Forge & Ors v Australian Securities and Investments Commission & Ors

[2005] HCATrans 383

[2005] HCATrans 383

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry  No C7 of 2005

B e t w e e n -

WILLIAM ARTHUR FORGE

First Plaintiff

JOZSEF ENDRESZ

Second Plaintiff

DAWN MAY ENDRESZ

Third Plaintiff

ALLAN PAUL ENDRESZ

Fourth Plaintiff

BISOYA PTY LIMITED

Fifth Plaintiff

and

AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION

First Defendant

THE STATE OF NEW SOUTH WALES

Second Defendant

THE COMMONWEALTH OF AUSTRALIA

Third Defendant

Summons for directions

Office of the Registry  No C9 of 2005

B e t w e e n -

WILLIAM ARTHUR FORGE

First Applicant

JOZSEF ENDRESZ

Second Applicant

DAWN MAY ENDRESZ

Third Applicant

ALLAN PAUL ENDRESZ

Fourth Applicant

BISOYA PTY LIMITED

Fifth Applicant

and

AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION

Respondent

Application for removal

GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON TUESDAY, 31 MAY 2005, AT 9.35 AM

Copyright in the High Court of Australia

__________________

MR R.J. ELLICOTT, QC:   I appear for the applicants and plaintiffs with MR W.J. WILCHER.  (instructed by Ken Cush & Associates)

MR S.J. GAGELER, SC:   Your Honour, I appear for the first defendant and the first respondent, that is Australian Securities and Investments Commission.  (instructed by Australian Securities and Investments Commission)

MR M.G. SEXTON, SC, Solicitor-General for the State of New South Wales:   If the Court pleases, I appear for the second defendant in the original proceedings and the Attorney-General for New South Wales who intervenes.  We do not appear…..  (instructed by Crown Solicitor for New South Wales)

MR D.M.J. BENNETT, QC, Solicitor-General of the Commonwealth of Australia:   May it please the Court, I appear for the third defendant and third respondent with my learned friend, MS R.M. DOYLE.  (instructed by Australian Government Solicitor)

HIS HONOUR:   Mr Ellicott, I have looked at the materials that have been filed and the submissions that have come in in writing. I am of the view that two questions, one, the validity of the appointment of Acting Justice Foster and his consequent acting in this matter; and secondly, the validity of the transitional provisions of Chapter 10, are appropriate for consideration by the Full Court. The question is how and by what means can they get there without a procedural imbroglio. To that end, can I hand down some proposed orders which I will go through with counsel.

Proposed order 1 would make an order for removal.  It would not join the Commonwealth and the State for two reasons.  Firstly, on the view that the Court has taken, ASIC is already the Commonwealth within the meaning of 75(iii) and Mr Sexton can intervene once it gets here, if the State wishes to do so, as Attorney.  There is a problem that arises from O’Toole v Charles David 171 CLR 232, in which I was involved in the Full Court of the Federal Court, as to the effect of the removal and the disposition of the cause, the effect on that or the significance for that of the interlocutory decision that seems to be an interlocutory appeal in the Court of Appeal. In Charles David they were separate questions that had got to the Full Court.  The Commonwealth points out there may be some difficulty with that. 

Hence, order 2 which would preserve the Commonwealth’s position to complain about that and order 3 would reserve for the Full Court under section 18 of the Judiciary Act those two questions and an application by ASIC indicated by order 2 would be listed if they pursue it at the same time.  If an application was now made to extend time and to seek special leave from that Court of Appeal decision, it is one way of cutting an impasse.  That application should be made promptly, as indicated in 5.  Insofar as the proceeding in the original jurisdiction of this Court is concerned, that can be demurred to, if that is seen as the right course, or pleaded and demurred, but any demurrer would go forward to the Full Court at the same time as the special leave application and the questions reserved.  Does any question arise about that?

MR ELLICOTT:   I do not have any problem with those orders.  It takes into account all ‑ ‑ ‑

HIS HONOUR:   I have no view, of course, as to how ultimately the substantive questions would turn out in the Full Court, but it seems to me they should get there by some route or other.

MR GAGELER:   Your Honour ‑ ‑ ‑

HIS HONOUR:   Mr Gageler thinks that Mr Ellicott’s issue, question (b), the transitional provisions, is hopeless with no prospect of success.

MR GAGELER:   Hopeless and tedious.

HIS HONOUR:   Yes, all right.  I have heard that said before in the last 20 years, you know.  Sometimes it turns out to be right; sometimes – just enough of occasions it does not turn out to be right.

MR GAGELER:   Your Honour, the procedural problems all arise because of the proceedings in the original jurisdiction of this Court.

HIS HONOUR:   That is right.

MR GAGELER:   As your Honour’s proposed order 5 recognises, all of the procedural problems really go away if the plaintiff as applicant were to seek special leave to appeal from the decision of the Court of Appeal.

HIS HONOUR:   Yes, but that puts the plaintiff at hazard of what I am presently minded to do under order 1 because that is a discretionary matter and I have come to a view as to order 1 on the removal application.

MR GAGELER:   Yes.  Well, in those circumstances ‑ ‑ ‑

HIS HONOUR:   That is the point.

MR GAGELER:   Yes.

HIS HONOUR:   I understand completely what you say.

MR GAGELER:   Yes.

MR BENNETT:   Your Honour, we would agree with your Honour’s opening remarks with the qualification that the second point is hopeless and tedious but we add to that that 13 judges have decided it our way thus far and none have decided it the other way.

HIS HONOUR:   You might end up with 21 deciding it your way.  The last seven are the ones who really count.

MR BENNETT:   I understand in saying that that my learned friend, Mr Ellicott, says it is a different point, although we have difficulty ‑ ‑ ‑

HIS HONOUR:   He does.

MR BENNETT:   ‑ ‑ ‑ seeing what is different about it but the ‑ ‑ ‑

HIS HONOUR:   Well, I am not sure about that.  I have looked at the New South Wales Court of Appeal in Forge (2004) 213 ALR 574. The treatment of this transitional point arose from grounds 1 to 3, I think, dealt with by Justice McColl in the passage which starts at paragraph [24] and goes through to [72].

MR BENNETT:   Your Honour, I will not be tedious by taking your Honour through the decisions of the 13 judges but that is not the main issue.  The problem, as your Honour says, is to avoid the procedural imbroglio.  We are very anxious to have the acting judge point decided in this Court.

HIS HONOUR:   Yes.

MR BENNETT:   The procedural imbroglios will arise unless a special leave application is granted and it is probable ‑ ‑ ‑

HIS HONOUR:   My colleagues might take the view in the Full Court that they will just cut the knot and proceed under order 5 and grant the special leave.

MR BENNETT:   Your Honour, we would certainly be inclined ‑ ‑ ‑

HIS HONOUR:   But there is a point then, of course, that the acting judge point was not in the Court of Appeal, I think, or not debated in the Court of Appeal.

MR BENNETT:   Yes.  We could have another procedural point there as to whether I have a right of intervention on a special leave application which one day, I suppose, will be decided.

HIS HONOUR:   Yes.  Well, there is no matter so – until the leave is granted.

MR BENNETT:   My learned friend may not object to it seeing I am going to support him on special leave, but whichever way one looks there are procedural problems.  As your Honour says, those problems can all be avoided if my learned friend seeks special leave and there is no opposition to that, as seems likely, and that can then subsume the other ‑ ‑ ‑

HIS HONOUR:   Well, I do not know if you can speak for Mr Gageler.

MR BENNETT:   It is a matter for him, of course, but assuming special leave is granted, the procedural problems all go away and it then becomes a case involving the two questions.  I should say this too, your Honour, in relation to the transitional problem, there are perhaps three issues which need to be separated.  This may not affect the orders your Honour makes today and I assume ‑ ‑ ‑

HIS HONOUR:   I couched it at some level of generality because I think there are…..issues.

MR BENNETT:   Yes.  Well, there are three, your Honour.  There is the construction issue which was raised and rejected by the 13 judges.  There is

the constitutional issue on whether you can have a Humby‑type section in a section 51(xxxviii) referral and there is that issue which was debated and resolved in our favour in the cases and there is the new way my learned friend puts it of saying there is no matter, which seems to me to conflate whether there is a matter and when the matter arises, but that, no doubt, is for my learned friend.  No doubt, all three of those will arise in this case, however it gets here.  There are complexities in that.  The acting judge point, of course, involves, as I understand it, some arguments under section 72 and an argument based on Kable.  So there is quite a lot involved in the overall proceedings. 

HIS HONOUR:   Yes, there is.  If it did go ahead, it should be planned on the basis that it is a two‑day matter, I would have thought.

MR BENNETT:   Yes.  But we simply make the point that we are anxious for the acting judge matter to be heard in the Full Court as soon as possible and we agree with your Honour that it is desirable to get rid of the procedural imbroglios.

HIS HONOUR:   Yes, thank you, Mr Solicitor.  Yes, Mr Solicitor of New South Wales.

MR SEXTON:   Your Honour, we do not have anything to add except to wonder in relation to the first question, there may be a distinction perhaps between the validity of the appointment and the capacity of the judge to hear a Commonwealth prosecution, for example, in these particular proceedings, whether that is of any significance at this stage ‑ ‑ ‑

HIS HONOUR:   Well, I will see what Mr Ellicott says, but if it said “the validity of the appointment under the Supreme Court Act of Acting Justice Foster and his Honour’s capacity to act in the cause”, would that meet the situation?  I do not know if the record has at the moment a copy of the acting commission – the commission as acting judge.  I do not think it does.  It will need to.

MR ELLICOTT:   We can have some co-operation from the State ‑ ‑ ‑

HIS HONOUR:   Yes, that is why I raised it with you ‑ ‑ ‑

MR ELLICOTT:   We searched for it but could not find it on any accessible record.

HIS HONOUR:   Yes, I would not have thought it would be generally accessible.  So I will amend 1(a) to read:

The validity of the appointment under the Supreme Court Act 1970 (NSW) of Acting Justice Foster and the capacity of his Honour to act in the cause –

Now, I have reserved liberty to apply and if there is any difficulty with the record, including, for example, what I have just indicated, the judge’s commission, or other difficulties, you can come back to me. 

In the two matters, C9 of 2005 and C7 of 2005, I make the following orders:

1. There be removed into this Court by order under section 40 of the Judiciary Act 1903 (Cth) (“the Judiciary Act”) and without joinder of any additional parties other than those who become interveners that part of the cause pending in the Supreme Court of New South Wales Equity Division, NSWSC 2338 of 2001, (“the cause”), which raises the following questions:

(a)The validity of the appointment under the Supreme Court Act 1970 (NSW) of Acting Justice Foster and the capacity of his Honour to act in the cause; and

(b)The validity of the transitional provisions of Chapter 10 of the Corporations Act 2001 (Cth).

1. Order 1 is made subject to any application which may be made by the Australian Securities and Investments Commission (“ASIC”) to move for the rescission of that order in whole or part.

1. Pursuant to section 18 of the Judiciary Act there be reserved for consideration of the Full Court questions (a) and (b) set out in order 1 of these orders.

1. Any application made by ASIC under order 2 hereof be argued before the Full Court.

1. Any application for an extension of time and any application limited to grounds being (a) and (b) identified in order 1 above for special leave to appeal against the orders of the New South Wales Court of Appeal pronounced 7 December 2004 in the matter [2004] NSWCA 448 be lodged on or before 17 June 2005.

1. Any demurrer by the defendants to the statement of claim in matter C7 of 2005 be listed before the Full Court with the proceedings identified in orders 3, 4 and 5.

1. Costs of today and of 6 May 2005 be reserved.

1. Liberty to apply to a Justice on five days’ written notice.

MR ELLICOTT:   Your Honour, we did have before your Honour an application to stay the proceedings ‑ ‑ ‑

HIS HONOUR:   Yes, I do not think that is necessary, Mr Ellicott.

MR ELLICOTT:   I do not think your Honour need make an order ‑ ‑ ‑

HIS HONOUR:   No, I did not.

MR ELLICOTT:   ‑ ‑ ‑ but I assume that by consent the matter will stand over pending the determination by the High Court. 

HIS HONOUR:   I do not think Justice Barrett is going to proceed in the light of these orders, even if Mr Gageler is sooling him on.

MR ELLICOTT:   It came before Mr Justice Campbell and he showed a little bit of fight and we ‑ ‑ ‑

MR BENNETT:   ……on the construction issue ‑ ‑ ‑

MR ELLICOTT:   What construction issue?  I mean, there has to be a construction before you can determine validity.

HIS HONOUR:   Before you can work out whether it is valid.

MR ELLICOTT:   I am seeing it as all wrapped up.

HIS HONOUR:   Well, should we amend (b) to say “the construction and validity of”?  I will amend order 1(b) so it reads:

The construction and validity of the transitional provisions of Chapter 10 of the Corporations Act 2001 (Cth).

If there is any difficulty in the Supreme Court, you can come back under liberty to apply.  I am grateful to counsel and we will now adjourn.

AT 9.52 AM THE MATTERS WERE CONCLUDED