Forge & Ors v Australian Securities and Investments Commission & Ors

[2005] HCATrans 313

[2005] HCATrans 313

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Canberra  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 INVESTMENTS COMMISSION

First Defendant

THE STATE OF NEW SOUTH WALES

Second Defendant

THE COMMONWEALTH OF AUSTRALIA

Third Defendant

Summons

GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 6 MAY 2005, AT 9.49 AM

Copyright in the High Court of Australia

__________________

MR R.J. ELLICOTT, QC:   Your Honour, I appear with MR W.J. WILCHER for the plaintiff applicant on the summons.  (instructed by Ken Cush & Associates) 

MR S.J. GAGELER, SC:   If the Court pleases, I appear with MR M. PEARCE for the first defendant.  (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 and for the Attorney‑General of New South Wales.  (instructed by Crown Solicitor for New South Wales) 

MR D.M.J. BENNETT, QC, Solicitor‑General for the Commonwealth:   If the Court pleases, I appear for the third defendant.  (instructed by Australian Government Solicitor) 

HIS HONOUR:   Yes, Mr Ellicott. 

MR ELLICOTT:   Your Honour, section 78B notices have been given and my instructions are that all have replied and say they do not want to intervene at this stage.  Your Honour will note that this is a summons for directions and the written outline of submissions has been filed in accordance with the Rules.  The further steps sought are that there be a special case which states questions for the opinion of the Full Court. 

HIS HONOUR:   There is no possibility of demurring, is there? Pleading it out and demurring? There are one or two things that worry me a little bit, Mr Ellicott. If we go to paragraphs 9 and 10 of the statement of claim, the proposition that section 37 on its face suggests an acting judge can be appointed for a time not exceeding 12 months be specified in the Commission – that is section 37 of the Supreme Court Act. That is at odds with the tenure otherwise given in the Supreme Court by the New South Wales constitution, I think, these days. I think it is Part IX of the New South Wales constitution, is it not, Mr Solicitor? The Act of Settlement type tenure that they had. Is that the comparator that is complained of?

MR ELLICOTT:   No, your Honour ‑ ‑ ‑

HIS HONOUR:   I mean, if they had that tenure, you would not complain. 

MR ELLICOTT:   That is a point that has been present to my mind, but I do not think it has actually been ‑ ‑ ‑

HIS HONOUR:   I mean, you do not complain of that tenure, obviously. 

MR ELLICOTT:   No. 

HIS HONOUR:   And is the complaint one of age in any way?  The constitution suggests ‑ ‑ ‑

MR ELLICOTT:   There is the question of whether the relevant acting judge, being over the age of 70, was not therefore a person who could exercise federal jurisdiction.  That depends on a comparison with Chapter III and the requirements of Chapter III. 

HIS HONOUR:   That stipulates a maximum of 70, but there can be, by statute, lower ages in other federal courts. 

MR ELLICOTT:   Yes, the Family Court, in fact, is 65, I think, and still is. 

HIS HONOUR:   I think so. 

MR ELLICOTT:   That is how it was originally set up.  But the point is there, that it does not conform with Chapter III and that that is a cut‑off point, so far as age is concerned. 

HIS HONOUR:   Yes. 

MR ELLICOTT:   Then there are issues or questions that arise as to whether one appointment is itself invalid, apart from age, and then there is the question of whether looking at a court and the number who are appointed ‑ ‑ ‑

HIS HONOUR:   That is what I was wondering. 

MR ELLICOTT:    ‑ ‑ ‑ one reaches a point of invalidity, and how does one determine that point?  That arises as well. 

HIS HONOUR:   That could be an evidentiary question, I suppose. 

MR ELLICOTT:   That is why that schedule was put in. 

HIS HONOUR:   There may be some significance attached, by some people looking at this, to a criterion which is not in section 37, necessarily, namely, it may be one thing to have retired judges, it may be another thing to have persons who otherwise have held no judicial office at any stage in their career. 

MR ELLICOTT:   That is obviously a matter for argument, your Honour.  I am not surprised that that point might be raised as trying to find some way in which to find a cut‑off point. 

HIS HONOUR:   Yes, all right. 

MR ELLICOTT:   The numbers that have been appointed at particular times, even of acting – even of retired Supreme Court and Federal Court judges, is quite large, compared with the totality of the court.  There are those issues the Full Court would want to, no doubt, consider. 

HIS HONOUR:   Yes.  That may make a ‑ ‑ ‑

MR ELLICOTT:   There may be a difference between the question whether section 37 is invalid, because it has no limits.  Not only has it no limits, but I think it is subsection (3) or (3)(a) which provides that they may exercise what I would understand to be judicial power, notwithstanding that their commission has terminated.  And it is suggested, unless I have read the factual situation wrongly, in the submissions to ASIC that your Honour has, I understand they have in mind that the matter might go back before Justice Foster, as he then was, as an acting justice, notwithstanding that his commission expired a couple of years ago, when he turned 75. 

HIS HONOUR:   Yes. 

MR ELLICOTT:   So there are a number of issues hanging around, but section 37 itself may well be invalid, but there may be a point within its scope where the Court might want to draw a line.  I am trying to be fairly balanced in what I am putting, your Honour. 

HIS HONOUR:   I am sure you are. 

MR ELLICOTT:   But there is no point in going to the Full Court unless you – one has to understand the scope of the argument that one might have to meet.  I think our approach was that the question of law – there may be several questions of law, but, on this particular aspect, those could be stated and any factual matters, such as the history of the court in New South Wales and the appointments that have been made, would – I mean, what relevance does it have – I am just asking a question – not for your Honour to answer – that up to a point in, I think, 1998 and 1999 when the Bar Association objected vociferously, barristers and perhaps – I do not recall a solicitor being appointed to the Supreme Court as an acting judge, but barristers were appointed up to that point of time.  Now, how far does one need to go back in the history to properly inform the High Court as to the nature of the court, which has a tradition of acting justices?  There are issues, obviously, relating to other courts in New South Wales, but that only, perhaps, underpins the urgency of the matter, rather than being directly relevant. 

HIS HONOUR:   Well, there is recent legislation in Victoria, too, of a quite extensive kind. 

MR ELLICOTT:   Yes, and there is a great debate in Victoria. 

HIS HONOUR:   Very well.  Now, what is the current position on this proceeding on penalty? 

MR ELLICOTT:   Your Honour, that matter is currently before the Equity Division of the Supreme Court and the list judge, Justice Barrett, fixed a stay application for hearing for 23 May.  We took out a stay application there, that it be stayed pending determination of these proceedings in the High Court.  That would come back for hearing before him on 23 May.  We were hoping that by then there would be some clarity as to what was to happen here, and the court would act accordingly.  We would be asking for a stay here of those proceedings.  Just looking at – assuming we were not here, and the matter had proceeded in the Supreme Court, we would have raised these issues on penalty, saying, obviously ‑ ‑ ‑

HIS HONOUR:   They were not raised before Acting Justice Foster in the first round, were they?  Namely, the competence of his commission. 

MR ELLICOTT:   Yes, that was not raised, and it was not raised in the Court of Appeal.  But the proceeding itself is still alive, obviously, and it leads to this most critical point, that is to say, the imposition of penalties.  We would submit that those issues are alive and well. 

HIS HONOUR:   One possibility would be to remove them here, to this Court. 

MR ELLICOTT:   Yes, I was going to refer to the Court’s power to do that.  As far as the other point is concerned, your Honour, there is an issue, that is, the Corporations Law point ‑ ‑ ‑

HIS HONOUR:   There is, yes. 

MR ELLICOTT:    ‑ ‑ ‑ as to whether it is a matter. 

HIS HONOUR:   But it is said that that has been run to death already in this Court. 

MR ELLICOTT:   Yes.  It has been said that it has not actually been raised.  I am not sure that the point has been understood – and that is no criticism of anybody who has not been able to understand it, your Honour, but in relation to “matter” there is a clear distinction, obviously, in the authorities between proceedings and the right or obligation. 

HIS HONOUR:   If you are right about that, this point would still be alive on the penalty, would it not, before the Supreme Court? 

MR ELLICOTT:   Yes. 

HIS HONOUR:   So perhaps all the more reason to remove what is in the Supreme Court here. 

MR ELLICOTT:   Yes. 

HIS HONOUR:   And that then would obviate any collateral problems that arise from the Catholic Bishops’ Case. 

MR ELLICOTT:   Yes. 

HIS HONOUR:   I think that should be considered.  I will ask your colleagues about that. 

MR ELLICOTT:   Yes, your Honour.  That was one submission we were going to put in answer to their submissions, that the matter should be removed or partly removed, whichever way your Honour wishes to approach it. 

HIS HONOUR:   Yes, thank you, Mr Ellicott.  Yes, Mr Gageler. 

MR GAGELER:   Your Honour, we, of course, are cognisant of the importance of the acting judges point, and we would not seek to prevent it being dealt with by the Court in whatever the appropriate form.  We do have a difficulty, as your Honour has seen, the Corporations Act point.  Underlying paragraph 11 of the statement of claim where the second sentence says, in summary, “this is the argument”, is a great deal of tedium, and that tedium has been gone through at great length in a number of intermediate appellate courts and this Court will be looking at the special leave application in Frawley on 27 May where the “matter” point is raised.  Now, your Honour, I happen to be appearing for the respondent in that, and I am very clear – at least, I have made very clear in the submissions that have been filed in that matter – that there is nothing in the “matter” point.  So, your Honour, in our respectful submission, we would not be racing to remove proceedings from a lower court, in circumstances where the issue would not demand the attention of this Court on the special leave test. 

We also have a difficulty with why this point needs to be raised.  It is really quite independent of the first point and, one would have thought, inconsistent with it.  The Kable point really says, one would think, “This is a matter in federal jurisdiction and you cannot have an acting judge in federal jurisdiction”, and this point comes along and says, “Further, this does not involve an exercise of the judicial power of the Commonwealth”.  It is odd.  At the very least, it is in federal jurisdiction because my client, ASIC, is a party, and that is enough. 

HIS HONOUR:   Well, it is in federal jurisdiction anyway, because there is a debate about the Constitution, the validity of the legislation.

MR GAGELER:   I am sorry, when I say “this matter”, obviously, this matter is, but the proceeding before Justice Foster.  Your Honour, that is our position. 

HIS HONOUR:   Yes.  Mr Solicitor for New South Wales. 

MR SEXTON:   Your Honour, we do not – we assume, of course, that the question concerning acting judges, with which we are particularly concerned, will be determined by this Court when the matter proceeds.  We are slightly concerned that my learned friend, Mr Ellicott, seems to be

proposing some kind of Royal Commission into judicial appointments.  There is a specific appointment here that we would assume the case will focus on, and otherwise we do not have any submissions to make in relation to the corporate question that has been raised as well. 

HIS HONOUR:   Yes.  Mr Solicitor for the Commonwealth. 

MR BENNETT:   Your Honour, we support the other party’s submissions that the matter should not be remitted.  The question whether ‑ ‑ ‑

HIS HONOUR:   Should not be removed. 

MR BENNETT:   Removed.  The question whether acting judges can validly hear matters is of considerable practical significance and should be determined by this Court as soon as possible.  We agree that the questions of law should be stated for the Full Court and we agree with the plaintiffs’ timetable.  We will support the foreshadowed application by ASIC in relation to the issue estoppel aspect, although that may become accidentally ‑ ‑ ‑

HIS HONOUR:   That is why I am worried about taking up our time in pursuing a rabbit which may not necessarily have to run, if the process is removed. 

MR BENNETT:   If it is removed, that becomes academic. 

HIS HONOUR:   Exactly. 

MR BENNETT:   We also note there is a question whether the Commonwealth should have been joined as a party at all.  We do not take any point about that, because the Attorney would have intervened in any event. 

HIS HONOUR:   And then he becomes a party. 

MR BENNETT:   Yes. 

HIS HONOUR:   That is the Attorney, not the Commonwealth. 

MR BENNETT:   Yes. 

HIS HONOUR:   But it may be six of one and half a dozen of the other. 

MR BENNETT:   Well…..

HIS HONOUR:   I understand what you are saying, Mr Solicitor. 

MR BENNETT:   Your Honour, those are the matters. 

HIS HONOUR:   Thank you.  What date did you say was the special leave date, Mr Gageler? 

MR GAGELER:   27 May, your Honour. 

HIS HONOUR:   27 May. 

MR GAGELER:   That is in the Frawley matter. 

HIS HONOUR:   That is in Sydney.  What is the name of the application? 

MR GAGELER:   Can I hand your Honour a copy of our summary of argument.  It has the ‑ ‑ ‑

HIS HONOUR:   Have you seen this, Mr Ellicott?  The matter is Frawley v The Queen, S108 of 2005.  Do you know who your opponent is, Mr Gageler? 

MR GAGELER:   I assume it is Mr Perram.  Mr Perram argued it in the Court of Criminal Appeal. 

HIS HONOUR:   Right.  

MR GAGELER:   The “matter” point is squarely in play.  It is dealt with in paragraph 10(a). 

HIS HONOUR:   It is the New South Wales Court of Criminal Appeal being spoken of, is it? 

MR GAGELER:   Yes, your Honour.  It was an ex tempore decision of the Chief Justice and the President and I forget who was the third member of the court. 

HIS HONOUR:   Yes, thank you.  And what was the date of your stay application before Justice Barrett? 

MR ELLICOTT:   20 May. 

HIS HONOUR:   20 May? 

MR ELLICOTT:   Yes, your Honour. 

HIS HONOUR:   What I propose to do is to stand over the matter before me today, and give you the opportunity, if you wish to take it, Mr Ellicott, to seek removal.  Justice Barrett can be informed, one way or the other, of your decision on that on the 20^th and then it will come back here before me, this matter, with any removal application, if one is to be made, on a day in the week of 30 May in Sydney.  Have you got your diary?  I was thinking Tuesday, the 31^st at 9.30.  I will reserve costs of today.  Tuesday, 31 May at 9.30. 

MR ELLICOTT:   Your Honour, so far as Frawley’s Case is concerned, can I just say this, because something may happen in the meantime.  My reading, for what it is worth ‑ ‑ ‑

HIS HONOUR:   Well, I will expect Mr Gageler to tell the panel, if I am not on it, of this pending matter. 

MR ELLICOTT:   Frawley does not – I cannot find any reference in Frawley to an argument that is related to whether it is a “matter” as such.  That constitutional point does not emerge directly.  It might be thought to arise indirectly, because there is a reference by the Chief Justice to Macks’ Case, and Humby’s Case ‑ ‑ ‑

HIS HONOUR:   Yes. 

MR ELLICOTT:   They, of course, do not answer the issue that we are seeking to raise here.  In other words, I am just really saying that this case, that is, the case before your Honour now – that issue is not necessarily determined if the High Court in its wisdom decided not to grant special leave in Frawley. 

HIS HONOUR:   Yes, I understand.  Now, in these matters that you referred to in your outline, in Frawley, in the other State courts ‑ ‑ ‑

MR GAGELER:   There is a case of Corbett, your Honour, which was in the Queensland Supreme Court. 

HIS HONOUR:   Did the law officers appear in those cases? 

MR GAGELER:   Law officers? 

HIS HONOUR:   Yes, of the State and Commonwealth. 

MR GAGELER:   I am not sure.  It was the Crown.  I do not know whether it was the DPP or ‑ ‑ ‑

HIS HONOUR:   I assume 78B notices were given in all these cases. 

MR GAGELER:   Yes, of course.  The other one is Kennedy, which was a Full Federal Court decision just late last year.  Yes, 78B notices were given.  In Corbett, your Honour, there was an unsuccessful application for special leave to appeal. 

HIS HONOUR:   Yes.  Well, then, I will stand over today’s proceedings to Tuesday, 31 May at 9.30 before me in Sydney, reserve costs of today and any removal application, if one is to be made, should be made returnable on that date. 

Thank you, gentlemen.  The Court will now adjourn. 

AT 10.13 AM THE MATTER WAS CONCLUDED