Dyer v Ausn Securities & Investment Comm

[1999] HCATrans 301

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B35 of 1999

B e t w e e n -

GRAHAM ALFRED DYER

Plaintiff

and

AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION

First Defendant

NIALL FRANCIS COBURN

Second Defendant

Summons to strike out

HAYNE J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 28 SEPTEMBER 1999, AT 10.11 AM

Copyright in the High Court of Australia

MR J.D. BATCH, SC:   May it please the Court, I appear for the respondent.  (instructed by Ian Galton)

MS E.M. O’REILLY, SC:   May it please your Honour, I appear with my learned friend, MR D.A. KELLY for the applicants.  (instructed by the Australian Securities & Investment Commission)

HIS HONOUR:   Yes, Ms O’Reilly.

MS O’REILLY:   Thank you, your Honour.  We rely on the outline which has been provided.  We read the material in paragraph 1 of the outline, and I would propose only to take your Honour briefly through the statement of claim.

HIS HONOUR:   Can I cut across you in this respect?  Again, I have read the papers, Ms O’Reilly, and counsel should assume that I am generally familiar with them.  May not separate questions arise about paragraphs 1 to 9 of the statement of claim from those that arise in connection with 10 to 15?

MS O’REILLY:   Yes, separate questions can arise, and the statement of claim is divided into those discrete paragraphs.

HIS HONOUR:   The first nine paragraphs seem directed to alleging, putting it broadly, some infirmity in the search warrant that was executed, and consequences that are said to suffer from searches being conducted under an infirm or perhaps invalid or some such search warrant. 

MS O’REILLY:   Yes.

HIS HONOUR:   Those are allegations of a kind that are not unknown in the courts.  The pleading in this statement of claim might fairly be said to be economical, but may not the plaintiff be seeking to raise arguments of a kind that are, as I say, not unknown in the courts?

MS O’REILLY:   In the courts, your Honour, yes. In the original jurisdiction of the High Court, no. Your Honour, paragraphs 1 and 10 of the statement of claim - and for the moment I can leave aside paragraph 10 - paragraph 1 which is the paragraph introducing paragraphs 1 to 9 expressly relies only on section 75(i) of the Constitution.

HIS HONOUR:   Assume for the purposes of argument, as I say entirely for the purposes of argument, that that is insufficient. Is there no other provision, whether of the Constitution or the Judiciary Act, that might be prayed in aid?

MS O’REILLY:   The respondent would need to identify for you the section of the Judiciary Act or the Constitution upon which a claim for damages flowing from alleged invalidity of a warrant could be shown to be in the original jurisdiction of this Court. The defendants have not been able to think of such a provision.

HIS HONOUR:   What is the position of the Commission?  What is the position of ASIC?  In particular, is it the Commonwealth or someone sued on behalf of the Commonwealth?

MS O’REILLY:   The second defendant, Mr Coburn, it would appear, is not an officer of the Commonwealth.  Now, I say that without the benefit of full research on the point because it has not been raised, but the cases appear to say that an officer of the Commonwealth is someone who is appointed individually to his or her role.  That, for example, might be Mr Cameron of the first defendant but not the general legal staff of the ASIC.  If that were not so, one would think that every servant and agent of the Commonwealth might be an officer of the Commonwealth, and that is clearly not so.  But I say that with the qualification that it has not been researched.

HIS HONOUR:   There may be real and lively issues about the position of Mr Coburn.  I understand that.  What about the position of the Commission?

MS O’REILLY:   Under the ASIC Act it is a body corporate with power to sue and to be sued but that does not seem to be the type of body which is contemplated within the phrasing of section 75(v), “officer of the Commonwealth”.

HIS HONOUR:   I am not thinking of 75(v) so much as 75(iii).

MS O’REILLY:   My apologies, yes.  That was a mistake on my part.  I meant 75(iii).

HIS HONOUR:   Then you go off into the Commonwealth Bank v Inglis Case and those cases.  Where I am leading to, Ms O’Reilly, is this.  I can understand wanting to agitate in this Court what I might call the second half of the statement of claim.  As to the first half of the statement of claim, it occurred to me that it may be - and I am anxious that counsel should consider this early in the piece - as to the first half of the statement of claim that your application to terminate summarily should be remitted elsewhere in respect of that part of the claim.

MS O’REILLY:   Indeed, that is the respondent’s application to you this morning.  I am not sure whether or not the respondent’s outline has reached you; it was sent only about 20 minutes or so ago by fax.  But, I am in a position to respond to that.

HIS HONOUR:   Yes, I have the respondent’s outline.

MS O’REILLY:   You will see that a feature of the outline is that it seeks remittal to either the Federal or the Supreme Court of an action which is not yet formulated or pleaded, but may I say five things against remittal.  The first is that remittal under section 44(1) of the Judiciary Act, which is the only possible section of relevance, may only be of a matter pending in the High Court.  This contemplates that the matter to be remitted is a matter properly pending, that is, for example, where the original jurisdiction of the Court was properly invoked or, alternatively, because the section expressly provides that the matter need not have been commenced in this Court in its original jurisdiction that if, for example, it had been removed here, that it was a properly constituted action either prior to removal or at the latest, prior to the remittal application.

There is no direct authority on the point that the matter pending must be a matter properly pending, however, in Jarman’s Case, which is Re Jarman; Ex Parte Cook (1997) 188 CLR 595, two of the Justices in that Court made obiter comments. Justice Brennan at page 601 said, in the last line of that page:

Jurisdiction to remit to another court a matter properly pending in this Court is conferred by section 44 of the Judiciary Act –

which he then set out.  Justice Gummow at pages 633 and 634 – I am not sure, your Honour, whether I said these are obiter comments – but at page 633 commencing at the last line of the page, Justice Gummow said:

It is true that the Judiciary Act proceeds on the footing that, as a first step, the original jurisdiction of this Court has been regularly invoked whether directly pursuant to section 75 of the Constitution or pursuant to a law made by the Parliament under section 76 thereof.

HIS HONOUR:   Which would drive us back, would it not, to whether ASIC relevantly is properly sued in this Court under section 75(iii).

MS O’REILLY:   Yes, quite; to remit a matter there must be a matter properly pending in the original jurisdiction of this Court; presently there is not.

HIS HONOUR:   Well, presently there is not, because you say ASIC is not relevantly sued. Leave aside what they say they rely on, if jurisdiction could be invoked under section 75(iii), then the problem is at least of a different dimension. Now, do you say ASIC is sued on behalf of the Commonwealth or no?

MS O’REILLY:   That has not been looked at, because we have had no notice of it, but may I say that to remit there must be a matter pending.  The plaintiff respondent has not come along this morning with a formulated amendment to the writ and to the statement of claim, so that you are not in a position to say whether or not any application for amendment to the present writ or statement of claim might be allowed or disallowed and you are also, with respect, not in a position under section 44(1) to decide which is the appropriate court, the Federal Court or the Supreme Court, having regard to the subject matter and the parties of this action.  To remit the matter this morning you must decide under section 44(1) to remit the matter to a particular court that has jurisdiction with respect to the subject matter and the parties.  Until you know what the subject matter of some proposed amendment not yet formulated is likely to be, with respect, that cannot be done, and it is idle to speak of amendments until they are formulated.

HIS HONOUR:   How do you say that remitter depends upon the way in which the challenge to the validity of the warrant is founded?

MS O’REILLY:   It is not in the material before you but the warrants were issued under the Crimes Act.  The question is whether or not, in suing the ASIC, any provisions of the Corporations Law need to be the subject matter of the action so as to determine whether the matter could only go to the Supreme Court of Queensland but it could also go to the Federal Court.  It is not for me to guess at an action not yet formulated by the plaintiff or to assist the plaintiff in formulating a cause of action against ASIC or to suggest, if it was able to formulate an action, in what court it should be brought.

HIS HONOUR:   Looking as I have only very briefly at the outline of submissions on behalf of the plaintiff, it seems that the plaintiff does not seek to support the second half of the pleading;  does not seek, so far as I can tell, leave to replead - that is, would accept, as I understand it, an order striking out the second half of the pleading without liberty to replead, but seeks to replead the early part of the statement of claim and to do so on remitter either to the Federal Court or to the Supreme Court.  Now, do you oppose the taking of those courses?

MS O’REILLY:   Yes, for two reasons.  The first is as has already been submitted.  If the paragraphs 10 to 15 are struck out and necessarily, if paragraph 2 of the writ of summons is struck out, that would leave a writ of summons saying the plaintiff’s claim is damages.  Damages is not a known cause of action.  A writ endorsed, “The plaintiff’s claim is damages” is not a matter capable of being remitted because it is not a matter properly pending in this Court. 

The second reason is, again, as has already been submitted, your Honour cannot know whether to remit a matter which does not even have the status of an action because there is no cause of action called damages, to remit that to the Supreme or the Federal Court.  I would add to that, your Honour, that it is idle to speculate what sort of action or matter the plaintiff might plead and it is a more convenient course in all the circumstances to strike out the whole of this unfortunate writ and to allow the plaintiff to commence again in another court if and when it can formulate a matter.

Your Honour, one final submission, InRe Judiciary Act 1903-1920 and In Re The Navigation Act 1912-1920 29 CLR 257 at 265, the majority of the High Court said in respect of the word “matter” as that word is used in section 76 of the Constitution:

we do not think that the word “matter” in sec. 76 means a legal proceeding, but rather the subject matter for determination in a legal proceeding. 

So, presently, there is no matter pending in this Court for remittal, meaning there is no subject matter for determination in a legal proceeding pending in this Court.

HIS HONOUR:   Does this mean that it would not be open to me to strike out the whole of the statement of claim giving liberty to replead paragraphs 1 to 9, without a formulated amendment before me?  Now, I must say that is a startling result.

MS O’REILLY:   With respect, your Honour, no, for this reason.  The action is not constituted by the statement of claim but by the writ.  If you strike out the whole of the statement of claim and if you strike out paragraphs 10 to 15 in particular for want of justiciability of the sovereignty point, then you must also strike out paragraph (b) of the endorsement on the writ.  May I take your Honour directly to the endorsement on the writ, page 2:

The plaintiff’s claim is:

(a)  Damages,
(b) The Plaintiff seeks ruling and declarations from the High Court relating to the legal validity and status of –

ASIC.  Now, paragraph (b) would also have to be struck out so what you would be leaving on foot is a writ of summons saying the plaintiff’s claim is damages.  That is not a known cause of action and that writ should be struck out as well.  It is not known at law.

HIS HONOUR:   All I can say, Ms O’Reilly, is that that seems to me to fly in the face of what has been hitherto standard practice in at least the Supreme Courts for centuries, namely, that you can strike out a pleading giving general liberty to replead without a formulated pleading before you.  I do not understand for the moment, if this matter were to remain in this Court, why it would not be open to me to strike out the statement of claim as embarrassing, vexatious, et cetera, liberty to replead paragraphs 1 to 9, liberty to replead 10 to 15 refused.  Do you say I have no power to make that kind of order?

MS O’REILLY:   Your Honour, my submissions were not premised on power at all.

HIS HONOUR:   No.

MS O’REILLY:   The submissions were simply premised on the fact that in order to exercise a discretion to allow a repleading, one would normally expect that there is a properly endorsed writ of summons to which the proposed new pleading might attach.  In this case there would not be left a writ of summons with an endorsement as to any known cause of action and the submission is that they are formed as a matter of discretion.

HIS HONOUR:   Do you point to any authority in support of that proposition because it comes to me as a shock?

MS O’REILLY:   No, your Honour.  The submission is directed towards the exercise of discretion in circumstances where no known cause of action has been endorsed on a writ and, of course, the applicants are mindful of the cases referred to in Mr Batch’s outline.

HIS HONOUR:   Yes.

MS O’REILLY:   But the matter, your Honour, ultimately rests with discretion and I cannot see any further submissions about that.

HIS HONOUR:   Yes.  It may be convenient, Ms O’Reilly, if, at this point, I call on Mr Batch.

MS O’REILLY:   Yes, thank you, your Honour.

HIS HONOUR:   Yes, Mr Batch.

MR BATCH:   Thank you, your Honour.  Your Honour, firstly may I apologise for the lateness and briefness of the outline.  I accepted the brief only last night.  Similarly, my submissions may also be brief.  Secondly, may I say that at the time I wrote the outline I did not have instructions as to whether the Federal Court or the Supreme Court was sought as the forum for remitter.  I do have those instructions now which is to seek remitter to the Federal Court.

Your Honour has put to my learned friend the possibility of an order that might give leave to replead the first half of the pleading but deny leave to replead the second half.  I have sought and obtained instructions in the last few minutes that my client would not oppose, with respect, would support an order framed in those terms.

HIS HONOUR:   That is, let me understand it clearly, Mr Batch, you do not seek leave to replead paragraphs 10 to 15 of the statement of claim?

MR BATCH:   Yes, your Honour.  They are instructions I have obtained during the course of argument in the last few minutes.

HIS HONOUR:   Yes.  What is the basis on which the Federal Court would have jurisdiction over this matter?

MR BATCH:   Your Honour, as my learned friend has said, although not pleaded or in affidavits, the search warrants which are at the basis of the first half of the pleading were federal Crimes Act search warrants.  Although I have not attempted or been briefed to try to formulate a pleading, I would anticipate that one could frame a pleading either for prohibition or for judicial review to bring the matters of the search warrants squarely within the Federal Court’s ordinary original jurisdiction.

HIS HONOUR:   Why should I make any order for remitter unless and until I know how the action is to be framed?

MR BATCH:   It certainly, with respect, would have been preferable had I been able to come in today with a formulated pleading and I acknowledge the force of that part of my learned friend’s submissions but I have not been able to do that.  Nonetheless, your Honour, given the last question and answer between Bench and Bar table, my submission is that it is apparent that it will be possible to frame a claim in relation to the search warrants and their alleged invalidity within the Federal Court’s jurisdiction so it is not an unlikely proposition that I put to the Court.

HIS HONOUR:   What I do not want to have happen, Mr Batch, is if I make an order for remitter, there then to emerge some question about whether the new action as framed is properly within jurisdiction of the Federal Court and the present inclination of my mind is to say to you that I would be minded to strike out the second half of the statement of claim without liberty to replead, to adjourn the proceeding until you have formulated a fresh form of claim and then, if the parties can agree on which court it should be remitted to, well and good, orders would be made.  If the parties cannot agree on which court the matter should be remitted to, I would bring it back on for further hearing at some time and engage in what the Chief Justice is inclined to call alternative dispute resolution.

MR BATCH:   Your Honour, leaving aside the “adr”, I do not oppose the course your Honour has outlined.

HIS HONOUR:   That will leave a lively question, ultimately, about who bears the costs of today, will it not, Mr Batch, and I suspect that ASIC may be looking to your client for those but, perhaps, again, that is a matter that can be left over.  I do not know.  What do you say I should do about the costs of today?

MR BATCH:   Although it is unfortunate, it is best left over to be judged in light of the next pleading.  We were given no notice, I should say, of this application.  We were not asked to fix our pleading before we were brought here.

HIS HONOUR:   No, you are being terminated summarily or struck right out, Mr Batch.  I mean, how much notice do you want?  Perhaps if I go this far, Mr Batch.  At least the practice with which I am familiar would have it that the party that loses its pleading has the privilege, ordinarily speaking, of paying for losing its pleading and paying for the application to strike it out.  Now, those are matters that we can, perhaps, debate at some other time but they are, perhaps, matters you might bear in mind in deciding whether agreement can be reached between the parties without having to come back.

MR BATCH:   And my…..client is in Court today, or at least in this courtroom today, your Honour.

HIS HONOUR:   Yes.  Perhaps if I hear from Ms O’Reilly.

MS O’REILLY:   Your Honour, there is no opposition to the course proposed procedurally.  As to costs, there is no reason why your Honour ought not deal today with the question of the costs of the application on the usual principles which your Honour has stated.  Further, the defendants seek the costs on a solicitor/client basis.

HIS HONOUR:   Can I tell you why I hesitate to do so, Ms O’Reilly?  It occurs to me that with the reformulated claim, it may be that ASIC will wish to say that the claim as reformulated should not proceed, in which case, if that argument were advanced, if that argument succeeded, all of the costs would go at once and would go in favour of ASIC.  I am just a little troubled about making a partial order for costs today when I am not quite certain about how things will turn out.  If things turned out such that there was leave to replead, the matter then were remitted by consent, then, as at present advised, it seems to me there is much force in what you say about ASIC having its costs of the application and the strike out, but I would rather leave that over until we see where that second hurdle takes us.

MS O’REILLY:   The difficulty, your Honour, is that if there were a properly pleaded cause of action which ASIC recognised and then a consent signed for remittal, the parties would have to incur costs to come back before you in this procedure to simply ask for them.

HIS HONOUR:   No, you could do it by consent order on the papers and that is what I have in mind.  That the parties could obtain a consent order on the papers remitting, disposing of the costs hitherto, I assume, in this set of events simply for the purpose of argument that the disposition of those costs would be of the kind we have been discussing in which ASIC would have its costs of application and costs thrown away by reason of the amendment.  But all of that would be done on the papers and there would be no need to ‑ ‑ ‑

MS O’REILLY:   Your Honour, I do understand what your Honour is saying, but it contemplates that Mr Batch’s people would agree to pay costs that they are resisting today at the Bar table.  It is a most unlikely prospect, your Honour, that they would agree to such costs ‑ ‑ ‑

HIS HONOUR:   If they do not they get the privilege of paying twice, on your argument, if your argument is accepted.

MS O’REILLY:   Thank you, your Honour, I cannot say anything further on the point.

HIS HONOUR:   Yes.  Well, subject to anything that counsel may say then about the form of the order, the orders that I would propose to make are as follows. 

1.  Paragraphs 10 to 15 inclusive of the statement of claim endorsed on the writ struck out with no liberty to replead those paragraphs. 

2.  Adjourn defendant’s summons dated 23 August 1999 to a date to be fixed. 

3.  Reserve costs. 

4.  Certify for attendance of counsel in chambers. 

Now, do either counsel have anything to say about my making orders in that form?  Ms O’Reilly first, do you have any comment?

MS O’REILLY:   No, thank you, your Honour.

HIS HONOUR:   Yes.  Mr Batch?

MR BATCH:   Your Honour, on the notes I took, your Honour has not actually given us leave to replead the first half.  You have given us no leave to replead the second half.

HIS HONOUR:   Yes, and I have not struck out the first half with leave to replead.  Then I should insert as minute two of the order, “Paragraphs 1 to 9 inclusive of the statement of the claim endorsed on the writ struck out with plaintiff having liberty within” - shall I say, 28 days, Mr Batch?

MR BATCH:   Yes, your Honour.

HIS HONOUR:   “Within 28 days to apply for leave to amend and replead those paragraphs.”  Does that suffice Mr Batch?

MR BATCH:   Yes, thank you, your Honour.

HIS HONOUR:   Ms O’Reilly, any comment?

MS O’REILLY:   No, thank you, your Honour.

HIS HONOUR:   Then there will be orders in those terms, namely:

1.  Paragraphs 10 to 15 inclusive of the statement of claim endorsed on the writ struck out with no liberty to replead those paragraphs. 

2.  Paragraphs 1 to 9 inclusive of the statement of claim endorsed on the writ struck out with plaintiff having liberty within 28 days to apply for leave to amend and replead those paragraphs. 

3.  Adjourn defendant’s summons dated 23 August 1999 to a date to be fixed. 

4.  Reserve costs. 

5.  Certify for counsel. 

Thank you.

AT 10.45 AM THE MATTER WAS CONCLUDED