELL:   Thank you, your Honours.  Your Honours have our joint outline of oral argument.  Can I just correlate the subparagraphs of that to the three issues that the Court has indicated in its letter of this morning?  Points 1.1, 1.2 and 1.3 go to the first issue identified by the Court and it is communication.  Point 1.4 goes to the second issue.  We pass over point 2 on the second page, that is our Kable/Kirk argument which is not for now. Page 3 is the copyright section 109 issue.

Your Honours, there are a number of points on which we – in the context of the first issue, the judicial power issue, where we take a quite different line to that adopted by Mr Sofronoff.  I want to develop those differences and areas where we would give different responses to some of the questions posed of him.  The first of those is that, I think unlike Mr Sofronoff, we do not accept that Parliament was adopting or was adopting ICAC’s findings.

We submit that it actually is a potential source of confusion to dip into the ICAC reports to understand the legislation and so, for example, Justice Keane drew Mr Sofronoff’s attention to a part of the second reading speech where it seems pretty clear that the Premier was saying we are coming to our own views, we are not simply adopting Parliament.  That is important for a number of reasons I will develop.  It is also a very important point of differentiation of Kariapper because Kariapper involved a legislative adoption of the findings of a commission of inquiry.  That is not this case on the way we present it.

The second proposition on which we, I think, differ as a matter of submission and emphasis from Mr Sofronoff is that we do say – and we do ask the Court to find – that there are findings of individualised guilt in Schedule 6A. What is found is that whoever else may have been involved in the serious corruption as found, the three licensees whose licences were cancelled were so involved. I will develop each of these, I am just at the moment indicating points on which, in light of the argument that has fallen this morning, we will take a different emphasis. That involves a reading of Schedule 6A and, indeed, some other provisions of the Mining Act to which I will take the Court as a whole.

But it was, we submit, not just a finding that processes were tainted but critical to that finding, in a sense, a step towards that ultimate finding was a finding that there had been serious corruption.  Not that there was a whiff – to use the Chief Justice’s term – or a smell about this whole matter, but a finding that there was serious corruption which, in turn, tainted the processes.  There is an important linguistic distinction and it was a linguistic distinction, as I will seek to demonstrate, very deliberately made by Parliament for a reason.  Thirdly, we would be submitting that even if it is not a finding of individualised guilt, that is not the end of the matter because it is, at the end of the day, a characterisation process and if what is involved is punishment that, we say, is the province of judicial power.

Next, in terms of the propositions and the dialogue which occurred this morning, I think particularly in response to Justice Bell’s question, in our submission, there does not need to be a pre‑existing offence – not necessary for this to be characterised as an exercise of judicial power.  We seek to make that proposition good by reference to a dictum of Sir Anthony Mason in Polyukhovich commenting on Justice Kitto’s well‑known but not exhaustive expedition of judicial power in Tasmanian Breweries.  We also seek to make it good by reference to what Justice Frankfurter said in the Lovett decision in the United States Supreme Court that there need not be a pre‑existing offence because ex post facto laws can be bills of attainder.  In other words, the offence need not be identified until the very act in question. 

Here, we say – to use the language of the plurality in Haskins – the plurality of this Court in Haskins – it has been undoubtedly a finding of a breach of a norm of conduct. The norm of conduct being not to engage in serious corruption, much like the old section 52 of the Trade Practices Act – the norm of conduct is not misleading or deceptive conduct but it is not to engage in misleading or deceptive conduct.  So, we say, the finding has the character of a finding of a breach of a norm of conduct, and we say that is sufficient – or sufficiently close – to inform the character of this Act as an exercise of judicial power.

The next proposition which emerged this morning, particularly I think from the Chief Justice, was ‑ and his Honour used the expression “wiping the slate clean” or “rolling back”. That, with respect, is only to look at part but not the whole of Schedule 6A because Schedule 6A does more than simply roll back, and in that context I have in particular mind those provisions of Schedule 6A which effectively confiscate the intellectual property in the form of the final geological reports.

Now, that is not winding back.  Those final geological reports – and this emerges on the facts in the special case – represent almost $10 million work of proving up – of proving up the tenement.  Now, if this was simply winding back, the government, the Parliament and the government would have no interest in that.  They did not exist beforehand but they were a valuable asset in the hands of my clients, irrespective of whether the licence is granted. 

They were valuable intellectual property, and they are by the operation of this an important aspect of this Act, not given any real emphasis this morning, taken away ‑ without any compensation, taken away.  We say that has a punitive dimension to it which in turn informs other aspects including the cancellation.  Cancellation may be motivated, to take Justice Kiefel’s example, for a number of reasons.  It may be a compliance issue, an environmental issue, but here we say the cancellation was punitive. 

Finally, of the points which emerged and there was some interchange between Bench and Bar in my learned friend, Mr Sofronoff’s, submissions, we do say that clause 3 – and I will obviously come to that in some detail, it is extremely important ‑ but we do not go so far as to say it is absolutely essential.  I think in that sense we are ad idem with Mr Sofronoff’s submission.

Now, I will, in a sense, adapt my submissions to pick up and develop the responses to those six or seven opening points, but I just wanted to indicate to the Court that this is not more of the same.  I do seek on behalf of my clients to put the matter in some respects quite different ways, in other respects subtly different ways to what has gone to date.  The way I wish to move forward, and particularly in the 20 minutes or so before lunch, is to first draw attention to a number of factual matters specific to my two clients by reference to the special case book, and then I want to go to the Act – not the ICAC Act because we do not really see the ICAC Act as informing the discourse in the same way that NuCoal has, but going to the Mining Amendment, the Jasper Act, to highlight some points which we put particular emphasis on.

So may I ask your Honours to take the Cascade, which at least in my copy is orange, the Cascade special case book, and the special case stated begins at page 47.  At page 49, paragraphs 3 and 4, you will see the size of the shareholding and the shareholder spread.  Those investors, or those shareholders, included investors from not only Australia but also from at least the United States and Japan.  Now, without going to it, your Honours will find a reference to that fact in volume 2 of the Cascade special case book, page 983, paragraph 5. 

Secondly, staying with the special case and moving though to page 52, you will see in paragraphs 19 to 29 that considerable work had been done by Cascade.  I should say when I use “Cascade”, I am using it collectively for Mount Penny on the one hand and Glendon Brook Coal, they were the two licensees.  Particularly, what I say at the moment relates to Mount Penny because it was the Mount Penny tenement on which most of the investment was expended.

So the process of proving up the tenement had well and truly begun; one gets that from paragraph 19 and following.  At paragraph 26 on page 53, you will see that over a number of years, prior to the cancellation, there had been the lodgement of exploration reports which are reporting the proving up activity ‑ the prospecting, the geological reports, the information to see whether this was, I suppose at the end of the day, a bankable project or a valuable project for commercial exploitation.  In paragraph 27(a) you will see an agreed proposition –

more than $9.5 million –

had been expended, and that had resulted in the discovery of a very valuable asset ‑ coal. Now, the reference ‑ $9.5 million – is the money which, in a sense, goes into and pays for the work which results in the final geological report, which is effectively – of which, or the commercial utility which is essentially taken away from my clients by clause 9 of Schedule 6A.

In paragraph 28 – and this will become significant for reasons I will come to – you will see that the defendants say New South Wales “is not aware of any non‑compliance” with any of the conditions of the exploration licences, so this is not a cancellation due to non‑compliance.  In paragraph 29, the value placed by an independent expert on the proved‑up tenement was something in the order of – estimated, on a discounted cashflow basis, but an evaluation prepared by Deloitte, something in the order ‑ to cut it at half a billion dollars.  That is, in a sense, to highlight the significance of the – what we submit is the penalty in this case.  Now, I know, I accept that the value of property confiscated does not inform whether or not it is penal or not, but it is a very significant and severe consequence.

The reason, your Honours, I draw attention at this early stage in my submissions to shareholder spread, the level of expenditure in proving up the mine and an estimate of the value of the asset is to make the point that cancellation simpliciter – that is to say – and I think one of the questions this morning, what is if the Act – we just had an Act simply cancelling the licence – what we make is that cancellation simpliciter, without any explanation, of a licence of such value and after such expenditure, would have obvious sovereign risk consequences and ramifications, and in that context the language used in the opening, in the chapeau of clause 3(1) of Schedule 6A, was no mere boilerplate preamble or, to use New South Wales’ language in paragraph 20 of its submissions in the Duncan proceedings, “no more than part of an explanation of the context”.

In our submission, and an important part of our case, is that that finding – and I will come to it ‑ in a sense construe the language used to answer Justice Bell’s point – that that finding or that state of satisfaction was a deliberate explication that Parliament had found serious corruption to exist and that the legislation represented the consequences of this finding ‑ consequences of which cancellation was the principal but not sole consequence ‑ consequence that might otherwise have given rise to large issues of sovereign risk.  In other words, Parliament was going out of its way to capture or characterise what it was doing so that the enormous financial consequences would not be seen as detrimental sovereign risk.

Clause 3(1), the opening words cannot be de‑emphasised; still less severed, as Queensland appears to suggest in paragraphs 77 to 83.  Now, that sovereign risk was on the Parliament’s mind when it passed the legislation which was in fact the day following the introduction of the Bill – this is not a Bill which lingered in the chamber – can be seen in the second reading speech.

HAYNE J:   What follows from the fact that sovereign risk may have been a matter present to the mind of the Parliament?

MR BELL:   What follows, your Honour, is that this is no mere cancellation.  It is a cancellation in what the Parliament described in 3(1) as exceptional circumstances and, we say, explained by Parliament as the consequences of their finding of a breach of normal conduct.  So it is cast not as a political decision, not as a decision which had economic ramifications for the State in terms of future investment, but as we are dealing with a one‑off, exceptional case of serious corruption which we have found to exist and these are the consequences we impose and we impose them in important part to deter future such corruption.

HAYNE J:   Now, are you pointing to these matters as matters bearing on the proper construction of the Act or are you pointing to them, what, as somehow context?  What is the legal rubric under which you are putting these references to sovereign risk?

MR BELL:   Yes, your Honour, there are two aspects of the response to that.  One is, I want to point out that sovereign risk was in the minds of the Parliament by reference to the second reading speech.  One can go to that under section 34 of the Interpretation Act (NSW), but one can also go to it by reference to that passage in Woolley in Justice McHugh’s judgment to assist in informing and understanding of the purposes.

Could I take your Honours just very briefly to those aspects of the second reading speech, not the same ones that Mr Sofronoff took you to, but some additional aspects?  Now, I do not know whether it is most convenient for your Honours to use the second reading speech in the NuCoal book.  It is also reproduced in the Cascade book.  In the Cascade book, it is at page 1002 and 1003.  I will just try and reference it in the NuCoal book.  It is at 656 I am told.  Your Honour, at page 1003, lines 32 and following, you see a paragraph:

A number of submissions suggested that the cancellation of these licences without compensation may raise concerns about sovereign risk.  In response, I say this: The greatest form of sovereign risk, the greatest threat to the stability and certainty . . . is the risk of corruption.  It is the risk of corrupt public officials and their private sector mates that will distort public processes –

Now, at least ‑ and I understand Justice Hayne’s point about not, in a sense, relying too much on the second reading speeches, but one does get ‑ ‑ ‑

HAYNE J:   I just want to know what the legal rubric is that you are engaging.

MR BELL:   The legal rubric – we are involved in an exercise of characterisation whether, for example, there were individual people punished, whether there was a view formed about the guilt or innocence of people, namely, directors of Cascade, and that passage certainly seems to suggest that they are:

corrupt public officials and their private sector mates –

We would also make reference, your Honour, just at the top of that page, to the Premier’s discussion about the meaning of “innocent persons” because, we submit, it appears from that passage that this was a piece of legislation very much concerned with guilt and innocence.

GAGELER J:   Mr Bell, I am sorry, the paragraph beginning “A number of submissions” ‑ ‑ ‑

MR BELL:   Yes.

GAGELER J:    ‑ ‑ ‑you point to that as indicative of the purpose of this Bill, is that right?

MR BELL:   We point to it as indicating it was concerned, yes, to punish corrupt public officials and their private sector mates and, as a matter of substance, by taking away licences from companies of which they were director and shareholders, and in that paragraph you also see the reference down the bottom, second last line, “and deterring future corruption”.  I will develop the submission that there can be no – that the deterrence presupposes the imposition of a punishment.  It is the punishment on particular people that deters future people from not breaching the norm.

BELL J:   The submission is the reference to “private sector mates” in that part of the second reading speech supports a conclusion that the Act makes findings of individualised guilt against the directors ‑ ‑ ‑

MR BELL:   No, no, against the licensees.

BELL J:   Against the licensees.

MR BELL:   Yes, against the licensees.  But I will be drawing your Honours’ attention to section 380A of the Mining Act which takes the consequences of cancellation of a licence and treats that fact – cancellation – as giving rise to what are described as “compliance and criminal conduct issues”.  I will come to that.  That section has not been referred to, to date.

FRENCH CJ:   Well, that is the fit and proper person.

MR BELL:   Pardon, your Honour?

FRENCH CJ:   That informs the fit and proper person criteria.

MR BELL:   It feeds into that.  But what is significant, in our submission, is that there is an equation drawn in that provision between the cancellation of licence and the existence of criminal conduct issues.  I will develop that in due course.  But just to be clear to Justice Bell, individualised justice is being meted out to the licensees as a result of Parliament’s finding - however wrong or misconceived or confused in light of what ICAC may or may not have found – Parliament’s finding that they were, that is to say the licensees, were party to the serious corruption, and one gets there by reading the Act as a whole, to which I will come in a moment.  But then the point of the reference to the paragraph at the top of the page is that the Premier is using the language of innocence and, by implication, guilt.

Now, your Honours, can I just return briefly to the special case book volume 1 and the special case and draw your Honours’ attention on page 61 to paragraphs 52 to 57?  They are paragraphs obviously of relevance to the copyright argument, and there are some important matters agreed in paragraphs 54 and 55 of the special case in relation to the subsistence and ownership of copyright in the final geological reports in respect of the Mount Penny and Glendon Brook tenements for that matter. 

But it is also relevant to note that the reports have been called for and of course the operation of clause 11 of Schedule 6A is to effectively void any intellectual property, it is said. That is subject to our section 109 constitutional challenge but that is what clause 11 makes plain.

Could I then just in the five minutes before the adjournment – assuming the Court is to adjourn at 12.45 ‑ ‑ ‑

FRENCH CJ:   Yes.

MR BELL:   ‑ ‑ ‑ make a few additional observations about the Act, the (ICAC Operations Jasper and Acacia) Act.  The first is by reference to clause 3(1).  Obviously there is “Parliament, being satisfied” but it is “because of information”.  It is not because of findings, not because of findings made, so this is not Kariapper and it is not simply an adoption of any findings.  This is Parliament engaged in its own satisfaction, indicating some sources, or a source of its information, but not the adoption of findings.  Secondly, with all due respect to Justice Bell, not simply a finding that processes and the steps culminating in the granting were tainted processes.  That is part of what is found, but ‑ ‑ ‑

BELL J:   What is the other part?

MR BELL:   The reason why they were tainted and it is “by serious corruption”.

BELL J:   So the processes have been tainted by serious corruption.

MR BELL:   And logically and as a matter of language that entails before you can reach that conclusion or that level of satisfaction of the tainting of those processes, you have found that Parliament has satisfied itself that there was serious corruption.

BELL J:   What does that say about an individualised finding of guilt, as distinct from the process and the taint?

MR BELL:   Well, one starts – and the Act is, we accept, somewhat oblique here, but just as many of the cases and the bills of pains and penalty jurisprudence, the targets are oblique.  But here you have these factors.  You have the finding, we say, of serious corruption.  You have very serious consequences imposed upon only three persons; that is to say, the three licensees.

HAYNE J:   Where the subject – the process that is said to be corrupted is the process that yielded the license.  How do you go from, these licenses were granted by a corrupt process, to the proposition which seems implicit, “Oh”, you say, “the licensee was party to that corruption”.

MR BELL:   Yes.

HAYNE J:   How do you get that out of 3?

MR BELL:   I do not get it just out of 3; I get it out of the whole of the Act, your Honour - the whole of the schedule.  So, you have the first step, a finding of serious corruption - that is part of our argument.  You have a statement in 3(1)(b) that the purpose of this Act, or one of the purposes of the Act, is to deter future corruption.  You ask how does deterrence of future corruption operate?  How, in a practical way, will people be deterred?  Answer:  by the consequences imposed by this Act.

You look to the consequences which are more than, as I have said, merely the cancellation of the licence, and what you see is, who are these consequences imposed on?  They are imposed on the licensees.  Now, how does deterrence work other than to say if somebody in the future engages in serious corruption, they will face the same consequences that these three licensees face in this Act.  Now, it is, in our submission, necessary to join the dots.  We accept that because it is expressed in the passive.  We put that in our written submissions.  But what you conclude is these three people are being punished and if anybody else in the future engages in similar conduct they will be similarly punished.  That is how deterrence works, by the imposition of a punishment.  The only consequence imposed by this Act is the consequence imposed on three people and three people alone, namely, the licensees.

In addition, your Honour, to reinforce, in a sense, the connection we draw between the finding of serious conduct and what we say is the individualised finding, it makes no sense that you would have a subset of the consequences being, in a sense, the cancellation of the intellectual property rights of these three licensees.  That has nothing to do, as I have submitted, with wiping the slate clean.  That has nothing to do with simply rolling things back.  That research, that intellectual property, did not exist.  That expenditure had not been made.  Nobody, neither my client nor the State had that information.  So, we ask, what are those provisions doing other than to punish the people set out in - namely, the licensees?

FRENCH CJ:   That will be a convenient moment, thank you, Mr Bell.

MR BELL:   Certainly, your Honour.

FRENCH CJ:   The Court will adjourn until 2.15.

AT 12.46 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.15 PM:

FRENCH CJ:   Yes, Mr Bell.

MR BELL:   Thank you.  Your Honour, can I identify immediately seven elements which we say taken as a whole feed the characterisation of this as both involving individualised punishment and further alternatively the exercise of judicial power.  The seven are these - and just to preface to say that some of these points will no doubt be said by our opponents to be capable of different characterisations, either judicial or administrative.  That is as may be, and I will deal with that but the fact is that they are capable of being seen as judicial characteristics and then taken as a whole. 

One engages in the characterisation process but the seven are these: the presence of a finding which is characteristic, even if not definitive, in clause 3; the fact of cancellation, number two; three, clause 11, which effectively goes beyond the rolling back and that is dealing with the intellectual property in respect of geological and other reports; fourth, the reference to deterrence in clause 3(1)(b); fifth, the absence of compensation, a matter we say is inconsistent with a view of the licensee’s innocence; six, the voiding, again language we certainly associate with the exercise of judicial power, the voiding of the Part 3A applications; and, seventhly, the legislative characterisation of the consequences of cancellation in 380A of the Act, namely, a body corporate whose licence has been cancelled has compliance or criminal conduct issues.

Some of those matters I touched on and began to elaborate in a little detail before the adjournment.  Others I have not and I will develop those.  But the development of those points, in my submission, takes place in a well‑established – or against a well‑established set of principles which are well known but it is useful to state them and identify them. 

The first is that, obviously, one is engaged in viewing Schedule 6A and, indeed, the entire Act as a whole. One does not focus just on clause 3(1). Secondly, what we are looking at – we are looking at matters of substance and not form. That is important because the submission put against us that there is no express statement that these individuals are being punished does not mean that that is not what is happening.

Formalistically there is no such statement but if, as a matter of substance that is what is happening, that is how the Court should characterise the matter.  Lest any authority were required for the substance and not form and the Act as a whole, can I simply offer your Honours a reference to HA Bachrach Pty Limited v Queensland (1998) 195 CLR 547, paragraph 12. I do not need to take your Honours to it, obviously.

The third informing principle which may be a variation of the substance and not form is that the Court will look to the practical as well as the legal operation of the law to be examined.  That is a proposition we referred to in our written submissions.  It is taken from, again if I just give your Honours the reference without taking you to the case, Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 368 and that is cited at paragraph 39 of our submissions in the Duncan matter. 

So, that is act as a whole, substance not form, practical as well as the legal operation.  The fourth point in this context comes from the Woolley Case, to which Mr Sofronoff took the Court.  He took you to paragraph 60 – Re Woolley; Ex parte Applicant M276 225 CLR 1 and what I am referring the Court to is paragraph 62 which is at pages 26 and 27 and it is in the final sentence at paragraph 62 where Justice McHugh says:

If the purpose of such a law is purely protective, detention by the Executive under that law will not be regarded as penal or punitive in nature.

That throws up this proposition or this submission. It may be that Schedule 6A has protective elements - protecting the State, a certain winding back, et cetera, but these are not mutually exclusive. Our submission is that this is not purely protective legislation. This legislation has a very important and, we would say, large penal or punitive character to it.

So, again, the mere presence of a protective purpose, as perhaps suggested by some of the subparagraphs of clause 3(1) again is not the end of the matter.  Clause 3(1) is not the end of the matter as a matter of form but also even if the Court were to detect the Act operating in some protective way, non constat that the Act is not also acting punitively or penally and as an exercise of judicial power, the question which has been deferred, of course, is whether the State legislature can engage in such an act.

So, returning to some of my seven pointers, or before returning to the particular ones, our submission is that the obvious inference, viewing the seven matters as a whole, viewing the Act as a whole a matter of substance, not form, is that Parliament was passing on and punishing the conduct of the licensees, whomever else may have been involved, e.g., a Minister, an official in the Department involved in the actual granting process.

That can be put conversely given the consequences which I have sought to monetise in some sense by reference to some figures in the special case book.  Given the profound commercial consequences, can it really be supposed that the Parliament in depriving three companies of such valuable property intended to do so without any compensation if Parliament regarded those licensees as innocent or free from the serious corruption Parliament found to have been established?

Our submission is that as a matter of substance, certainly as a matter of practical operation of the Act that must be so. In other words, it is there in a commonsense reading of, on the one hand findings, serious corruption, consequences, identifying who bears these consequences, on the Act, only three parties, only three persons, the three licensees. We say there is – it is joining the dots but we say the clear inference is that there is punishment of these three for that conduct and that is reinforced by the language of deterrence. It is reinforced by clause 11.

When one goes to clause 11 and the, in a sense, the obligation to provide, for example, the final geological reports, the stripping away of any intellectual property and, therefore, the stripping away of any right to compensation which might otherwise be available under the Copyright Act, under section 183 of the Copyright Act, how is that consequence – how is that consequence furthering any of the matters identified in clause 3(1)(a) to (c) other than deterrence? It is not restoring public confidence in the allocation of the State’s resources because it has nothing to do with the allocation of the State’s resources. It is taking something valuable away from the licensees.

KIEFEL J: You say clause 11 has no other purpose, or purposes, than punishment and deterrence?

MR BELL:   Well, we say that is what we submit is its obvious purpose.  I do not understand – I could be wrong about this – New South Wales to have identified some alternate purpose.  Certainly the submission I am making at the moment is that that does not seem, with respect, to advance any of (a), (b) or (c) in 3(1), other than deterrence – i.e., this is a consequence that will be visited upon you in the future.  If you engage in serious corruption you can expect not only to lose your licence but to have valuable intellectual property rights ‑ ‑ ‑

KIEFEL J:   Used in relation to further applications.

MR BELL:   Yes.  That has nothing to do with restoring ex ante – wiping the slate clean because that information, that valuable analysis – what, of course, it is it is the drawing together of millions of dollars’ worth of drilling, geological analysis, research, economic modelling, et cetera.  None of that existed at the time of the grant of the licence.  So it is doing something much more than appears on the face of (a), (b) and (c).  We say it is an element of punishment which travels with other elements of punishment which informs the character of the Act.

HAYNE J:   Does the Act contemplate on reletting of these tenements that there will be an auction for them?

MR BELL:   The Act in terms does not.  I think I am correct in saying – I will be corrected if I am wrong – that in the second reading speech the Premier said the government had no current intention of ‑ ‑ ‑

HAYNE J:   If the purpose of these provisions was to punish and, in particular, to punish the licensees, why give them their fees back?

MR BELL:   Well, a cynical answer may be, your Honour, to make this Act appear to be something it is not, as a matter of substance.  I do not intend that to be a glib answer but the government was warned in the opinion – the joint opinion to which Mr Sofronoff referred – that there may well be constitutional issues with special ad hoc – or ad hominem confiscatory legislation. 

It may well have been - and I accept that, consistent with my submission that one must read the Act as a whole that is there.  That refund of the licence fee is there.  But that is small change in an economic sense in light of what the Parliament knew, namely, that this particular tenement had been worked at for many years and was the subject of many reports which are the subject of agreement in the special case reports.

KIEFEL J:   Does the Mining Act or regulation prohibit or inhibit the use by the Department involved with mining of information that is provided with respect to particular licences for the purposes of other future matters relating to the same area or generally with respect to licencing.  Is there any inhibition placed or use of information which is provided to what are public officials?

MR BELL:   I think the first part of the answer to your Honour’s question, which may not be a complete answer, is there is, as we have seen, agreement that - acceptance by the State that copyright subsisted in my clients in that information, even though it was provided to the State.

HAYNE J:   Copyright in the information, or the manner of its expression?

MR BELL:   I take your Honour’s point but ‑ ‑ ‑

HAYNE J:   Well, the distinction is real and radical, is it not, Mr Bell?

MR BELL:   It is real, but of course it is not literal.  It is also adaptation of that information – adaption of that description, and that is of course – in the field of copyright there can be debates about that.  Your Honour, I do not, to be candid, know the correct answer to your Honour Justice Kiefel’s ‑ ‑ ‑

KIEFEL J: I just notice in clause 11(5) there is reference to clause 58 of the mining regulation which suggests that, at least in part it is addressing some confidentiality provision. But please come back to it, Mr Bell, in due course.

MR BELL:   Yes, and I apologise for not ‑ ‑ ‑

FRENCH CJ:   When you talk of a stripping of intellectual property rights, are you talking about anything other than copyright?

MR BELL:   Well, the language of 11(3) is “No intellectual property right”.  Certainly at the moment ‑ ‑ ‑

FRENCH CJ:   Yes, but in this case?

MR BELL:   It seems to me at the moment to be that as a practical matter it is copyright and adaption.

FRENCH CJ: Your copyright is qualified by the provisions of section 183 and so forth, is it not?

MR BELL:   Yes.

FRENCH CJ:   The State does not contest a liability to comply with the requirements of the Copyright Act in relation to payments.

MR BELL:   Well, it does not in this Court faced with a constitutional challenge to that provision, but ‑ ‑ ‑

FRENCH CJ:   I am just wondering what you are being stripped of if the right is qualifeied to begin with.

MR BELL:   Well, the concession made or offered by New South Wales cannot, in our submission - the forensic concession made cannot, in our submission, alter the language of the Act so they say well, we accept we will pay.  But the language of the Act says, no, New South Wales is not obliged to pay.  That is what the language of the Act says and I will come to that obviously in the 109.  So part of an answer to your Honour the Chief Justice’s question is there is something of a distinction between what the Act says and what New South Wales is now saying it would be prepared to do.  The true insight into the intent of the legislature and the true insight into the character of the Act is what appears on the face of the Act, not in some forensic submission or concession made by New South Wales in these proceedings.

KEANE J:   Mr Bell, when one looks at section 11(1), the authority for the use or disclosure of information is said to be “in connection with any application or tender”.

MR BELL:   Yes.

KEANE J:   Why does that not suggest that the relevant purpose is the optimisation of the exploitation of the tenement or the opportunity to grant the tenement the optimisation of the conditions for the benefit of the public interest of New South Wales?

MR BELL:   Because, your Honour, not falling into the trap of just looking at 11(1) but going back to the Act as a whole, these remedies of these consequences are only occasioned by what is recited in the opening of clause 3, namely, it is only because there has been a finding of serious corruption and the Parliament considered these to be exceptional circumstances, that what is being spelt out as consequences follows.

It would be another question entirely to say that such a clause or an Act of that kind, simply appropriating that information, may be for a particular purpose, but viewed in the context of the Act as a whole, and the various elements which interact, we say it is acting in a punitive way.  To draw an analogy, had the Act been like the Commonwealth BLF Act, just an Act cancelling the licence, that may have been for purposes severed from punishment, may have been for all sorts of purposes, but the character of individual provisions and the purpose lying behind them is informed by the Act as a whole.

KEANE J:   The coal in this land, the coal is vested in the Crown in right of New South Wales?

MR BELL:   I think so, your Honour.

KEANE J:   So this provision assists the State of New South Wales to understand the nature of the resource that is available for exploitation under the Mining Act.

MR BELL:   Undoubtedly, but another answer to your Honour’s question, if I may, may be this.  You find no such express statement of purpose in either clause 3(1) or in clause 3 at all.  In other words, had the Act said, “and for optimising the future exploitation of the State’s finite coal resources”, I would have, with respect, more difficulty with your Honour’s ‑ in a sense, the absence of any such identification, given that the Parliament set about to set out what its purposes were, would suggest that something rather different was happening and that rather different consequence is what I am suggesting.

KIEFEL J:   Parliament is just dealing with the circumstance which pertains after cancellation of the licences, is it not?

MR BELL:   I just missed the first part of your Honour’s ‑ ‑ ‑

KIEFEL J:   Parliament is simply dealing with the circumstances which pertain after the cancellation of the licences; that is to say, the department is left with a lot of information about the coal deposits or reserves in the particular area and it is seeking to take advantage of them.

MR BELL:   No, your Honour, because the government did not have the final geological report at the time.

HAYNE J:   That is the point, is it not, Mr Bell?  It all hangs off clause 9.  Clause 9 is saying licence cancelled.  Despite cancellation of licence, the licensee has to supply some information, and then the provision to which you direct such attention, 11, is dealing with use or disclosure of any information obtained:

in connection with the administration or execution of this Act –

including, perhaps limited to, but including at least that which comes as a result of 9, plus 10.

MR BELL:   We accept that this is, in a sense, obviously a package.  I cannot escape that, but if it is about ‑ as the Chief Justice said ‑ wiping the slate clean, and that is all it is about, why there are ongoing obligations to provide information the State never had?  Why?  You get no guidance in clause 3.

NETTLE J:   Is not the point that the State would have had that information had the permit not been cancelled because the obligation would have continued?

MR BELL:   That is so.

NETTLE J:   Well, then ‑ ‑ ‑

MR BELL:   So the State is ‑ I am sorry.

NETTLE J:   No, go ahead.

MR BELL:   So this is not just a wiping back, it is something else because at the time of cancellation the State did not have it, and the State is saying well, let us go back to a situation, let us refund the application fees et cetera, but let us also take this.  Now, why has that happened?  Let us also take that which we do not now have but which is valuable, likely to be valuable, likely to have cost a lot, and why do we take it without any compensation and cancel any intellectual rights, property rights, relating to its exploitation or use?  Now, that is all ‑ ‑ ‑

KEANE J:   If the State cannot disclose things like the extent of mineralisation how does the State maximise the return for the State of New South Wales when it calls for tenders for exploration licences?  Your client would be uniquely advantaged in the sense that the State would not be able to tell anybody else ‑ ‑ ‑

MR BELL:   But my client is not allowed to apply for a fresh licence.  That is 380A.  My client or a related body corporate or any unrelated body corporate, of which one of my client’s directors is also a director, cannot exploit that information – I am sorry, cannot apply for a licence, and could I perhaps at this juncture take you to 380A of the Act?  Now, your Honours may have – I think your Honours have I think separately an Act entitled Mining and Petroleum Legislation Amendment Act 2014; that is an Act which introduced amendments to section 380A.

Now, I should say at once, your Honours, this Act and, in particular – well, all of the Act but for our purpose the amendment to 381A to which I am going to take you, was introduced two or three months after Schedule 6A was introduced. However, they do, of course ‑ that is to say 380A, as amended, and Schedule 6A ‑ form part of the one Act and, we would say, moreover, 380A and the amendment to it was foreshadowed in the second reading speech as the second element of the legislative response by the Parliament.

Before taking your Honours to the Act, the reference to there being additional legislation coming is seen in the second reading speech in the final paragraph.  It is at page 1003 of volume 2 of the second Cascade special case book, where it is said:

The Government proposes to introduce a further bill to deal with those and other associated matters after Parliament resumes at the end of February –

This is what we apprehend to be that Bill.

FRENCH CJ:   Now, does 380A actually mandate refusal or does it simply make compliance or criminal conduct issues a factor relevant to ‑ or a factor which would justify refusal?

MR BELL:   The latter.

FRENCH CJ:   Yes, I thought so, and there is a right of review also, is there not, on fresh evidence and so forth?

MR BELL:   Yes, and there would be Kirk supervision by the Supreme Court.

FRENCH CJ:   Yes, the whole package.

MR BELL:   Not to get into the Latin territory, but there would – we accept all of that.  But what we would draw attention to start with is that 380A, as amended in subsection (3)(c), effectively equates or treats a:

person or body corporate [who] has held a mining right, or any other instrument issued or granted under relevant legislation, that has been suspended, cancelled or revoked ‑

so in this case Mount Penny as the licensee, that body corporate has compliance or criminal conduct issues by reason of 380(c).  Now, just pausing there, we know from the special case that as a matter of fact there are no compliance issues floating around my client, Mount Penny.  One of the paragraphs in the special case recorded that neither party was aware of any compliance defaults or deficiencies.

The way 380A then operates is this.  That if some other body corporate, whether related to Mount Penny or not, applies for a mining right, if that body corporate has as one of its directors, and director is very broadly defined in subsection (7) of 380A, if that applicant body corporate has as one of its directors someone who has been a director of another body corporate who has had a licence cancelled, then that is a factor – in a sense the tainting of the fresh applicant by the licensee whose licence has been cancelled.

HAYNE J:   No, it is not.  It is a matter that may be taken into account in determining whether that person is a fit and proper person.

MR BELL:   Yes, but it is operating as a negative matter. Plainly, as a matter of substance, it is operating as a negative matter which may be taken into account. I do not seek to put over‑reliance on 380A, and I accept the distinction that the Chief Justice pointed out and I do not cavil with that, but it is an indicator in the same Act that this Parliament was equating, in a way, the cancellation of a licence with the existence of criminal conduct issues. That does, in our submission, feed into my overall submission that, as a matter of substance, the three licensees in Schedule 6A are being punished.

BELL J: Can I just take up with you in this context of the punishment that you identify as seen in part by the provisions of clause 11?

MR BELL:   Yes.

BELL J: Is clause 11 to be understood in the context of section 365 of the Mining Act with its preclusion on the disclosure of any information obtained in connection with the administration or execution of the Act subject to the various matters set out in subparagraphs (a) to (g)? Would we understand clause 11 as having some work to do in that context within the statutory scheme?

MR BELL:   I cannot be absolutely confident in the answer to your Honour’s question, unfortunately, for which I apologise, but 365 seems to contemplate that certain information is already in control of the Minister because (e) – one of the subsections of subsection (1) – contemplates disclosure of information with the concurrence of the Minister. In my submission, clause 11 is rather looking at as between the licensee and the State and the State’s ability to use – free of any intellectual property – right obligations that might otherwise – to which it might otherwise be subject, so it is looking at that slightly different relationship.

May I at this juncture – and I am conscious of the time – say just a little bit more about the significance of the fact that there is what, in our submission, is a finding expressed in clause 3(1) and that allows me to answer a more general point put against us by New South Wales and many of the interveners?  It is put, for example, that findings of – and to pick up Justice Hayne’s point from this morning – not just facts but also violations of norms of conduct, which is what we would say is a composite finding because it is a finding of serious corruption.  That is, in a sense, a conclusion, an evaluative conclusion, implicit in which is that there has been an analysis and intermediate conclusion on particular facts justifying that evaluative conclusion.

But it is put against us that, well, yes, that can be a characteristic of the exercise of judicial power or, indeed, administrative power, but also legislative power, and that is the answer.  We do not say and we do not have to say, because the matter is not - in a sense, we cannot point to it and we do not point to it as definitive, but we do say fact‑finding in Australia is very closely associated with the exercise of judicial and administrative power.  It is very rarely associated with legislation – findings expressed in the body of legislation.  I think Western Australia points out that it is rather different in the United States and so be it.  But we do say the existence of a finding of fact here does assist our submission that this is judicial power being exercised because in Australia it is something which is far more closely associated with the exercise of judicial power than legislative power.

GAGELER J:   But, Mr Bell, this brings me to an aspect of your written submissions that I just do not understand.  Do you say that if the Parliament had given power to an administrator to cancel the licence on the administrator making an administrative finding of serious corruption, that that would be less likely to amount to an exercise of judicial power than the Parliament itself making that finding?

MR BELL:   Absolutely, your Honour, and for a number of reasons.  In fact, the Act already makes provision for the cancellation of licences by an administrative officer.  But in that situation that your Honour ‑ ‑ ‑

GAGELER J:   But not for corruption on the part of the Minister.

MR BELL:   No, no, but for broad criteria.  Now, any such investiture of an administrator with such a power would, of course, be subject to – and I am trenching on what is intended to be the second leg of our argument – the critical difference is any such exercise of administrative power, because that is what it would be, would be subject to the judicial supervision of the Supreme Court of New South Wales and ultimately this Court.  That is what Kirk says.

That is what, in a sense, if this is judicial power being exercised, it is utterly unreviewable.  However biased, however ill‑informed, however pernicious, however wrong‑handed, it is completely unreviewable.  It is an island of power.  It is a quality of State justice, State judicial power beyond this Court’s constitutional role at the apex, unappealable via 73 and sitting there.  But that is to move on to an argument we are not – but we do say there is a distinction, an important distinction.  Just as in Kariapper, in a sense, Parliament acting on - the Ceylonese Parliament acting upon the reports of a special commission, that special commission inquiry, no doubt, certainly is a matter of Australian law, would have been subject to some judicial supervision, minimum standards of justice, for example.  One would have expected an Australian court in an analogous situation to at least have that supervisory power for – form of jurisdictional error including breaches of that kind.

So we do say that there is a real distinction there, and your Honour will recall what I said this morning about the way this Act is dressed up in terms of expressing a finding in language evocative of – powerfully evocative of a breach of a norm of conduct and the imposition of consequences because of - had it been moved, if I can put it that way, had it just been a cancellation, the sovereign risk consequences would have been profound.  So Parliament deliberately purported to act judicially and the Court should find that it was in fact acting judicially here. 

There is a big distinction - just to return to this point about fact finding - between, say, a legislative fact found say, for example, that the Murray‑Darling Basin was in dire need of centralised regulation because of bickering between the States and therefore because of desalination issues, et cetera, or salination issues the Parliament should step in.  That is a fact Parliament - very different, very different indeed, a world away we would say, to find a fact of the kind found here which I have described in terms of a breach of a norm. 

In Tasmanian Breweries (1970) 123 CLR 361 at 374, Sir Frank Kitto described as an element of the exercise of judicial power what he described as “the notion . . . of arbitrament”, as I say, the notion of deciding, the notion of deciding whether or not a standard has been breached. His judgment in that case was in turn referred to – and this brings me to a further point which I referred to when I began my submissions about there not needing to be an actual offence, an extant offence, for there to be a finding of guilt or violation in order to allow something to be characterised as judicial. What Sir Anthony Mason said in Polyukhovich (1992) 172 CLR 501 at 532 point 9, and commenting on Justice Kitto’s non‑exhaustive statement, his Honour said this:

This statement contemplates as one element in the exercise of judicial power the application to the facts of a pre‑existing or antecedent legal principle or standard –

Then he says –

though it does not require that the rule or standard should have been ascertained or precisely defined before the determination is made in the exercise of judicial power.  The need for an inquiry into what the law is presupposes that there may be uncertainty as to the nature, scope or content of the principle or standard to be applied.  Indeed, it is widely recognized that courts, in exercising their judicial power, make and alter law in the sense of formulating new or altered legal principles.

So, we submit - and there are other reasons we make the submission which I will come to, based on authority - we submit that there can be a finding of a violation of a norm, a finding of here, serious corruption, leading to the imposition of consequences, even if there not be on the statute books an offence, serious corruption.

Now, one of the cases we would use to support that submission is indeed the case which is used against us, that is the decision of Justice Frankfurter in United States v Lovett (1946) 328 US 303 at 322 and 323 and at 323, your Honours, in the passage beginning “The offense might be a pre‑existing crime” – do your Honours have that:

The offense might be a pre‑existing crime or an act made punishable ex post facto.  Frequently a bill of attainder was thus doubly objectionable because of its ex post facto features . . . If it is in substance a punishment for acts deemed “subversive” (the statute, of course, makes no such charge) for which no punishment had previously been provided, it could clearly be ex post facto.

Then later in his reasons at 324 he said that:

Punishment presupposes an offense, not necessarily an act previously declared criminal, but an act for which retribution is exacted.

So, in other words, the violation of the moral standard can be established in the very act. In Schedule 6A, we find the act creating this standard, expressed negatively, not to be involved in serious corruption, and finding it violated. Now, that by analogy with the bill of attainder cases is inconsistent with the rather formalistic and literal submission put against us, that there must be an existing offence or crime on the statute books.

In United States v Brown, where the legislation provided that a certain people could not be members of a union, the class of persons was elliptically described, but essentially, members of the Communist Party, by virtue of their membership, not a criminal offence but by virtue of their membership in a sense had a punishment put upon them, according to the court, namely, an inability to act.

Now, those cases are inconsistent with the formalistic submission put against us that for this to be individualised justice, there must be an offence and there must be a linkage between the licensees and the offence.  We say, of course – not to repeat myself – that there is such a linkage.

I wish just to make a couple of other short points by reference to the bill of pains jurisprudence.  This Court does not have to decide, in order to accept our proposition, that this is judicial power being exercised, that this amounts to or is a bill of pains.  Apart from anything else there is a debate, including in this Court, as to what are the elements of a bill of pains and there are some references in our submissions to that.  Our submission is that it is sufficient that it is akin to a bill of pains – or to use Justice Dawson’s language in Polyukhovich adopted by this Court in Haskins – it has characteristics of a bill of pains.

The reason the analogising is useful is this – established jurisprudence that a bill of pains is what Justice Chase in the Calder v Bull Case in the United States described as a legislative judgment, that where there is a bill of pains or the characteristics of a bill of pains, you have Parliament acting judicially. 

So, in other words, if we can show that something similar is happening here that will assist the Court in reaching the characterisation conclusion we urge upon it, namely, that what is, in substance, happening here is something of a judicial character.  That is the point of the reference.  There are put against us a number of – with, of course due respect – quite formalistic or literalistic submissions.  It cannot be because there are no particular events.  I have already demonstrated that that is not necessary but it is also, in our submission, to rather miss the point of our invocation of that language.  Your Honours, in the Haskins Case in paragraph 96 – so Haskins is ‑ ‑ ‑

HAYNE J: 244 CLR 22.

MR BELL:   Yes, thank you, your Honour.  In the Haskins Case, in paragraph 96 in Justice Heydon’s judgment – accepting it was dissenting – there is a useful collection of statements by Sir Anthony Mason and Justice Toohey in Polyukhovich and Justice McHugh in Chu Kheng Lim.  The passage from Justice McHugh’s decision in Chu Khen Lim, namely, where he identified:

“[A] Bill of Pains and Penalties is a law (1) directed to an individual or a particular group of individuals (2) which punishes that individual or individuals (3) without the procedural safeguards involved in a judicial trial.”

That is a very elegant definition.  His Honour, I think, adopted that from some of the United States jurisprudence.  That description of a bill of pains was referred to with apparent approval by Justices Callinan and Heydon in Fardon v Attorney‑General (Queensland) (2004) 223 CLR 575 at paragraph 218.

Finally, on this leg, Kariapper which Mr Sofronoff took the Court to, the only point we would make in addition and Justice Hayne drew attention to page 736D, reading on a little bit to E, Sir Douglas Menzies said it is, of course, important that the disabilities – that is to say the disabilities in the impugned Act:

are not linked with conduct for which they might be regarded as punishment –

Now, in a sense, that is, of course, the whole avenue of debate.  We say the linkage is there, albeit that it is not as explicit as it might otherwise have been but the non‑explicit nature of the linkage of the conduct and the consequences does not mean that a court looking at the matter as a matter of substance, looking at what is really happening, cannot really satisfy itself that there is a linkage between the consequences and the found conduct and that is sufficient.  That would have been sufficient in Kariapper to lead to a different conclusion.  Another point of distinction, of course, though, in Kariapper is that the findings were by way of adoption of the special commission rather than of the Ceylonese legislature itself.

NETTLE J:   So in this case, if the Parliament had just adopted the ICAC’s findings it would have been constitutional on your case?

MR BELL:   No, not necessarily because the Act would still have the critical element of punishment of individuals.

NETTLE J:   Which you say was absent from Kariapper?

MR BELL:   It was absent from Kariapper but the point we make is that ours is a much stronger case because the making of findings by the legislature makes it so much closer ‑ ‑ ‑

NETTLE J:   You get it both ways, you say.

MR BELL:   ‑ ‑ ‑ to the exercise of judicial power, so much more redolent of the exercise of judicial power than in that case.  Of course, it might have been said if there were such an Act here, it might have been said, well, that is not a violation of some constitutional – some Commonwealth constitutional norm because the findings adopted by the Parliament were the sole subject of supervision by the Supreme Court. 

In other words, this Court if it reached or reaches the second limb or if it reached the second leg of the argument on such an Act might say it is not unconstitutional – it is not undermining the Supreme Court.  It is not undermining the structure of an integrated, judicial system because that is not this case.  Our case is stronger.

Now, your Honours, the proposition we put in 1.4 of our submissions that another way of looking at this is to say that this is not in fact a law, I can develop that argument quite shortly, which will no doubt please the Court. It is an alternate way of putting it but it has some similar characteristics. New South Wales accepts, I think in paragraph 42 of its submissions, that the only source of its power to pass the impugned legislation was section 5 of the State Constitution which talks about power to pass laws.

Now, the first point for consideration is this.  There are two views.  Is a law simply that which is embodied in a statute and found on the statute books?  That was a view Justice Dawson expressed in Polyukhovich, I think with the support of Justice Brennan.  On the other hand, is a law something which is recognised not by the fact that it is closed, located in a statute book and expressed as a statute, but is it a law because it has certain characteristics?

The starting point of this argument is obviously – our submission is that it is the latter, and we support that argument, in particular by references to a number of authorities in this Court including recent authorities.  I can do this most efficiently, perhaps, if your Honours have our written submissions in the Cascade matter.

FRENCH CJ:   Are you going to deal with the – I think Victoria has raised the question of private Acts.

MR BELL:   Yes, I will deal with that.  I can deal with that now.

FRENCH CJ:   Very well, suit yourself, whichever suits you best.

MR BELL:   There can be private Acts.  There are schools and universities which at both the State and Commonwealth level are established by Acts of that description but, whilst they are private, they are not ad hominem.  None of those Acts, the private Acts the kind referred to, are Acts which impose what we characterise as penal consequences.  So, in other words, this is one of those non‑exhaustive or non‑definitive points.  We do not say ‑ ‑ ‑

FRENCH CJ:   Well, this is to do with a normal conduct limb of your argument that a private Act may be an Act which confers a right on a particular individual or entity, might it not?

MR BELL:   Yes, but we would say if it is a private Act which imposes a particular punishment on a particular individual or entity, that is another thing.

FRENCH CJ:   Does that take it out of the category of being a law?  Is that the discrimen?

MR BELL:   Yes, in this sense, your Honour.  Part of what I want to put here and what we put in the opening line of our proposition 1.4 is in a sense everything I have said about judicial power carries with it as a corollary that this is not a law because, at the end of the day, it is a characterisation exercise.

The ultimate constitutional question is whether there can be legislative judgments but if we are right in our submission about this not being a law within the meaning of section 5, you do not get to the Kirk/Kable or the history because section 5 is the only source of power identified by New South Wales.

So the point I was seeking to develop by opening the premise of our argument is that a law is not simply, as Justice Gummow said in Momcilovic, or a law is something more than a text.  You will see, your Honours, that we have extracted that passage in paragraph 17 of our submissions in the Cascade matter.

We have also made reference to Chief Justice Latham’s observations in Commonwealth v Grunseit which picked up more recently by this Court in the Plaintiff S157 matter, where the essence, or the defining features of a law are not the fact that they are in a statute but they prescribe a rule of conduct or a norm of conduct.  They do not impose penalties.  They might state the consequence for the violation of such a norm but that is a very different thing to imposing the consequences in the Act.

What a law does is state a normal conduct, set out consequences but leave for a court or a tribunal the determination of violation and the imposition of consequences.  The distinguishing feature here, which takes it out of that notion of prescribing a rule of conduct, (a) there is no such rule prescribed here and consequences are imposed rather than as being stated for future violations of the law, as determined by a court or tribunal.

So the starting point is we are talking about, contrary to Justice Dawson, for example, in Polyukhovich, we are talking about much more than superficially a statute. The cases we rely on to draw that distinction are Commonwealth cases. They are cases in Commonwealth jurisprudence and we, of course, are looking at whether this law is a law within the meaning of section 5 of the New South Wales Constitution.

We are not looking at a question of Commonwealth or federal law, but our submission is ‑ and this is the submission that we seek to make good in paragraph 14 of those same written submissions ‑ is that the meaning of a law at State level must be the same as the meaning of a law at Commonwealth level. Why? A number of reasons. Most sharply, section 109 of the Constitution refers in the same provision to laws of the Commonwealth and laws of the State and, of course, as your Honour knows, as is trite, looks for inconsistency.

One would expect, as a matter of rudimentary statutory construction, that laws of a State ‑ the expression “laws of a State” must have the same meaning as “laws of the Commonwealth”. The same word is used in the same phrase. Secondly, section 5 of the Constitution Act (NSW) – indeed, the whole of the Act is expressly made subject to the Commonwealth Constitution and, of course, was passed two years after it. One would expect there to be a correlation there.

HAYNE J:   Does not this Act abolish rights, duties, powers and privileges?

MR BELL:   It does, but by way of punishment.  That, your Honour, is why I put to the Chief Justice that after, in a sense, establishing those building blocks ‑ ‑ ‑

HAYNE J:   That then just takes you off into Chapter III and what more and different is being added by this argument, other than time.

MR BELL:   That is why I have described it as the corollary of our judicial power argument.

HAYNE J:   In that regard, it may be useful to bear in mind what was said by Justice Gummow and me in Kartinyeri 195 CLR 337, particularly at 372, paragraph 58, about amending Acts and such other delights.

MR BELL:   Amending Act, yes, your Honour. 

HAYNE J:   The Heritage Protection Act which dealt with, amongst other things, only the Hindmarsh Island Bridge, I think, but there we are.

MR BELL:   Yes.

HAYNE J:   But either you have got a Chapter III point or you have got no point, have you not, Mr Bell?

MR BELL:   No, with respect.

HAYNE J:   Why?

MR BELL:   For this reason, your Honour. Before one reaches Chapter III if, as a matter of characterisation, this Schedule 6A is an act of judicial power and if something which is judicial in character, including the elements of the imposition of penalty and punishment, if something which is judicial in character does not meet the description of a law within the meaning of section 5 of the New South Wales Constitution, that is the end of the case. We do not need to reach Chapter III because section 5 is the only source of power identified by New South Wales as authorising the impugned legislation.

So if this is not a law within the meaning of section 5 because the Court accepts our submission on its character that, in our submission, would be the end of the case. If, however – just to track the permutations – the Court rejected the submission that this is not a law, so prima facie it was authorised by section 5, but did accept that at the same time it was a law which exercised power, namely, if part of being a law includes passing legislation, visiting penal consequences on people, it is only then that one needs to go to the next stage, because we say if it is a law but has those characteristics there at Chapter III, difficulties hitherto are unresolved. So, it is not simply, in my submission, just more of the same dressed up differently. Logically, there are different consequences.

GAGELER J:   So an act of attainder is not a law?

MR BELL:   Well, that is, in a sense, the question.  Our submission is that it would not be a law.  It certainly does not prescribe a norm of conduct.  To the extent it alters rights, if the alteration is by way of punishment it is moved from something which is legislative in character to something which is judicial in character.

NETTLE J:   Do you not say the Act here does prescribe a norm of conduct, namely, the offence which it created and found to have been committed?

MR BELL:   No, because it makes an assessment of past conduct.  It is designed – it does not spell out any consequences for the violation.

MR NETTLE:   Put aside the consequences, do you not say that it found it to have been a ‑ committed an offence which had not previously existed?

MR BELL:   Yes, but it does not say anything about that offence going forward.  So it has been determined as having been violated but nothing is said that nobody shall do this in the future.  It does not – there might be an inference that a future Parliament might impose similar consequences but that would be a matter for a future Parliament.  I mean, the Trade Practices Act set up that norm in section 52 and set up section 87 and section 82 to accompany it to be applied by the courts. That is the difference, in our submission.

BELL J:   Were private Acts of Parliament dissolving a marriage not a law?

MR BELL:   Your Honour, that submission made about – when one goes to ‑ actually I think I am correct in saying this ‑ what is cited in support of that proposition, and I think South Australia’s submissions, the Act was – apart from the fact that the Act in question was never given royal assent.

BELL J:   Putting that to one side, it was not an uncommon feature, if one goes back in constitutional history.

MR BELL:   Well, I do not think we accept that as correct as a matter – that is what is asserted, but when one looks at what is cited in support of that, the particular Act in question ‑ ‑ ‑

KEANE J:   The Westminster Parliament did it all the time because that was the only way one could be divorced.

BELL J:   It was the only mechanism, Mr Bell. 

HAYNE J:   Ever so slightly reserved for the rich and famous. 

MR BELL:   I am not sure that any of those Acts granted divorce by reference to fault.

KEANE J:   No, they just declared the parties were divorced.

MR BELL:   Well, your Honour, in other words, an out and out cancellation ‑ ‑ ‑

KEANE J:   Cancellation of rights.

MR BELL:   Yes, but by way of punishment?  No.

KEANE J:   Not by way of punishment at all.

MR BELL:   No, quite, and that is the distinction I am making.

HAYNE J:   We are getting into very dangerous ground here.

MR BELL:   There is one matter I inadvertently passed over.  The principal case put against us by New South Wales is the BLF Case in this Court, which was the cancellation of the union’s registration.  Can I just very quickly deal with that before moving to the Copyright Act because I inadvertently passed over that.  Your Honour, it is said against us that in holding that that act cancelling the union’s registration was not an exercise of judicial power.  It is said by analogy here we have the cancellation of a licence, therefore not an act of judicial power.  The responses ‑ ‑ ‑

FRENCH CJ: The sequence of your argument incidentally is, as I understand it, the first point, this is not a law, therefore outside section 5, therefore invalid, has no effect. If it is a law, it is a law the enactment of which is an exercise of judicial power, and then the reserve point, the Parliament does not have that power.

MR BELL:   Yes, I am not sure that the sequence of the first two ‑ ‑ ‑

FRENCH CJ:   Well, the logical and – the anterior point is this is the law, is it not?

MR BELL:   That is so, but, in a sense, I draw on all the arguments – say it is an exercise of judicial power to answer that question.  But, your Honour, just very briefly, the Commonwealth BLF Case put against us (1986) 161 CLR 88, there are really four answers, so the analogy is deregistration of a union, cancellation of a licence. The deregistration was not judicial power, therefore the cancellation of the licence, not judicial power. That is how it is put against us.

A cancellation of a licence can be done legislatively, administratively or judicially.  We do not cavil with that.  What we say is the cancellation here was judicial.  That is the first point.  So, in other words, the fact that cancellation may, in the particular context of the Act or the deregistration, be characterised as legislative or judicial is not conclusive.  Secondly, key points of distinction – there is no hint or suggestion in the BLF Case that the deregistration was occurring because of contravention of any norm of conduct or any finding. Indeed, at 161 CLR 95, point 3, it was said the Court observed that the legislative deregistration under challenge involved:

no determination by a court or tribunal as to the conduct of the organization –

So it was not a consequence related to the conduct.  Next, the preamble to the Act disclosed its purpose was to preserve “the system of conciliation and arbitration”, nothing about, for example, deterrence.  Finally, unlike the BLF simply involving deregistration, here you have the loss of extremely valuable property rights and a number of other consequences imposed in light of the finding of serious corruption.  I apologise for taking that out of order.

Your Honour, could I now finally and briefly deal with the section 109 inconsistency argument. We say that clause 11 of Schedule 6A is in direct collision with the Copyright Act.  Could I take your Honours first to the Copyright Act?  I am sure all of these provisions will be well familiar to the Court but I will just note them perhaps.  Section 7 of the Act binds the Crown.  Section 13 is a definitional provision equating acts comprised in the copyright of the work with the acts that owner of the copyright has the exclusive right to do and the exclusive rights are set out in section 31(1) of the Act.  Section 32 provides for subsistence of the copyright in the original works.  Section 36 is the infringement provision:

a person who, not being the owner of the copyright –

and we have seen in the special case that Mount Penny and Glendon Brook are accepted to be the owners of the copyright.  Subject to the Act a person not being the owner who does any act comprised in the copyright infringes the copyright in that work.  Section 115 gives the owner of the copyright the right to bring an action for infringement and that then leads, your Honours, to 183 of the Act which - or I should say Division 2 of Part VII, beginning with 182B of the Act, which is the beginning of the division dealing with “Use of copyright material for the Crown”.  One goes relevantly to 183(1) which arrives at:

The copyright in a . . . work . . . is not infringed by the Commonwealth or a State, doing any acts comprised in the copyright if the acts are done for the services of the Commonwealth or State. 

Of course, your Honours, I will come back to it, but your Honours analysed section 183 in the 2008 decision, Copyright Agency Ltd v NSW (2008) 233 CLR 279. Relevantly, your Honours indicated that subsection 183(1) was said to give rise to a statutory quid pro quo. It was the language used which one finds in subsection (5) and in section 183A. The statutory quid pro quo is really found in subsection (5):

Where an act comprised in a copyright has been done under subsection (1), the terms for the doing of the act are such terms as are. . . agreed between the Commonwealth or the State and the owner of the copyright or, in default of agreement, as are fixed by the Copyright Tribunal.

Section 183A is just dealing with special arrangements in relation to copies. Now, what the Court said in the Copyright Agency Limited Case 233 CLR 279 at 301, paragraph 67, is this. The Court said these provisions lay:

out a comprehensive licence scheme for government use of copyright material. 

Then the comprehensiveness of the scheme one sees reflected in paragraph 68:

It is the statutory qualification of exclusive rights which gives rise to a statutory quid pro quo –

In paragraph 70:

There is nothing . . . which suggests that governments may make, or take the benefit of, arrangements which would have the effect of circumventing those provisions –

Your Honours, our submission is that clause 11 of the Schedule 6A is in direct collision with the regime established by 183 and, in particular, 183(5). That is not a matter of reading down – they just are in direct collision.

FRENCH CJ:   So where is it occurring?  It is not occurring through the word “information”, is it?

MR BELL:   No.

FRENCH CJ:   It is occurring through the words “intellectual property right”, is it, in (3)?

MR BELL:   Yes, and the no liability and no compensation ‑ ‑ ‑

FRENCH CJ:   But that is to do with information.  What you are concerned about is copyright subsisting in a work, is it not, copyright in a work subsisting?

MR BELL:   Your Honour, one could only, in my submission, read “information” in the context of these provisions as meaning that which is contained in the copyright.

HAYNE J:   Why?  Why would you do that?

MR BELL:   Well, subparagraph (4) flows directly on from subparagraph (3):

No intellectual property right or duty . . . prevents the use of disclosure of information by the appropriate official as authorised by this clause or the use or disclosure of that information by or on behalf of a person to whom it has been disclosed as authorised by this clause.

FRENCH CJ:   One aspect of the copyright in a literary work is necessarily used by the disclosure of information which may be found in that work.

MR BELL:   It would depend on the particular use.

FRENCH CJ:   That is why I put in the word “necessarily” given this ‑ ‑ ‑

MR BELL: Yes, but what subclause (3), in our submission, is doing – and subclause (4) - accepting though that that also uses the word “information” - is saying that whatever intellectual property rights as exist, they are as nought. They give you no protection. They give you no protection. We say that is directly inconsistent with the protection intended to be given by section 183(5) of the Commonwealth Act.

HAYNE J:   But what infringement would there be of copyright in the literary work if the relevant mining authorities of New South Wales said to prospective tenderers, the previous holder of this licence proved the resources in the area to amount to – here insert a figure.

MR BELL:   That could be said to be an adaptation of the copyright in the ‑ ‑ ‑

HAYNE J:   That is as high as you can put it, is it, Mr Bell?  I need you to put your best foot forward.  What is the infringement that is constituted by that statement?

FRENCH CJ:   Let us imagine in more detail – and they put in holes at the following locations on the following lines which were yielded the following results.

MR BELL:   If that were taken directly from ‑ ‑ ‑

FRENCH CJ:   It is information.

MR BELL:   Yes, it is information but if it were information that derived from the literary work in the adaptation sense then we would say that would trigger the inconsistency.

KIEFEL J:   Putting the duty of confidentiality referred to in 11(3) aside, could 11(3) be taken to say that it is not accepted that an intellectual property right prevents what may be conveyed, that is, the information, but leaves alone how the information is conveyed, that is, the form in which it is expressed.  Because it focuses on the information and not how the information appears, how it is presented, that would fit with the duty of confidentiality attaching to information alone rather than how it is put together and appears in the materials that the government has.

MR BELL:   Yes.  In answering your Honour’s question, also Justice Hayne’s question, your Honours, we dealt – sought to deal with this point about information and the use of information in our written submissions in the Cascade matter from paragraph 36 and following.  The submission is that one should read the reference to information as picking up the expression of information.  In paragraph 37 ‑ ‑ ‑

KIEFEL J:   How do you obtain that as a matter of construction, because it only says “information”?  That is all it is concerned with, the disclosure of information, not how it is expressed.

MR BELL:   Your Honour, in clause 10(4) it may well be picking up the definition of “exploration information” and that exploration of information is that which is contained in the reports provided.  In other words, one would assume that it is carrying forward the same meaning – and this is a point we make in paragraph 38 of the written submissions.

NETTLE J:   But that is information obtained from each of those things.  It is not the reproduction in a material form of the literary or artistic works which comprise them.

MR BELL:   I accept that, your Honour. Our submission, if I can just stay with the written submission here, what we submit on this aspect is really there in paragraph 40, the ultimate submission, that the geological reports are properly construed information within the meaning of clause 11, and if we are right about that, your Honour, there is, by reference to 11(3) and 11(4) this inconsistency. Now, that is the argument.

HAYNE J:   If the argument is right in paragraph 40, you would read it down, would you not, because there is an alternative view.  You are reading information widely in a particular way.  Why would you not read it down, Mr Bell?

MR BELL:   Well, I do not think that is the term which our friends submit ought be read down.  The reading down exercise our friends submit is that one should effectively read into subclause (3) where it says:

No intellectual property right –

their suggestion is other than one arising under the Copyright Act (Cth). Now, the reading in of that language, in our submission, is too strained because there is a very emphatic use of language in subparagraph (3) and subparagraph (4). So, with respect, it is not a question of reading down the meaning of information. The reading down argument propounded by the State is really a reading in argument which is hard to reconcile or marry with the clear language and we seek to, without taking your Honour to it,

we draw on what your Honour Chief Justice French said about direct collision and limits on reading down in your Honour’s decision in Tajjour v New South Wales (2004) ‑ ‑ ‑

FRENCH CJ:   I think I was in dissent there. 

MR BELL:   Yes.

HAYNE J:   His Honour may point that out.  None of the rest of us dare to.

MR BELL:   Your Honour remembers the dissents.  But even accepting that, the fact that it was in your Honour’s judgment is not quite the point except that your Honour is stating a principle which is, we think, not controversial, that there are limits to reading down and where the words do not fairly allow that to happen the conclusion must be invalidity.

GAGELER J:   I am concerned about the factual basis for this part of your argument.  There is not much in the special case about it and what there is concludes with the letter in volume 2 of the special case book at page 1019.  Do we find there a threat to breach your copyright or do we find there some admission of current use of copyright material?

MR BELL: We cannot say that there has been a breach of copyright yet. I think I am correct in saying there are no facts in the special case book which show yet that there has been a breach of copyright. What we do point to is the fact that the reports have been called for and provided and that, if used or reproduced or adapted, given the acceptance by New South Wales of the subsistence of copyright in my clients, if New South Wales relies on clause 11(3) and (4), there will be a breach.

GAGELER J:   According to the letter at page 1019, the report is already on a public file.

MR BELL:   Yes.

GAGELER J:   You do not complain about that?  You cannot complain about that?

MR BELL:   No, we do not complain about that.  If it please the Court, they are our submissions.

FRENCH CJ:   Yes, thank you, Mr Bell.  Mr Solicitor.

MR SEXTON:   If the Court pleases.  May I first, your Honours, just align our outline with our submissions and with the Court’s questions?  In relation to question 1 that is posed by the Court, paragraphs 1, 2 and 4 in our outline will be relevant.  Paragraph 4 talks about a bill of pains and penalties but it closely proximates to the question of punishment.  Paragraph 5 deals with the Court’s second question whether it is a law of the New South Wales Parliament, and paragraph 7 deals with the copyright question, and Mr Free is going to deal with that and I will deal now with the first question that is posed by the Court and then briefly the second question.

Now, in relation to the first question, your Honours, our primary position is that clause 4, the cancellation clause of Schedule 6A, is an orthodox and conventional exercise of legislative power by the New South Wales Parliament, particularly in the sense that an interest created by a prior statute of the right to explore for a publicly owned mineral is affected, in this case extinguished, by a later statute. So the only real question is whether this legislation lies within the power of the New South Wales Parliament.

There are possible limitations on the powers of that Parliament.  For example, legislation concerning relations with foreign nations under the Australia Act and manner and form requirements also under the Australia Act, and it is also true that the federal Constitution imposes some limitations on those otherwise plenary powers, for example, by way of the implied freedom of political communication and the doctrine established in Kable, but we would say that none of those limitations are relevant in the present case. I just note in passing that section 2(2) of the Australia Act provides that:

the legislative powers of the Parliament of each State include all legislative powers that the Parliament of the United Kingdom might have exercised before the commencement of this Act for the peace, order and good government of that State –

and then subject to that question of engagement “in relations with countries outside Australia”.  We have made the argument in our written submissions that even if the passage of the legislation constituted an exercise of judicial power it would fall within the capability of the New South Wales Parliament but that is not the question posed by question one of the Court and so I will not come to that matter at this time.

What Schedule 6A does, in our submission, is to cancel the existing licences and to create a new set of rights that apply to those licences. That is, it is an exercise of legislative power to alter the existing rights. While the legislation may affect existing rights, it does not, however, recognise any dispute about those rights or attempt to determine such a dispute. There was no dispute here as to the existence of legal rights in the licences nor that they were validly created but the licences are cancelled for the future by the legislation.

The adjudication of an existing dispute is a hallmark of judicial power and if I could just take your Honours to the remarks of Justices Crennan and Kiefel in Attorney‑General v Alinta (2008) 233 CLR 542 at 592 to 593, paragraphs 152 and 155. Chief Justice Gleeson and Justice Gummow substantially agreed with that judgment of their Honours. It is a short paragraph, I will just perhaps read it:

The purpose of the judicial function identified by their Honours is not controversial.  An adjudication is undertaken in order to resolve a dispute about the existing rights and obligations of the parties by determining what they are, not in order to determine what rights and obligations should be created.  Holmes J, delivering the opinion of the Court in Prentis v Atlantic Coast Line Co said that a judicial inquiry “investigates, declares and enforces liabilities as they stand on present or past facts and under laws supposed already to exist.  That is its purpose and end.”

Your Honours will appreciate that in quoting these descriptions of judicial power from a small group of authorities, we are doing it to, in a sense, illustrate the contrast between what is said in those instances and what happened here under Schedule 6A. Their Honours added in Alinta that:

Neither a legislative, an executive nor an arbitral function has as its purposes the ascertainment and recognition of existing rights or obligations.  It follows that the result reached cannot be the same as that of the judicial function.  Holmes J described the legislative function as looking to the future and having as its purpose the creation of a new rule to be applied.

None of this, we would say, is undermined in any way by clause 3 of Schedule 6A which deals with the purposes and objects of the schedule. It would operate, we would say, in exactly the same way if clause 3 were not present, and the operation of clause 4, the cancellation clause, does not in any way depend on the terms of clause 3. To quote again from Justice Holmes in Prentis (1908) 211 US 210 at 227, it is a very short quote, your Honours:

And it does not matter what inquiries may have been made as a preliminary to the legislative act.  Most legislation is preceded by hearings and investigations.  But the effect of the inquiry, and of the decision upon it, is determined by the nature of the act to which the inquiry and decision lead up.

Clause 3 does not, in our submission, amount to a finding of fact by the New South Wales Parliament.  It indicates the Parliament’s satisfaction of certain general questions based in part on information resulting from investigations and hearings of the Independent Commission Against Corruption, not by the Parliament itself, without there being any consequences for the accuracy or otherwise of that satisfaction.

Then it sets out a number of purposes and objects for the legislation and we would adopt, perhaps, the formulation that your Honour the Chief Justice made this morning in relation to clause 3 that it expresses, in a sense, a doubt about the process by which the licences were granted rather than to identify any individuals or bodies upon which that process can be blamed.  I think your Honour Justice Kiefel also identified in relation to clause 3 that it focuses particularly on the grant of the licences and the decisions and processes that culminated in that grant rather than on the conduct of particular individuals or organisations.

We would say it is for the Parliament to identify the mischief that it wishes to address by way of legislation, and the role of the courts then in the absence of any constitutional limitations is to find the meaning of the statute’s provisions.  In some ways it resembles here a preamble to statutory provisions that may provide the context for those provisions, but in the absence of some ambiguity as to their meaning cannot, in normal circumstances, affect their operation.

If I could take your Honours to a passage in Bachrach (1998) 195 CLR 547 at 561 and if I could just ask your Honours to read the first third or so of paragraph 12 there that is on 561, just down to the footnote there of (68). Your Honours will recall, because my learned friend, Mr Bell, took your Honours to it, that in Polyukhovich (1991) 172 CLR 501, Chief Justice Mason identified one element in the exercise of judicial power as:

the application to the facts of a pre‑existing or antecedent legal principle or standard ‑

That was at page 532.  It is something of a curiosity that many of the cases to which your Honours are going to be taken have been cited by both parties – by the parties on both sides – which may say something about the difficulties of defining judicial process.  We would say that is similar to the description given by Justice Kitto in the Trade Practices Tribunal Case (1970) 123 CLR 361 at 374 where his Honour said about the exercise of judicial power that it was:

an inquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined ‑

It is hard to see, we would say, how the legislation in question here approximates to that exercise or to the descriptions of judicial power from the other authorities that I have taken your Honours to.  Mr Bell also took your Honours to BLF v Commonwealth (1986) 161 CLR 88 where it was argued that the cancellation of the union’s registration was an exercise of judicial power. The argument was put on the basis that there were proceedings pending in this Court where that was an issue.

The argument was rejected and we would say that the rejection would apply a fortiori where there were no pending proceedings.  Mr Bell said that the case could be distinguished on the basis there were no findings of conduct in that particular instance.  There does not seem to us to be a significant difference, but, in any event, of course as your Honours will appreciate, we say that there are no specific findings of conduct in this case in any event. 

There was a preamble in the BLF Case, which is quoted by the Court at pages 92 to 93.  As I have already indicated to your Honours there is some analogy, we would say, between the preamble and between clause 3 in this particular case.

The Court noted at 96 that the legislation did not deal with any aspect of the judicial process but simply deregistered the union.  I will not take your Honours in any detail to the New South Wales case, BLF v Minister for Industrial Relations (1986) 7 NSWLR 372, where there is some suggestion there by Chief Justice Street that the legislation there was an exercise of judicial power, but that was put on the basis that it was an interference with the judicial process, although we would say that in that case it is not at all clear, in our submission, that it was not an exercise of legislative power, even in that situation.

Even if the legislation here had some aspects of an exercise of judicial power, which we say it does not, it would nevertheless, we would say, be categorised as an exercise of legislative power because it is carried out by a legislative body.  As the Court noted in Bachrach at 562:

the rights, duties, power and privileges created by such legislation –

in that case town planning legislation, were more aptly seen by reason of the notion of –

separation of powers as taking their character from the nature of the body dealing with them.

In R v Spicer (1957) 100 CLR 277, Justice Kitto at 305, I do not need to take your Honours to it, discussed some of the ways in which a power which might in other circumstances be categorised as judicial, can take a different character by reason of the body to whom it has been granted. In any event, we would say the exercise here was not one of applying existing law but rather declaring new rights and duties by varying the existing law.

FRENCH CJ:   As both an administrative and a judicial process in relation to the cancellation of authorities under the Mining Act, I think, is there not section 125 where an authority can be cancelled on the basis of a contravention of the Act, even though it has not been prosecuted, and then there is a full review available in the Land and Environment Court which I assume is properly characterised as a judicial power.

MR SEXTON:   Yes, your Honour.

FRENCH CJ:   However, it depends on who is exercising it.

MR SEXTON:   Yes.  Now, can I just come to, your Honour, to that question of punishment about which we have heard a considerable amount today, from both Mr Bell and from Mr Sofronoff.  If the legislation in question here, did embody some aspect of punishment, we would say that it would still be valid.  It would presumably be some sort bill of penalties and that would be, we would say, within the power of the New South Wales Parliament and would still not be an exercise of judicial power but it would be a legislative Act. 

However, having said all that, we say that there is not an aspect of punishment about this legislation and that is because the alteration of the rights and obligations relating to the exploration licences were not premised on any offence being committed, nor was any penalty imposed on any actual or supposed offender.

In fact, the ICAC did not make findings of corrupt conduct against any of the licence holders in these proceedings.  There was a finding of corrupt conduct made against one of the plaintiffs – against Mr Duncan – but that did not relate to the grant of one of the licences.  Mr Duncan was not made, therefore, in his capacity as a – Mr Duncan was not a licence holder in any event. 

This seemed to be, if we may say so, one of the problems about the submissions concerning punishment that there is a significant difference between the imposition of adverse consequences by way of legislation and the notion of punishment.  This was illustrated by some of the statements made by Justice Frankfurter in United States v Lovett, to which your Honours have already been taken by Mr Bell – (1946) 328 US 303 at 323 to 324. I think Mr Bell has taken you to those passages.

Mr Bell wanted to distinguish Kariapper [1968] AC 717 in the Privy Council. Your Honours have been taken to that case as well but I just note again the passage at 736 which was by Sir Douglas Menzies which, I think, Justice Hayne put to Mr Sofronoff where he said:

It is the commission’s finding that attracts the operation of the Act not any conduct of a person against whom the finding was made.  Parliament did not make any finding of its own against the appellant or any other of the seven persons named in the schedule.  The question of the guilt or innocence of the persons named in the schedule does not arise for the purpose of the Act and the Act has no bearing upon the determination of such a question should it ever arise in any circumstances.

Largely, that seems to us to be apposite to the present, although in the first sentence there it was said that it was the Commission’s findings that attract the operation of the Act.  There is reference made to the hearings of the Independent Commission against Corruption in clause 3 but it is not possible to say here that any of their findings in relation to individuals or organisations have been specifically adopted by the Parliament. 

To similar effect, six members of this Court said in Haskins (2011) 244 CLR 22 at 37, paragraph 26, that the impugned provisions there imposed no punishment on the individuals in question and also made no legislative determination of guilt and did not make crimes of the acts after they had been done. Your Honours were also taken to Woolley (2004) 225 CLR 1 at 24 to 26, paragraphs 58 to 61, discussion there by Justice McHugh which indicates that even detention by the Executive may not in some circumstances, constitute punishment because, for example, the law in question is enacted solely for a protective purpose.

On that question of punishment, my learned friend, Mr Bell, had, I think, seven factors which he said indicated that the legislation here imposed punishment.  The first of those was the so‑called findings of fact.  Your Honours will appreciate that we reject the proposition that there are findings of fact here that could approximate to findings made by a court.  Second, the cancellation of the licences - that seems to us to be a confusion of adverse consequences with punishment.

Thirdly, clause 11, which raises the copyright question, confiscation of intellectual property rights said Mr Bell. Your Honours on the Bench

referred to a number of aspects of that - Justice Hayne that it depends to some extent on clause 9; Justice Keane, that this was an attempt to prevent a waste of the work that had been done already so that it could be used later by the State; Justice Bell referred to section 365 of the Mining Act, and in clause 3(2)(b) there is a reference to ensuring:

that the State has the opportunity, if considered appropriate in the future, to allocate mining and prospecting rights in respect of the relevant land according to proper processes in the public interest –

Mr Bell’s fourth factor was deterrence.  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.  There are other parties, of course – officials, ministers, et cetera, who were involved in these exercises – but not identified, as I say, in clause 3.

The fifth factor, the absence of compensation – again, it seems to us to be an adverse consequence rather than a question of punishment.  The sixth factor, the voiding of applications under the Planning Act, really, just a consequence, we would say, of the cancellation of the licences.  Finally, the seventh factor, section 380A of the Mining Act, a later statute in a sense which raises – although part of the same legislation, dealing with the question of “a fit and proper person”, and the way in which that can be used to avoid the awarding of a licence, or later action in relation to the licence.  It seems to us to have a very peripheral effect, if any, to that question of punishment.  I appreciate the time, your Honour.

FRENCH CJ:   Yes.  The Court will adjourn until 10.15 tomorrow morning.

AT 4.15 PM THE MATTER WAS ADJOURNED
UNTIL WEDNESDAY, 11 FEBRUARY 2015