Forge & Ors v Australian Securities and Investments Commission & Ors; Australian Securities and Investments Commission v Forge & Ors
[2006] HCATrans 22
[2006] HCATrans 022
IN THE HIGH COURT OF AUSTRALIA
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 INVESTMENTS COMMISSION
First Defendant
THE STATE OF NEW SOUTH WALES
Second Defendant
THE COMMONWEALTH OF AUSTRALIA
Third Defendant
Registry No C12 of 2005
B e t w e e n -
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Plaintiff
and
WILLIAM ARTHUR FORGE
First Defendant
JOZSEF ENDRESZ
Second Defendant
DAWN MAY ENDRESZ
Third Defendant
ALLAN PAUL ENDRESZ
Fourth Defendant
KAMANGA HOLDINGS PTY LIMITED
Fifth Defendant
BISOYA PTY LIMITED
Sixth Defendant
Office of the Registry
Sydney No S301 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 INVESTMENTS COMMISSION
First Respondent
KAMANGA HOLDINGS PTY LTD
Second Respondent
GLEESON CJ
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
HEYDON J
CRENNAN J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON TUESDAY, 7 FEBRUARY 2006, AT 10.19 AM
Copyright in the High Court of Australia
__________________
MR R.J. ELLICOTT, QC: May it please the Court, I appear with MR J.L. GLISSAN, QC, MR S.M. WHYBROW and MR W.J. WILCHER, for the plaintiffs and the applicants. (instructed by Ken Cush & Associates)
MR S.J. GAGELER, SC: If the Court pleases, I appear with MR M.R. PEARCE, SC for the Australian Securities and Investments Commission. It is the first defendant in No C7, the plaintiff in No C12 and the respondent in No S301. (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 with my learned friend, MR J.G. RENWICK, for the second defendant, the State of New South Wales, in the matter in which the State is a party, and for the Attorney‑General for New South Wales who intervenes in the other proceedings. (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, in matter No C7 I appear with my learned friend, MS N.L. SHARP, for the third defendant. In each of the other matters MS N.L. SHARP and I appear for the Attorney-General of the Commonwealth intervening as of right. In the special leave application, to the extent, if at all, which is disputed, that we do not appear as of right, we would seek leave to intervene, but we submit that is unnecessary. (instructed by Australian Government Solicitor)
MR W.C.R. BALE, QC, Solicitor‑General of the State of Tasmania: May it please the Court, I appear with my learned friend, MS S.K. KAY, for the Attorney-General of Tasmania and with my learned friend, MS S.L. BROWNHILL, for the Attorney-General of the Northern Territory, intervening in No C7 in the interests of the defendants and for like interests in the related proceedings. (instructed by Solicitor‑General of Tasmania and the Solicitor for the Northern Territory)
MR R.M. MITCHELL: May it please the Court, with my learned leader, MR R.J. MEADOWS, QC, Solicitor‑General for the State of Western Australia, I appear for the Attorney-General for Western Australia, intervening in support of the Australian Securities and Investments Commission in all matters and to the extent that we would require leave to intervene in S301 of 2005, we would respectfully seek that leave. (instructed by State Solicitor’s Office (Western Australia))
MR C.J. KOURAKIS, QC, Solicitor‑General for the State of South Australia: If the Court pleases, I appear with my learned friends, MR M.J. WAIT and MR S.A. McDONALD, for the Attorney-General for South Australia, intervening in support of the defendant in matter C7 of 2005. (instructed by Crown Solicitor’s Office South Australia)
MS P.M. TATE, SC, Solicitor‑General for the State of Victoria: May it please the Court, I appear with my learned friends, MR S.G.E. McLEISH, MS K.L. WALKER and MS R.J. ORR, for the Attorney-General for the State of Victoria, intervening as of right in proceedings C7 and C12 of 2005 and intervening pursuant to leave granted by the Honourable Justice Gummow on 7 October 2005 in proceeding S301 of 2005. (instructed by Victorian Government Solicitor)
MR W. SOFRONOFF, QC, Solicitor‑General of the State of Queensland: May it please the Court, I appear with my learned friend, MR R.W. CAMPBELL, intervening on behalf of the Attorney-General of Queensland in proceeding C7 of 2005. (instructed by Crown Solicitor for the State of Queensland)
GLEESON CJ: Yes, Mr Ellicott.
MR ELLICOTT: Now, whether it will evoke any sympathy, your Honours, but they all seem to be against us, but, your Honours, these matters come before the Court in a variety of ways. The Court is sitting in its original jurisdiction, but it is on the cusp of the appellate with an application for special leave. The matter came originally to this Court by virtue of proceeding which was taken out by the plaintiffs in this Court. That led to hearings before Justice Gummow which in turn led to questions being a part of the proceedings in the Supreme Court being removed under section 40 and then the questions were stated. We were given leave to make an application for special leave from the decision of the Court of Appeal of New South Wales and all those matters are now referred to. There are demurrers, there are questions stated and we have the labouring…..in relation to an application for special leave. I had assumed, but your Honours will no doubt correct me, that your Honours will hear argument on the questions and deal with the question as to special leave after that or in the light of that argument.
GLEESON CJ: Yes, that is a reasonable assumption.
KIRBY J: Mr Ellicott, have your researchers found any case in this Court where the principle in Kable has been applied to the success of the proposition except in Kable?
MR ELLICOTT: In this Court, no, your Honour.
KIRBY J: I think there is one State ‑ ‑ ‑
MR ELLICOTT: There is one in Queensland.
KIRBY J: ‑ ‑ ‑ court where it has been applied, so it is a dog that has barked twice, not once.
MR ELLICOTT: Well, it is really barking in this case, your Honour, and the plaintiffs’ arguments depend in part on that, but the principle in Kable’s Case has been considered so many times by this Court since it was stated that although I will refer to it, I am not proposing to deal with it at great length because it seems to me I could start off with the knowledge that your Honours were fully aware of it and had been referred to it in many cases since, latterly, I think in Fardon’s Case.
Your Honours, this summary relates to the first question, namely relating to acting judges. In dealing with this, the Court is really at the interface between the judiciary and the Executive. It is therefore of extreme importance and in a sense it is really not about whether acting judges are people we know, people that have been judges of other courts, or barristers of high repute, or solicitors who may have briefed us. It is not really about that. It is not about the question whether we think these people are likely to be corrupted, for instance. It is not about that at all. It is about whether or not the judicial power of the Commonwealth ought to be protected again, whether the ramparts need to be manned, whether intrusions from the Executive can go this far.
It has been suggested, and I will take your Honours to the various comments that have been made from time to time just to summarise them, traditionally that acting judges are in a sense a threat to the independence of the judicial power and of the courts. It has also been clearly stated that Chapter III feeds into the State judicial system. The notion that there is an integrated court system in Australia is a reflection of that view.
Therefore, we come to the Court and really our basic proposition is this. It can be fairly shortly stated. That is that Chapter III of the Constitution feeds into the notion of “court” throughout this integrated court system. In its proper interpretation Chapter III has no place for acting judges. Chapter III when it talks about “courts” is talking about courts that are manned by a full‑time permanent judiciary whose tenure is fully secured and whose remuneration is secured. The security of that tenure and remuneration is the basic bulwark against Executive intrusion.
There are ways in which the Executive does have a role in the court system, and some of us may think that at times that is exercised in a way that does not take full appreciation of the needs of the courts. I refer in particular of course to budgets, the financial considerations. The Executive obviously would be very interested in acting judges because they are relatively cheap. You do not have to give them chambers, they can be paid a daily rate, they do not have the perquisites of computers or cars or whatever they may be that full‑time judges justly have. Therefore, they are relatively cheap in the scales of justice and the administration of justice. For that reason the Executive is likely to see them as a way of reducing the government expenditure.
Now, in some respects the courts cannot do much about the financing aspects of the courts because they can only make submissions which go to the government and then to the Parliament and, therefore, the Executive from time to time and the Parliament will make decisions which impede the administration of justice and access to the courts. One example has been the imposition of fees on people who come to the courts. That is an intrusion on the freedom of access to the courts. People have to pay large amounts before they can appear before some judges in some courts and, indeed, most courts. These intrusions, as they occur, tended to be accepted, although one does not think in principle that they are correct, but there is probably no constitutional principle upon which one can resist them. But this case raises ‑ ‑ ‑
KIRBY J: Well, I am not sure about that. There have been cases where it has been held that court fees amount to a taxation or that they otherwise offend the Constitution. And we had the case in the APLA litigation where an argument was certainly mounted that the regulation in New South Wales was an effective prohibition on people’s access to the courts. That was argued strongly.
MR ELLICOTT: Yes.
KIRBY J: It was not accepted by the majority of the Court, but it was certainly accepted by me.
MR ELLICOTT: But even where they are not seen to be taxes, but are user pay requirements, they nevertheless are an intrusion into access to the courts and, therefore, the Executive has in relation to that a power which they exercise and which has not been resisted by the courts. Litigants may raise the issues, but they have not been accepted.
In the ultimate, this case raises something that goes to the heart of justice and that is the independence and impartiality of the court system. As I was saying earlier, to come to our submissions, our submission is basically quite simple and that is that, just as in, for instance, Harris v Caladine it was held that the notion of a “court” is common to both the federal and the State system and it would be absurd to deal with it otherwise, we are submitting that a court in the context of Chapter III is one that is made up of a full‑time permanent judiciary with security of tenure and security of remuneration.
GLEESON CJ: For a large part of the 20th century a lot of federal jurisdiction was exercised by State magistrates who for a large part of the 20th century were State public servants. How did Chapter III feed into that?
MR ELLICOTT: Your Honour, this case is about the Supreme Courts of the States and they have a special position. The principle that we are putting will apply to all courts. It has been said for instance – I am answering your Honour’s question to me – I think Justice Gibbs said it in Kotsis, that courts can be made up of laymen.
GLEESON CJ: They were. A lot of magistrates in State courts throughout a lot of the 20th century were not qualified to practice as lawyers.
MR ELLICOTT: Yes, I am not saying he was wrong – right, but those laymen ‑ ‑ ‑
KIRBY J: You are not saying it was right either. You are not saying it was right. I mean, that was before the Kable enlightenment.
MR ELLICOTT: Well, it may be, but on the other hand one may have to accept the proposition, and I have to deal with it in any event ‑ your Honours may disagree with my concession and that is good for my clients - but, dealing with the question of laymen we would say that if they constitute what is called a court, well, they must be appointed in a way that is consistent with Chapter III and they must have security of tenure and remuneration and those magistrates likewise, we would say, need to do that.
Now, it is true that through the period of time that your Honour the Chief Justice refers to, those magistrates were so appointed but in the fullness of time it was recognised throughout. I think it may have started in the Australian Capital Territory with the appointment of Mr Clarrie Hermes, but if I am wrong I apologise, but I think it did, and he was appointed on a tenure and not out of the public service, from recollection, but in any event there in the fullness of time, for instance in New South Wales there is now a local court system, the magistracy on that basis, as your Honour put to me, has been abolished and there is something which adds up to security of remuneration and security of tenure.
So, in our submission, it is not an answer to put the situation as necessarily applying in the fullness of time to public servants, because if the consequence of our submission is that they should have security and that public service appointment is not good enough then so be it, but I only point out that the States are accommodating themselves to that proposition. They have not gotten there by dint of any statement by this Court but by a general realisation that fundamental to the Australian judiciary is that the courts be independent of the Executive to the lowest level as well as the highest level.
KIRBY J: Is it only of the Executive? Is it not of all external sources of power?
MR ELLICOTT: The proposition goes beyond the Executive. It goes to the Parliament obviously and if in some way some person or authority had some sway over the judiciary, that would be wrong. In the case of acting judges, sometimes the problem arises – I think this happened but I am not mentioning names – but a barrister who was often appearing regularly for clients who were defendants in motor accident cases had a row of briefs on his table when he was an acting judge. That is, when he became an acting judge. In the course of being an acting judge he happened to find from time to time for the plaintiffs. When he came back, the briefs had disappeared. Now, that is an instance of where you can get some outside force operating.
We talk in terms of the Executive because in the long run and in its origin it was the Executive that brought about the Act of Settlement and the Act of Settlement answered the problem by demanding security of tenure and security of remuneration. I do not think I have any need to refer this Court to the history since the Act of Settlement except to say this, that in the Supreme Courts of the colonies there was what one might have anticipated – hoped to be indeed under the Act of Settlement – security of tenure and security of remuneration.
There was a peculiar provision which said that by an address to the Parliament judges could be removed and there was a real issue for some time as to whether or not that enabled the Parliaments to step in and just get rid of judges, which seemed to be quite to the contrary of the very principles that had been fought over in relation to the Act of Settlement. That issue seems to have been answered by parliamentary practice and also the notion that ultimately it was the Crown who had given the commission and therefore, the Crown being addressed by the Parliament, it was the Crown that had to decide whether or not the particular person should be dismissed.
So that particular legislative provision which was in 1819, Victoria Chapter 54, which was the Constitution of New South Wales, it was there but it was read in a way in cases that did occur – Mr Boothby, I think, not necessarily under that provision, but I think that was South Australia. Whenever it was referred to, there seems to have been an adherence to the requirement that some form of misconduct had to be proven before that address could be effected.
In relation to our major submission, we are submitting that Chapter III of its essence is reflected into the court system. That is to say that the courts of the States and, in particular, if one has to select them out, certainly the Supreme Courts – but we would not want to select them out – of the States should be constituted in substance – and this is the important thing – by judges who can be described as being a permanent full‑time judiciary whose remuneration and whose tenure are secured.
GLEESON CJ: It may be important for us to know whether the proposition is limited to Supreme Courts or whether it, as you say, feeds into the entire court system, because the entire court system capable of exercising federal jurisdiction might, in terms of its practical day‑to‑day contact with members of the community, consist more of judicial officers at the level of magistrate than judicial officers at the level of Supreme Court judge, and in between, of course, you have the District Court.
MR ELLICOTT: Yes. Justice one might say should not be cheapened, nor should its quality be different throughout the system and an abiding quality is judicial independence. For most people, as your Honour might suggest, judicial independence is just as important of a magistrate or a Local Court judge, or whatever they are called, as it is of the Supreme Court ‑ ‑ ‑
KIRBY J: But the Chief Justice’s question was picking up your point that certainly in the Supreme Court. Now, the question is, do you make the submission limiting your proposition to the Supreme Court and, if so, on what textual foundation in the Constitution, or do you say it permeates the entire integrated judicature of the Commonwealth.
MR ELLICOTT: Your Honour, in Chapter III the Supreme Courts, although they are not mentioned, as is pointed out, in section 77(ii), they are mentioned elsewhere in section 73 and, therefore, they have a special status, in our submission, and you can mount an argument that they should be certainly required to have the same quality of security as Chapter III courts. By Chapter III courts I mean Federal Courts.
HAYNE J: Do you say that the other courts mentioned in section 71 must meet the characteristics you have described of being a court made up of a full‑time judiciary securing tenure and remuneration?
MR ELLICOTT: Yes.
HAYNE J: Do you say that the judges whose number for the exercise of federal jurisdiction may be prescribed under section 79 must meet the characteristics you have described?
MR ELLICOTT: Yes, your Honour, but if I have to, if I am driven back ‑ ‑ ‑
CALLINAN J: Mr Ellicott, in some places, certainly in Queensland, I know there are all sorts of tribunals which are effectively exercising judicial power. There is a building tribunal, for example, that resolves disputes between builders and owners. That is clearly judicial power. It is conceivable that the Commonwealth might be a party, for example, in one of those cases in the case of federal jurisdiction. What do you say about those tribunals?
MR ELLICOTT: Your Honour, the first step is to distinguish between a judicial power – not just the need to act judicially, but some judicial power, as I think was pointed out in Davison’s Case and other cases, can be exercised by administrative tribunals, but it is not the judicial power of the Commonwealth or the judicial power in the ordinary sense. There are many tribunals in New South Wales that make decisions between landlords and tenants and, no doubt, between builders and owners and they have to act judicially. If that power was vested, that power could equally be vested in the court, but they are not exercising the judicial power that I am referring to.
CALLINAN J: Why not? They are defining rights conclusively. They are making enforceable decisions.
MR ELLICOTT: Yes, they are, but I think it goes back to Shell v The Commissioner of Taxation in the Privy Council in the early 30s or late 20s when it was held that the boards of review were validly constituted. That was the result of that but those boards of review certainly made decisions and they affected the rights of the parties, subject to review, but this Court recognised that they were not exercising the judicial power of the Commonwealth because they treated appeals that came to this Court as in the original jurisdiction and they dealt with them on that basis.
CALLINAN J: But not very - if I might say so, Mr Ellicott, not always entirely convincingly. There is some consideration of that in that case that we had from Nauru, recently.
KIRBY J: Ruhani.
CALLINAN J: Ruhani. There is a discussion of this Court’s calling matters which rather look like appeals as exercises of original jurisdiction.
MR ELLICOTT: Yes. Your Honour, that, we would submit, is the traditional approach of this Court to the issue and I think it stems back to that case but maybe beyond it, but it is, of necessity, necessary to distinguish between the exercise of a power which vested in the tribunal is a power to act requiring that the tribunal act judicially even though it makes those decisions which are, in a sense, enforceable, and the judicial power of the Commonwealth which we are concerned with in this case.
We are saying that this being a case which was exercising the judicial power being in federal jurisdiction, we are submitting that so far as the exercise of that jurisdiction is concerned by courts in the integrated court system that this Court has held to exist, then the relevant judiciary should be made up of full‑time, permanent people, whether they are called judges or whatever they are called. If it is truly a court as defined by Chapter III then it has to have that quality because there is no other way of giving to the courts the independence. The emphasis has to be on security of tenure and security of remuneration.
GLEESON CJ: Could the State Parliaments, with any necessary constitutional amendment, legislate to provide for popular election of judges?
MR ELLICOTT: No.
GLEESON CJ: Why not?
MR ELLICOTT: Your Honour, it would depend. If the election was to choose those who would become judges then provided they had security of remuneration and security of tenure they could so provide, but simply to have a system where judges come and go, depending on the whim of the electorate, every three years or six years or whatever it may be, we would submit would be outside Chapter III. The very notion that we have adopted is one that is present in this very Court. That is it. That is what it is.
GLEESON CJ: One of the reasons I asked the question is this, Mr Ellicott, and it relates to your basic proposition, does Chapter III limit the capacity of the federal Parliament to confer federal jurisdiction upon certain bodies, if I can use that neutral expression, or does Chapter III by, as you say, feeding into the notion of a court limit the capacity of States to create courts and tribunals?
MR ELLICOTT: It does not limit the capacity of the States to create what they choose to call “courts” or “tribunals” but it does limit, I suppose, the application of the word “court” or “courts” in Chapter III in which federal jurisdiction is invested to bodies which answer the description of courts in Chapter III.
GLEESON CJ: Yes, well, the investing of federal jurisdiction is by an act of the Federal Parliament.
MR ELLICOTT: Yes.
GLEESON CJ: It may be that if the States provided for a system of election of judges, or election of some judges of some courts, Federal Parliament could not invest those bodies with federal jurisdiction but that is a different proposition, is it not, from saying Chapter III prevents the States from providing for the election of some judges?
MR ELLICOTT: Yes.
KIRBY J: Is not the proposition in Kable that if they truly answer to the constitutional description of a court of the State then they must be proper receptacles for federal jurisdiction?
MR ELLICOTT: Well, it may be a proposition which starts off with the notion of “court” in Chapter III because after all Kable is really reflecting into the State’s system a notion which those courts in which the federal jurisdiction is vested, if they are to be properly vested, must satisfy. Now, so far as the Supreme Courts are concerned then there is no difficulty in the notion. It is only when the other lower areas of the judicial system are looked at that these issues arise. There is no suggestion, for instance, that courts in Australia will be manned by elected judges. It is a matter that no doubt has been entertained but it has never taken up, but we would submit that so far as Chapter III is concerned it feeds into those courts.
HAYNE J: But is a necessary first step in your argument the step of reading “courts” in the expression “other courts” in section 71 and “judges” in section 79, in the fashion you have described?
MR ELLICOTT: Yes, your Honour. There was a question which arose in a case called Veta and Cathay Pacific which came before Justice McHugh recently, and in that case the question arose whether the Industrial Commission of New South Wales was a court? Now, his Honour Justice Brennan had doubted that in an earlier case but his Honour held, contrary to my submissions, that it was a court and therefore it could be vested with federal jurisdiction in the sense that the matter in question could be sent back to the Industrial Commission of New South Wales. In other words, it raised the issue which has to be asked, “Is this a court?” and his Honour said it was and so be it.
KIRBY J: What case was that?
MR ELLICOTT: Veta. It just came to mind. It is 2004 before Justice McHugh and there were certain constitutional issues in the case and we were seeking to have them dealt with by this Court. His Honour sent them back to the Industrial Commission from whence the proceeding originally came but, in any event, that is an illustration. There were earlier cases which dealt with the question of court but in order to – and that related to “court” under the Judiciary Act, of course, section 40, but the meaning of “court” there is fed by Chapter III.
So really, if one is starting from the beginning, we say the beginning is in Chapter III. Whatever its tentacles are that stretch out so far as courts are concerned, it certainly embraces the Supreme Courts of each State and there are propositions in Kable’s Case which support the view that the Supreme Courts of the States could not be abolished. I think Justice McHugh said that in Kable’s Case and other Judges. But that stability of system Chapter III accepts and in this sense demands.
In relation to the nature of the court, Justice Gibbs as he then was in Kotsis in a minority judgment said that the court was the organisation, not the body made up of judges. That was the Supreme Court I think of South Australia. The Supreme Court Act there said it was made up of judges and masters, I think, but some other States say that the court is made up of judges, the Chief Justice and so many judges. That distinction is swept aside by the minority judgment in Kotsis and it was ultimately accepted in the Hospital Contribution Fund Case by this Court – that is, the minority judgment – but that was on the basis that “court” meant the organisation.
In Harris v Caladine – and I will take your Honours to it – this Court dealt with the question, as your Honours are no doubt aware, whether or not that applied to the federal Family Court. That is to say, whether the federal jurisdiction could be exercised by registrars who are delegates of the court. A basic proposition in that case – at page 92 Chief Justice Mason and Justice Deane a third of the way down:
True it is that the HCF Case did not go on to decide that the word “court” had a similar meaning in the other sections in Ch III in which the word appears. But it would be somewhat surprising if the word were to bear a different meaning elsewhere in Ch III, particularly in ss 71 and 77(i) and (ii). There are, of course, special reasons for interpreting the word as referring to the institution rather than its members in the context of s 77(iii). Those reasons are identified in the judgments in the HCF Case and in the dissenting judgment of Gibbs J in Kotsis and they are sufficiently encapsulated in the proposition that the Parliament cannot alter the organization or structure of a State court as it exists under State law. Parliament cannot alter that organization or structure, for to do so would interfere with the State’s freedom to constitute and organize its courts as it sees fit.
Now, that proposition, when you analyse it historically, I would submit, is really about the Commonwealth Parliament’s power to do something to alter the Constitution and organisation of State courts, and this Court has said you must take the State courts as you find them. But that is quite a different proposition to the one that we are seeking to mount here and which, we say, is consistent with the Kable Case, and that is that the Constitution demands a certain quality of justice but only one quality of justice throughout this integrated court system. However, as Chief Justice Gibbs pointed out:
one would expect jurisdiction to be vested in a court as an entity rather than in the persons who compose its membership, so that, in the context of s 77(i), as well as s 77(iii), the reference to “court” should also be understood as a reference to the court as an entity. Likewise with the vesting of judicial power in s 71.
And over the page in the middle of page 93:
Now that it has been established by the HCF Case that some part of the federal jurisdiction of a State court may be exercised by a master or registrar in conformity with State legislation, it becomes difficult, if not impossible –
indeed, it would be absurd, we would submit –
to assert that s 71 vests the exercise of judicial power in the judges of the courts specified in the section. It makes little sense either as a matter of logic or policy to require that the power be exercised solely by federal judges to the exclusion of officers of a court when, in the case of invested federal jurisdiction, the power may be exercised by officers of State courts. More importantly, as a matter of construction, it is not permissible to read s 71 as speaking differently in its application to federal and State courts.
Now, my friends rely on this heavily, as I understand their submissions, but they are picking up this proposition about the Commonwealth has to take the State courts as you find them.
GLEESON CJ: Are the registrars who are there being spoken of State public servants?
MR ELLICOTT: No, in Kotsis and HCF the registrars were the masters of the State courts.
GLEESON CJ: Yes, but in State courts there are registrars who perform functions of the kind that are there being talked about.
MR ELLICOTT: Yes, there could be, that is right – the Registrar in Divorce in New South Wales, for example.
GLEESON CJ: Yes, are those registrars State public servants?
MR ELLICOTT: They could be, and the masters were State public servants. Now those masters are called associate judges of recent times in New South Wales. But they might be public servants ‑ ‑ ‑
KIRBY J: I think under the Supreme Court Act they were part of the Supreme Court though, but they were in a special position even before their title was changed.
MR ELLICOTT: Well, the effect of these decisions is that the court is an institution. You look at the institution. Traditionally the institution was made up not only of the judges, but also of the masters and the registrars who assisted the judges with matters which were incidental, in effect, to the administration of justice, but they exercised that as delegates of the court, which was made up of the judges, and provided the judges were able to review the decisions of the registrars and the masters, then obviously the litigants had access to what has been referred to as the independence of the court and the court was always in control because they were the delegates. So it is not a case of the judicial power being vested in other than the court, but for the purposes of the administration. The notion was applied that you must take the State courts as you find them, you must take the institution as you find it.
HAYNE J: But I understand the essence of your argument to be that understanding “court” as an institution, as distinct from members or membership, that is having adopted the minority view in Kotsis in HCF, the institution you identify is one whose judges have the characteristics described and who otherwise are organised in the fashion described by Chief Justice Mason and Justice Deane in Harris v Caladine 172 CLR at the foot of 94 to 95 where the judges of the Court:
effectively control and supervise the exercise of jurisdiction –
et cetera. Their Honours go on to develop that point in the fashion there identified.
MR ELLICOTT: That is right, your Honour.
HAYNE J: But the judges, as I understand your argument, it is that at the core, the judges, in particular the judges who try matters, must have the characteristics described.
MR ELLICOTT: Yes, and the jurisdiction, if it is federal jurisdictions it is vested, then that jurisdiction is exercised by the judges, albeit at the fringes by registrars and masters but who are delegates and who are subject to review by the courts, by the judges who make up the court.
GLEESON CJ: I am not sure about that “fringes”, Mr Ellicott. A lot of work that used to be done by judges is these days done by registrars. There is a constant process of devolution.
MR ELLICOTT: That may be so and there may be some point where this Court may have to step in and say enough is enough. In other words, there must be a point where these masters and registrars cease to be mere delegates of the court and if they do and if they exercise the judicial power of the Commonwealth, in the sense as courts, then they must – not as delegates of the court but as independent judges in the court – then if they do not have the security of tenure, they do not have the security of remuneration – call them what you will. You can call them associate judges, if you like, but if they truly have the characteristic of judges who are permanent, full‑time, et cetera, then they pass muster but if they are still public servants or do not have that security and they are not mere delegates then that is the point where the constitutional prohibition we seek to get out of Chapter III steps in.
GLEESON CJ: I am just concerned with this constitutional prohibition. Is the constitutional prohibition a prohibition on the Federal Parliament prohibiting the Federal Parliament from conferring federal jurisdiction on such people?
MR ELLICOTT: No.
GLEESON CJ: Or is it a prohibition on the State Parliament appointing such people as judges?
MR ELLICOTT: It can only – put it this way. If the federal jurisdiction is vested, as the Judiciary Act does in section 39, by the Parliament of the Commonwealth and it just picks up the word “Court” then that court is the Supreme Court or it is some other court of the State then that court must satisfy the requirements of Chapter III that we have enunciated so that the vesting of the Federal Parliament is fully within Chapter III. In a sense it is a restriction on the Federal Parliament because they can only vest it in courts.
As far as the States are concerned, they can organise what they choose to call courts as they will, but if they set up a body which purports to exercise federal jurisdiction which does not satisfy the requirements of Chapter III, then that is not a court vested with federal jurisdiction. We have here the Supreme Courts which are in a different category because they are a permanent part of the structure and therefore it is a limitation on the States as to what they can do with their Supreme Courts. I am just telling your Honours the obvious, that they are now the final port of call as of right. They are such a significant part of the structure in the administration of justice that they have a special category which is a limitation on what the State Parliaments can do to those courts.
HAYNE J: Do I understand the argument to involve these steps? First, courts in Chapter III in the reference to “other courts” means bodies having the institutional characteristics identified thus far in argument. That would seem to entail a limitation on the power given to the Federal Parliament under sections 71 and 79 on the bodies in whom federal jurisdiction may lawfully be invested, but the next step in your argument seems to be – correct me if I am wrong – that because the Supreme Courts of the States are specifically dealt with in Chapter III to the extent they are, the characteristics of a court identified by you in your argument must be maintained in those bodies and it is beyond State power to pass a law that would deny the essential institutional characteristic of a court, in the case of a Supreme Court, being that trial of actions is conducted only by judges having the characteristics you identify. Does that sufficiently and, more importantly, accurately capture your argument thus far?
MR ELLICOTT: I think so, your Honour. We make a concession. We say it is not essential to the operation of our argument. We do not have to say this. We can stand on that and not recede. We can say no acting judges at all. There are no Acting Judges in this Court. Imagine if you had Acting Justices of this Court. You could argue that the notion is offensive to this Court that there should be Acting Judges. You could argue but the argument would be quickly laid to rest. There is nothing in Chapter III itself that actually stops one from arguing that you could have Acting Justices, but the very notion of acting judges in Federal Courts would be resisted and laid to rest if it has not already been. You can say that traditionally acting judges were appointed prior to 1900 to the Supreme Courts of the colonies. There are many illustrations of that but they were appointed for very special circumstances, and I will take your Honours to those provisions.
The only qualification which we would say could be made to those propositions that Justice Hayne put to me is that in very special circumstances acting judges may be part of the system of courts that Chapter III picked up. That is to say that the notion of the security of tenure and remuneration existed in the colonial Supreme Courts but it was accompanied, no doubt due to the exigencies of the 19th century, by the need to appoint somebody to go up to Moreton Bay, or wherever it may have been, to exercise the functions of the court, or maybe because somebody was ill or somebody had died and somebody had to come out from England in order to occupy the position you could have an acting judge, but those are very special circumstances.
It is possible to argue that it is not only possible, we would say it is consistent with the argument we are putting that you can have an acting judge in a State Supreme Court but only for very, very limited circumstances. In other words, a line has to be drawn in the sand if one is going to entertain acting judges because once they become part of the day‑to‑day administration of justice in a court then they infect the court with that lack of quality of independence which we say Chapter III requires.
Another way of putting our argument is the first way and that is that Chapter III’s authority is stamped on the States’ Supreme Courts and they cannot move away from it, nor should they, and that is not inconsistent with the notion that the Federal Parliament must take the State courts as they find them. I know there are statements in various judgments in this Court going way back which say you must take them as you find them, et cetera, and they go on to indicate how the courts are free to appoint in the manner they see fit, but Kable’s Case enunciated a proposition which is so basic that it is saying something apocryphal, in a way, about the judicial system in this country and it stands as a principle which cannot be departed from, we would submit, because ‑ ‑ ‑
KIRBY J: May I just get that very clear? It was not unusual in say the 1950s for judges to be appointed to the Supreme Court just before the retirement of another judge as an acting judge. I think Justice Moffitt was appointed in this way and then when the person who held the office retired he was then made a permanent judge. I mean, that was not so uncommon. Now, is it your submission that that is constitutionally impermissible? I just want to get your so-called concession clear. It is very rare to get a concession out of you, Mr Ellicott, so I just want to get it very clear.
MR ELLICOTT: Well, your Honour, I am prepared to concede, but logic may defy my concession. That is the logic that your Honours apply in your own minds. It may defy my concession, and that is that in very special circumstances – and this Court should not go, in our submission, beyond that statement – it may be appropriate to have an acting judge, but those special circumstances ‑ ‑ ‑
KIRBY J: Appropriate is not our question. It is permissible, constitutionally permissible which is our question.
MR ELLICOTT: Yes, you can on the basis that Chapter III was drafted in a context where State Supreme Courts had, or the State Executives and Parliaments had power to appoint acting judges, those acting judges were only appointed in very limited circumstances. It can be argued that Chapter III – and it may be one that the Court might accept. I am not wishing it on the Court, I am simply wanting to meet an argument that may be put against me to say that we are necessarily saying that acting judges cannot be appointed. We are not.
GLEESON CJ: Chapter III was also drafted in a context where invariably State magistrates were State public servants.
MR ELLICOTT: Yes, that is so and if the effect of Chapter III, so adopted, was to take the Supreme Court model as the model for the Australian judiciary, the integrated court system, then that would stamp them out. That is the effect of that and we would submit that that is so. But so far as acting judges are concerned, the limit of any acceptance of them is to be found in the notions that were contained in those provisions, which were really emergency provisions. There is no need for the Court to define them in this case except to draw that line in the sand, if the Court took that view.
HAYNE J: But often enough those acting appointments were made, were they not, in the context of legislation that provided for a fixed number of officers and the person concerned was appointed to act in the office of someone who was ill, someone who had retired, or the like? Now, it may be that that is a difference of no moment at all. The legislation with which we are now concerned does not relate the appointment of acting judges to act instead of another. Now, maybe nothing turns on it.
MR ELLICOTT: Well, we would say a lot turns on it, your Honour, and I will come to that. As is appropriate, your Honours, your Honours have asked me a lot of questions and I have probably covered a lot of my notes. Could I take your Honours to some statements in Kable’s Case 189 CLR 51? At 101 Justice Gaudron, in the middle of the page, made this statement:
No mention has yet been made of ss 72 and 77, the only other provisions to be found in Ch III. If they are put to one side, the provisions of Ch III clearly postulate an integrated Australian court system for the exercise of the judicial power of the Commonwealth, with this Court at its apex as a constitutional court and as a court exercising appellate jurisdiction for the whole of Australia, and with no distinction, so far as concerns the judicial power of the Commonwealth , between State courts and federal courts created by the Parliament.
I am not trying to read that literally but it can, we would submit, be accepted literally without it being what one might call an over‑literal interpretation. At 102 her Honour said:
Neither the recognition in Ch III that State courts are the creatures of the States nor its consequence that, in the respects indicated, the Commonwealth must take State courts as it finds them detracts from what is, to my mind, one of the clearest features of our Constitution, namely, that it provides for an integrated Australian judicial system for the exercise of the judicial power of the Commonwealth. Moreover ‑ ‑ ‑
GLEESON CJ: Could I interrupt you to ask, how far down does that integration go?
MR ELLICOTT: As far as the investiture of federal jurisdiction.
GLEESON CJ: May go?
MR ELLICOTT: May go, and it can only go to courts and it is a moving feast, a moving feast in the sense that a State may call a body a court but it may not be a fit repository for the exercise of federal jurisdiction:
If Ch III requires that State courts not exercise particular powers, the Parliaments of the States cannot confer those powers upon them. That follows from covering cl 5 –
Then her Honour refers to section 106, as we do, because it is so basic to an understanding of our Constitution that it is not something for the Federal Parliament or the federal judiciary. It is the Constitution of the whole of the Commonwealth and the States and it is the origin of all their powers, parliamentary, judicial, notwithstanding that the notion of sovereignty still remains.
The question whether the Constitution requires that State courts not have particular powers conferred upon them depends, in my view, on a proper understanding of the integrated judicial system for which Ch III provides – the “autochthonous expedient”, as it has been called. One thing which clearly emerges is that, although it is for the States to determine the organisation and structure of their court system, they must each maintain courts, or, at least, a court for the exercise of the judicial power of the Commonwealth. Were they free to ‑ ‑ ‑
GUMMOW J: That is an important proposition, is it not?
MR ELLICOTT: It is.
GUMMOW J: Does that mean then that 77(iii) requires there to be at least one court in each State which is of a nature that is susceptible to the investment of jurisdiction?
MR ELLICOTT: Yes, your Honour, that is certainly the Supreme Courts.
HAYNE J: You say that court must be the Supreme Court, do you? It may go beyond it but ‑ ‑ ‑
MR ELLICOTT: It may be called something else but it has to be - the notion that is contained in the statement “Supreme Court of the State” as understood in 1900.
Were they free to abolish their courts, the autochthonous expedient, more precisely, the provisions of Ch III which postulate an integrated judicial system would be frustrated in their entirety. To this extent, at least, the States are not free to legislate as they please.
Two other matters of significance emerge from a consideration of the provisions of Ch III. The first is that State courts are neither less worthy recipients of federal jurisdiction than federal courts nor “substitute tribunals”, as they have sometimes been called. To put the matter plainly, there is nothing anywhere in the Constitution to suggest that it permits of different grades or qualities of justice, depending on whether judicial power is exercised by State courts or federal courts created by the Parliament.
That is an important sentence, in our submission. It really is underscoring our main submission because the quality of justice that we are talking about is the quality of independence and impartiality that guarantees that the court system will be perceived by ordinary people as being able to give judgments without fear or favour or ill will. The quality of justice, those words, although not found in Chapter III, the statement in that sentence we rely on very heavily.
CALLINAN J: And because of section 80 of the Constitution, the courts must consist of judges capable of instructing juries and making rulings on law for juries.
MR ELLICOTT: Yes. I think there is a thread certainly through the whole of Chapter III.
GUMMOW J: Yes, section 80 is rather significant for the proposition that you have laymen.
MR ELLICOTT: Yes.
CALLINAN J: Mr Ellicott, what section or the Crimes Act or what other Act actually invests Commonwealth criminal jurisdiction in State courts? You may not be able to answer it now.
MR ELLICOTT: That escapes me at the moment if it was ever in my mind.
GUMMOW J: Section 68.
MR ELLICOTT: I thought it was 39 of the Judiciary Act but I ‑ ‑ ‑
GUMMOW J: Section 68 of the Judiciary Act. There is a debate as to the interrelation between 39 and 68.
MR ELLICOTT: Yes.
KIRBY J: Of course, on current doctrine the requirement of section 80 could be easily circumvented, at least possibly, by proceeding summarily and not on indictment.
CALLINAN J: There have been some qualifications expressed ‑ ‑ ‑
KIRBY J: It is a doctrine that Justice Callinan and I do not agree with.
MR ELLICOTT: They are not so much skeletons but there are propositions ‑ ‑ ‑
KIRBY J: Lots of skeletons in the cupboard.
MR ELLICOTT: - - - that are found in Chapter III that come out of American background which are not necessarily dead but from time to time as the court changes and views change, they may suddenly find expression. So far as this notion is concerned, it is an abiding notion that there is only one quality of justice.
The second and perhaps the more significant matter which emerges from consideration of Chapter III is that State courts when exercising federal jurisdiction are part of the judicial system created by Chapter III and in that sense and on that account they have a role in existence which transcends their status as courts of the States.
GUMMOW J: Now, Mr Ellicott, you did not read to us the first paragraph on 102 which, I think, is important as to this slogan about taking them as you find them.
MR ELLICOTT: Yes.
Once it is accepted that State courts are the creatures of the States and are constitutionally recognised as such, it follows that it is for the States and for the States alone to determine the appointment, tenure and remuneration of State judges and the structure, organisation and jurisdictional limits of State courts. In that sense, it is correct to say, as it often is, that the Commonwealth must take State courts as it finds them. However, it should be remembered that that dictum originates in the judgment of Griffith CJ in Federated Sawmill, Timberyard and General Woodworkers’ Employees’ Association (Adelaide Branch) v Alexander, a case involving the question whether jurisdictional limits imposed by State law on a State court applied in matters of invested federal jurisdiction. It was in that context that his Honour said that “when the Federal Parliament confers a new jurisdiction upon an existing State Court it takes the Court as it finds it, with all its limitations as to jurisdiction, unless otherwise expressly declared” – a vastly different statement from the unqualified proposition that the Commonwealth must take a State court as it finds it.
And in the middle of page 103:
Once the notion that the Constitution permits of different grades or qualities of justice is rejected, the consideration that State courts have a role and existence transcending their status as State courts directs the conclusion that Ch III requires that the Parliaments of the States not legislate to confer powers on State courts which are repugnant to or incompatible with their exercise of the judicial power of the Commonwealth.
That proposition, in the context of Kable’s Case, may give rise to considerations which are not relevant here, that is to say, that if you had a court of a State - that is other than the Supreme Courts, just looking at a local court, if you like – and there was conferred on that court functions which were comparable to that which was under consideration in Kable then Kable would say to the States you cannot do that because you have set up a court and it is inconsistent with the notion of the independence of the judiciary that you should make it, in effect, an arm of the Executive for the purposes of the confining a particular person, as was the case in Kable.
At pages 114 to 119 Justice McHugh dealt with the matter. I had not proposed to read all of that because in a sense it repeats the same notions but in the words that his Honour used. At page 115 under the heading “Legislatures cannot alter or undermine the constitutional scheme set up by Ch III”:
It is axiomatic that neither the Commonwealth nor a State can legislate in a way that might alter or undermine the constitutional scheme set up by Ch III of the Constitution. The Parliament of the Commonwealth, for example, has no power under s 77(iii) of the Constitution to invest State courts with non-judicial functions except as an incident in the grant of judicial power. Similarly, a State cannot legislate for issues arising under Ch III to be referred to the Judicial Committee of the Privy Council or some other body for determination or advice in a manner that conflicts with the principles of Ch III.
Under the heading “Courts exercising federal jurisdiction must be perceived to be free” in the middle of page 116:
One of the basic principles which underlie Ch III and to which it gives effect is that the judges of the federal courts must be, and must be perceived to be, independent of the legislature and the executive government. Given the central role and the status that Ch III gives to State courts invested with federal jurisdiction, it necessarily follows that those courts must also be, and be perceived to be, independent of the legislature and executive government in the exercise of federal jurisdiction. Public confidence in the impartial exercise of federal judicial power would soon be lost if federal or State courts exercising federal jurisdiction were not, or were not perceived to be, independent of the legislature or the executive government.
In the case of State courts, this means they must be independent and appear to be independent of their own State’s legislature and executive government as well as the federal legislature and government. Cases concerning the States, the extent of the legislative powers of the States and the actions of the executive governments of the States frequently attract the exercise of invested federal jurisdiction. The Commonwealth government and the residents and governments of other States are among those who litigate issues in the courts of a State. Quite often the government of the State concerned is the opposing party in actions brought by these litigants. Public confidence in the exercise of federal jurisdiction by the courts of a State could not be retained if litigants in those courts believed that the judges of those courts were sympathetic to the interests of their State or its executive government.
While nothing in Ch III prevents a State from conferring non‑judicial functions on a State Supreme Court in respect of non‑federal matters, those non‑judicial functions cannot be of a nature that might lead an ordinary reasonable member of the public to conclude that the Court was not independent of the executive government of the State. A State law which gave the Supreme Court powers to determine issues of a purely governmental nature . . . would be invalid. It would have the effect of so closely identifying the Supreme Court with the government of the State that it would give the appearance that the Supreme Court was part of the executive government of the State.
At pages 133 and 134 your Honour Justice Gummow said, about a third of the way down:
The translation of what may be a politically difficult choice into what one distinguished United States judge called “a grossly unjudicial chore” jeopardises the integrity of the federal or State court in question in the exercise in other cases of the judicial power of the Commonwealth. It saps the appearance of institutional impartiality and the maintenance of public confidence. The point was made by the Supreme Court of the United States in Mistretta:
“The legitimacy of the Judicial Branch ultimately depends on its reputation for impartiality and nonpartisanship. That reputation may not be borrowed by the political Branches to cloak their work in the neutral colors of judicial action.”
All these comments and opinions that are stated in these cases are, of course, I have to accept, directed to what was involved in Kable’s Case, but they equally apply, in our submission, to this particular matter. That is to say, who shall exercise the federal jurisdiction as distinct from what powers can be properly imposed on a court of a State by the State Government. At the foot of the page:
He submits that the appearance of institutional impartiality in administering that law, and in inflicting punishment for breach of it, is sapped to an impermissible degree by ad hominem legislation of the nature I have discerned in the Act and described earlier in these reasons.
Your Honour deals with the integrated system from page 137 through to page 144. At the top of page 139 your Honour said:
The existence of such an integrated system of law and the terms of s 73 itself necessarily imply that there be in each State a body answering the constitutional description of the Supreme Court of that State. Contrary to what appeared to be a tentative submission by the Solicitor‑General for New South Wales, it would not be open to the legislature of that State to abolish the Supreme Court and to vest the judicial power of the State in bodies from which there could be no ultimate appeal to this Court.
The State courts
Further responses by the Director to the case for the appellant are to the effect that (i) the Constitution, in providing for investment of State courts which federal jurisdiction, offers the Parliament of the Commonwealth no more than a facility which it may or may not decide to utilise, and (ii) the State court systems stand outside and have no constitutionally mandated relationship with the federal judicature. Neither proposition should be accepted.
Just pausing there, in substance we would submit that that is what, with very great respect, the various counsel who are appearing here in a sense are doing. They are restating those propositions. They, of course, represent the Executive and the Executive is very interested in the ability to appoint acting judges and one can understand their submissions. But they draw no line in the sand. They see no harm in acting judges at all. It is extraordinary that they nestle behind those propositions.
It is, of course, open to the Parliament not to invest State courts in the broad terms found in ss 39 and 68 of the Judiciary Act. That is quite plain. But it does not follow that the Constitution is entirely silent as to the character or quality of the State court system which would provide substitute or alternative tribunals to the creation by the Parliament of a system of federal courts.
Your Honours, in Bradley’s Case 218 CLR 146, your Honours have in the majority judgment and to some extent in the judgment of the Chief Justice encompassed to some degree or expressed views which in a sense limit the debate here, make it unnecessary to establish various propositions because your Honours have accepted them. At paragraph 3 at page 152 your Honour the Chief Justice said this:
The fundamental importance of judicial independence and impartiality is not in question. It was recently affirmed by this Court in Ebner v Official Trustee in Bankruptcy. It was declared in Art 2.02 of the Universal Declaration of the Independence of Justice and in the Beijing Statement of Principles of the Independence of the Judiciary in the LAWASIA Region. The content of the principle that citizens have the right to have disputes decided by an independent and impartial tribunal has been examined in cases concerning Art 6 –
and your Honour then refers to the Canadian Charter.
In Porter v Magill, the House of Lords cited the statement of the European Court to the effect that, in considering whether a tribunal is independent, regard must be had inter alia to the manner of appointment of its members and their term of office, and the existence of guarantees against outside pressures.
With respect, that really puts the finger, as it were, on the essentials because for this case regard must be had to the manner of appointment of acting judges, their terms of office which can be for one year or up to one year, can be for two months, and they can be reappointed, and the existence of guarantees against outside pressures. When you combine the shortness of the tenure – and I will come to it later – it really is difficult to regard a statement such as you will find in the State laws that they should be appointed for one year and they have the benefit of the other State Act which means that they cannot be removed except on grounds of misbehaviour and also that their remuneration cannot be reduced. That is not, with respect, the security of remuneration and tenure that one talks about in terms of Chapter III. That is merely saying you can appoint them for six months or three months and during that time they will have the powers of judges and they will be secure in their term and in their remuneration, but it does not mean that they are providing the quality of justice because it is possible to describe what they have as security of tenure and security of remuneration.
The arguments put against me are at pains to stress this notion that it is antipathetic really to what Chapter III is requiring because Chapter III is not talking about people who are appointed for three months or 12 months or can be reappointed for another 12 months or three months. It is not talking about persons who are appointed perhaps for five years as acting judges who become part of a pool of judges for the purposes of administering the State system. Those ideas are antipathetic to Chapter III and the quality of justice that it demands.
KIRBY J: Mr Ellicott, I take the force of your submission and the undesirability and perhaps impermissibility of two grades, but in my mind I have a distinction which I hope you can help to remove, if it should be removed, between a barrister or solicitor who is picked up to do an acting judge assignment for a short time who has briefs on his table and perhaps goes back to those briefs at night, and a person who has perhaps for a long time, like Justice Foster, been a judge, in Justice Foster’s case, in a Chapter III court with a very long experience as a judge who has not gone back into practice and who is summoned back for periods to perform judicial work. I understand your arguments against it, but it does seem to me that that type of appointee as an acting judge is in quite a different class to a person who comes and goes as a legal practitioner and is then exposed to the problems of that short‑term appointment and who perhaps has never had the mental attitude that does tend to come with tenure for a long time as a judge. How can you put Justice Foster’s case in the same category as those cases?
MR ELLICOTT: Your Honour, the proposition we are putting first of all is saying that, with respect, that is the wrong point at which to apply the principle. The principle is not about the quality of the people who occupy the position; it is about the relationship between the judiciary and the Executive and the Parliament. It is about whether or not the appointment of acting judges will undermine the independence of the judiciary which Chapter III demands. The other thing is this ‑ ‑ ‑
KIRBY J: Could I just interrupt there to say that I can understand the force of that if serving tenured judges are then required to work day by day with people who are coming in and out and going back to practice, but that seems to me in a different class to serving judges having a person who has been a colleague and is coming in for a short period to perform particular duties. If the test and criterion is offensiveness to the design of the Constitution and to the capacity of State courts to receive federal jurisdiction, it just does not seem to have quite the same offensiveness to those principles.
MR ELLICOTT: Your Honour, if one were arguing should we allow acting judges and you were the legislature, you might say what is wrong with having retired judges, but you would need to ask the question: what are these retired judges doing? Some of my friends quite rightly refer to the fact that these retired judges are not employed all the time; they are employed by the day. They get $1000 a day. It was reduced from 1200 – not while they were in office but for the future. They might be brought up or rung up and said, “There’s a case on Tuesday. Will you sit?”, and they come and they sit. But what do they do the rest of the time?
It may be that Justice Foster went home and just enjoyed his retirement and had his salary, but by and large retired judges are not doing that, one might find on examination. I am not here to say that I have conducted any sort of Royal Commission into it, but some retired judges sit on Executive appointments. Justice Cole seems to be involved in an Executive capacity at the moment. Others do mediations and arbitrations, some give opinions, some might even appear. I know of one who appeared and is still appearing.
GLEESON CJ: I know of one who appears. There has been a big change in that in the last 30 years too. The Bar Rules had to be amended to accommodate those changes.
MR ELLICOTT: Well, they had and, your Honour, in those days you had to stay away from your court for a period. In fact, I was refused admission into Victoria for a time because of that fact, but I will not go into that, your Honour. To answer what your Honour puts to me, it is not the benign picture, benign in the sense that it is different to the barrister or the solicitor. I mean, your Honour ‑ ‑ ‑
KIRBY J: You say, as I understand it, that the offence is still there because the period is short, some may want it to be long, and the public may think, looking at appearances, that there is then a temptation that is not there in tenured judges and, secondly, the support infrastructure is not the same and, therefore, there might be the temptation not, as it were, to do with the same energy and enthusiasm the work that tenured judges do and that these are aspects which are not simply arguments against the merits of it, but they go to the heart of the function of a judge and of the judicial power and of the vesting of the federal judicial power in the State courts.
MR ELLICOTT: And an ordinary member of the public, as is suggested I think in the Canadian cases, properly informed of all the facts, would rightly say these people have been appointed by the Executive because they do not want to appoint full‑time judges. Now, if you get, as in New South Wales, 12 or 13 of them in a pool of acting judges and they are treated, as it were, as part of the everyday constitution of the court and operation of the court and they are brought in at the decision of the Chief Justice, or the President of the Court of Appeal, as the case may be, then they are clearly an appendage, but they are also appointed. When the member of the public, with all the facts, reasonably considers it, it would see them as a different class of judge.
GLEESON CJ: Mr Ellicott, can I ask you a question about the numbers that you refer to on page 11 of your written submissions, paragraph 38.
MR ELLICOTT: Your Honour, we have another document we wanted to hand up in relation to that, the reason being that those figures came out of the New South Wales Law Reports.
GLEESON CJ: There is a problem with the arithmetic in paragraph 38 because 33 plus 13 does not equal 57.
MR ELLICOTT: Yes, the total complement of the court of 57 includes the Chief Justice and the President of the Court of Appeal and the judges of the ‑ ‑ ‑
GLEESON CJ: But there are not 11 masters. You have 11 missing. If the total complement of the court is 33 plus 13, you have 11 missing and you cannot account for that by ‑ ‑ ‑
KIRBY J: Maybe the judges of appeal were left out.
MR ELLICOTT: Yes, that is what I am saying, your Honour. They are actually judges of appeal.
GLEESON CJ: There is another problem with that figure. The 13 do not work, as it were, the same length of time as the 33, do they? Typically, these acting judges come for periods of, say, three months or six months.
MR ELLICOTT: Yes.
GLEESON CJ: So if you looked at it from the point of view of a litigant and said, “What is the practical possibility of getting a case before an acting judge?”, you would get a very different appearance from that that comes out of paragraph 38. I am not saying it goes to the essence of your argument. I am just saying that the figures are a bit rubbery.
MR ELLICOTT: Yes. Your Honours, can I hand up this ‑ ‑ ‑
KIRBY J: Is this a national analysis that you are handing up now or is it purely New South Wales?
MR ELLICOTT: It is New South Wales but it relates to the annual reviews.
KIRBY J: But if we are looking at a constitutional principle for the whole nation, it might be helpful to know whether the trend that you are suggesting is a national trend and one that is a cause for concern.
MR ELLICOTT: There is certainly a trend in Victoria, as I understand it, your Honour, which has been adverted to in some of the documents that I will take your Honours to.
CALLINAN J: Mr Ellicott, before you get to that can I just ask you a question. No State has sought to change the arrangements for the dismissal of a judge, is that correct, that it must be done by an address in both Houses of Parliament? In Queensland there is only one, but both Houses. Then I think the dismissal has to be approved by the Governor‑in‑Council, is that right, after the addresses in Parliament and to vote to that effect?
MR ELLICOTT: Yes, your Honour.
CALLINAN J: I think there is authority that says that that approval by the Governor‑in‑Council is not a matter of mere form, that there has to be an application, in the United Kingdom, for example, an application of the mind of the monarch in that case to the principle. It does not follow automatically as a matter of resolution by both Houses. If that is correct, that seems to me to highlight two very, very different circumstances of tenure of acting judges and permanent judges.
MR ELLICOTT: Yes, your Honour.
CALLINAN J: There had been an instance in colonial times, had there not, of an attempt to remove a judge? Was that Boothby in South Australia?
MR ELLICOTT: If I can give your Honour a reference.
CALLINAN J: I do know, Mr Ellicott, that in Queensland I think the only instance of a judge being removed in Australia, in that case the Governor expressly sought an opinion and applied his mind to the matter, despite the resolution of Parliament in favour of dismissal.
MR ELLICOTT: Your Honour is no doubt familiar with Justice McPherson’s book, The Supreme Court of Queensland, which I was going to give your Honours a reference to. At pages 60 and following his Honour deals with the question of removal from office during colonial days. The question is raised as to whether or not, because the Crown had the ultimate say, whether that section that said you could be removed by the address of the Parliaments was in itself an absolute discretion. That work does refer to it and ‑ ‑ ‑
CALLINAN J: I think the better view is that it is not an absolute discretion, that there is still a further discretion.
MR ELLICOTT: There is a further discretion in the Crown.
CALLINAN J: And it is a real discretion.
MR ELLICOTT: It is not merely a rubber stamp, that is right.
GUMMOW J: In colonial times it would have been exercised by the Governor on further advice from the colonial office, I imagine.
MR ELLICOTT: Yes, and they were referred to the Privy Council almost invariably. Of course, I have not looked at the whole history, but Parliament had the practice of requiring in effect some form of hearing which required allegations to be made and to be proved.
CALLINAN J: Justice Vasta appeared at the Bar of Parliament and addressed Parliament in Queensland at some length.
GLEESON CJ: Mr Ellicott, this information that you have handed up again raises some questions about the figures. First of all, I happen to know that a number of the people listed here as acting judges were in fact District Court judges at the time they were acting judges of the Supreme Court of New South Wales.
MR ELLICOTT: Yes.
GLEESON CJ: The Chief Judge of the Land and Environment Court was appointed an acting judge of appeal. Justice O’Meally was a judge of the Compensation Court as well as the Dust Diseases Tribunal. The Honourable K.V. Taylor was a judge of the District Court. The Honourable M.W. Campbell, as appears, was Chief Judge of the Compensation Court, the Chief Judge of the District Court. There was a master of the Supreme Court appointed an acting judge. The Honourable H.L. Cooper was a judge of the District Court. So that you have included in the numbers of acting judges people who were judges of the District Court, one person who was a master of the Supreme Court and people who were chief judges of other courts.
The other thing is that the terms for which they acted as acting judges were not the same as the terms for which the full‑time judges acted as full‑time judges. There was an example, for example, a couple of years ago in the Supreme Court of New South Wales when three judges of the courts of other States were made acting judges of appeal for the purpose of hearing one particular case. Now, presumably, in your figures they are treated as the same number of acting judges as anybody else. So these figures, if I may say so, are very raw. They do not discriminate between different ‑ ‑ ‑
MR ELLICOTT: To use Mr Lynch’s description, rubbery.
GLEESON CJ: They do not discriminate between different kinds of people who are appointed as acting judges. Say you have Master Macready here, he is a master one day, he is an acting the judge the next day for maybe two or three months, but in your numbers he is treated as one of the judges, namely an acting judge, for that year. Is there some more refined way of looking at these figures, if we are to rely on figures at all? Maybe the figures are not important, but to the extent to which they are important that information is susceptible of a great deal of refinement.
MR ELLICOTT: Would your Honour mind taking it up again?
GLEESON CJ: Yes, certainly.
MR ELLICOTT: At 2002, so that we can – your Honour, I would say with respect, should not have any difficulty in seeing that it is ‑ ‑ ‑
GLEESON CJ: No, I know all these individuals, but this was at 2002.
MR ELLICOTT: In relation to that year I counted 12, but that is a large pool of acting judges.
GLEESON CJ: But you are including Master Macready as one, presumably?
MR ELLICOTT: Not on my reckoning, your Honour. I am trying to be fair to myself in the face of your Honour’s onslaught. If your Honour looks at page 5 under 2002, and knowing something of the people involved, there is the Honourable J. Brownie, Davies, Foster – we do not count the Honourable Ipp – Mathews. So we have four. Over the page, Smart, Carruthers, Ireland, Newman – we do not count Marcus Einfeld because he did not sit – Davidson ‑ ‑ ‑
GLEESON CJ: No, he was a judge of the District Court, was he not?
KIRBY J: Yes, he was.
MR ELLICOTT: All right, we will leave him out – Burchett and Cripps. We have 10 in that year.
GLEESON CJ: What length of time did they sit for, do we know that?
MR ELLICOTT: We do not know, but we say that is not to the point, because this is the annual review of the court and this is the official record. They treat them as if they are part of the court’s structure. They say:
the following persons held appointments as Acting Judges –
and they give the dates. Some of them, yes, who are named fall outside the category of persons who do not have judicial commissions otherwise.
GLEESON CJ: And none of those people are barristers.
MR ELLICOTT: No, but I can think of one or two that do other things, but this is not the point.
CALLINAN J: Mr Carruthers was an arbitrator and that came before the New South Wales Supreme Court, the issue of the fees that he was charging and how he was charging them.
MR ELLICOTT: But there are all sorts of possibilities that are open. You can speculate but they are not far from reality a lot of them, but the purport of our submission is that you do not really have to distinguish between barristers and solicitors and retired judges because, although retired judges have a quality of experience which fits them for further judicial work, nevertheless, in the context of a system which has them coming in and out of the court, they are open to other influences and because we know them we know that they are not corruptible, but that is ‑ ‑ ‑
CALLINAN J: But, Mr Ellicott, other lawyers appoint arbitrators and mediators, so they are still dependent, in a sense, upon some degree of patronage by other lawyers.
KIRBY J: Nothing may turn on this, but I notice under retirement in the 2004 period that the judges who have retired are described as having retired as a permanent judge of appeal. Justice Meagher, Justice O’Keefe and Justice Dowd have retired as a permanent judge of the Supreme Court. So there seems to be some verbal distinction creeping in between so‑called permanent judges of the Supreme Court and temporary judges of the Supreme Court.
MR ELLICOTT: In other words, you could rightly say there are two classes of judges.
GLEESON CJ: That probably reflects the fact that as from about 1990 Justice Samuels, Justice Hope, Justice Mahoney, I think – several judges of the Court of Appeal of New South Wales retired as full‑time judges and then sat as acting judges of appeal typically for three or six months a year.
KIRBY J: It did not happen in my time.
GLEESON CJ: That exactly did happen in your time. That is what Justices Mahoney, Hope and Lee did while Justice Kirby was President of the Court of Appeal.
KIRBY J: I must have been asleep.
GUMMOW J: Anyhow, your attack is on the validity of section 37 and we do not answer that by looking at the particular facts as what has happened in the exercise of the power in section 37. We consider it by looking at what section 37 permits ‑ ‑ ‑
MR ELLICOTT: What it does, yes, your Honour.
GUMMOW J: ‑ ‑ ‑unless it is read down in some way.
MR ELLICOTT: Yes, but just dealing with the issue that the Chief Justice has raised, once you start moving into it, you find problems about finding any benchmark for the acceptance of acting judges.
GLEESON CJ: That may be entirely correct. I am just questioning the percentages on the paper headed “Proportion of Judges” because they are based on numbers.
MR ELLICOTT: That was intended to be an aid, but if your Honours would look at the figures, they will show what we wanted to show and that was there were sizable numbers. We do not dispute and we do not even have to prove that, but it is as well to get as close to the facts as one can. Once one gets beyond the number who were appointed and into the question of whether you can distinguish between retired judges and barristers and solicitors or the like, then it is very difficult to lay down any proposition that enables you to apply a different proposition to one class rather than the other.
Your Honours, could I refer to Bradley’s Case, your Honour the Chief Justice at paragraph 3, if I could pick it up two-thirds of the way down 152:
Within the Australian judiciary, there are substantial differences in arrangements concerning the appointment and tenure of judges and magistrates, terms and conditions of service, procedures for dealing with complaints against judicial officers, and court administration. All those arrangements are relevant to independence. The differences exist because there is no single ideal model of judicial independence, personal or institutional. There is room for legislative choice in this area; and there are differences in constitutional requirements. For example, s 72 of the Constitution does not permit the appointment of federal acting judges. On the other hand, acting judges are commonly appointed for fixed, renewable, terms in some State and Territory courts. This Court decided in Re Governor, Goulburn Correctional Centre; Ex parte Eastman that acting judges may be appointed in the Supreme Court of the Australian Capital Territory. In the Northern Territory, the legislation with which this case is concerned provides for the appointment of acting magistrates (s 9). (The legislation also provides for the appointment of justices of the peace as Special Magistrates (s 14).)
Well, your Honour is there describing the past practice. What we are doing in this case is examining the principle that has to be applied. When your Honour says the differences exist because there is no single ideal model of judicial independence, personal or institutional, may we submit this, that it is not part of our argument, although it could be a starting point, to say that the solution in section 72 impresses itself necessarily on State courts. Now, that view does not seem to have been accepted by the Court. It is a possible view and it is not necessary for our argument to embrace it and we do not do so.
GLEESON CJ: One of the problems with that view might be that there has been a major change in Chapter III itself. None of us are appointed for life.
MR ELLICOTT: No. Well, that is a product of the past, your Honours, and had one been doing it again one might have made it 75. I do not know whether that sort of concession assists your Honour, but the ‑ ‑ ‑
GUMMOW J: I thought it was a statement of contrition.
MR ELLICOTT: It only indicates that times change. It also indicates that in – as was behind the section, because it is stated as if it was intended to get rid of judges who were a bit of an embarrassment. It was not the reason at all. The basic reason for that amendment was to ensure that there was a turnover of minds on the highest court in the land. Now, that may be agreed to or not agreed to. In other words, we are a young nation and we need to be just – I mean, sitting in Parliament, when you look around and you see the numbers of people, as I was able to do, who were there for a long time, you wondered why they were still there, except to get the parliamentary salary. Now, that does not happen with judges.
GLEESON CJ: A thought like that has never entered my head.
MR ELLICOTT: The Parliament needs to be revived all the time. People who feel they have done what they can should get out. Now, so far as the Court is concerned, it does not operate that way.
GLEESON CJ: But that did not stamp itself on the State judiciaries where they all have different ages of retirement.
MR ELLICOTT: Yes, and that is why one has to accept, in our submission, that section 72 does not stamp itself on the State Supreme Courts in its terms and we have described it as a permanent full‑time judiciary. It does not endorse acting judges. That quality of justice has to be stamped on State courts within that concept. They can choose 72, 70, they might choose a lesser age. One thing, we would submit, they cannot do is appoint acting judges, say, for six years or five years or judges for five years, call them judges. That is not consistent, we would submit. Well, we do not have to convince your Honours of this, but that is not consistent with Chapter III, because it is not a full‑time judiciary.
You could conceive of appointing judges for 40 years. That would be a stupid solution, just because 40 years is probably long enough for any useful judicial life. But the notion behind Chapter III is that those who are appointed are appointed for what is regarded as a useful judicial life. On the Family Court they might be appointed to 65 because it is thought, in the wisdom of Parliament, that that is an appropriate age ‑ ‑ ‑
CALLINAN J: Mr Ellicott, would the provision of an embargo upon reappointment of a term appointee secure judicial independence, that is to say, a provision that a person can be appointed for six months or a year or five years but may not be reappointed.
MR ELLICOTT: No, your Honour.
CALLINAN J: Why not?
MR ELLICOTT: Because it still leaves a person who is appointed for a short term and that is, we would submit, contrary to the notion in Chapter III. It is not a full‑time permanent judiciary. That is just a person who cannot be reappointed, who is appointed for 12 months, and that is it.
CALLINAN J: But the underlying reason is to secure independence, is it not, and might not such an embargo go some way towards doing that?
MR ELLICOTT: It might address that to some extent but short term appointments are capable of looking to favour in the future and even if they cannot be reappointed, this would be the theory behind it, even if they cannot be reappointed as a judge they may look to Executive favour in other respects and the world is full of those possibilities.
The reason for this notion of independence is growing with time because the world is opening up in so many ways. If you went back 30 years to retired judges, well they went home and did whatever they had to do. That was the end and there it was, but now it opens up a new career, a new life. Some who sit say, “Won’t it be good when we get out there”? It is a principle whose application becomes more important rather than less important simply because we are not in the 19th century any more.
CALLINAN J: Mr Ellicott, a retiring male judge in Queensland said to me, “The two questions you never ask your wife are, ‘What is for lunch?’ and ‘What time will you be home?’”. Judges do not do that now, they are out.
MR ELLICOTT: That is right. Depends on the wife too, your Honour.
HAYNE J: Under the Supreme Court Act as it presently stands, leaving aside the particular officeholders, Chief Justice, President and Chief Judges, could the court identified in section 25 – you may need the full Act before you - we will see how far we can get, Mr Ellicott - can the court described in section 25:
The Court shall be composed of a Chief Justice, a President of the Court of Appeal and such other Judges of Appeal and Judges as the Governor may from time to time appoint -
be comprised entirely, apart from the Chief Justice and President, of persons appointed in accordance with section 37 for 12-month terms?
MR ELLICOTT: No.
HAYNE J: Why not?
MR ELLICOTT: That would clearly offend Chapter III.
HAYNE J: I understand that but as a matter of construction of the New South Wales Act divorced for the moment from the considerations of Chapter III that you urge upon us, simply taking the construction of the Act.
MR ELLICOTT: I follow what you are saying. As far as the construction is concerned, yes.
HAYNE J: That is a view that seems perhaps to be given some reinforcement by the provisions of section 53(4) of the Constitution Act (NSW), section 53 being the provision dealing with removal from judicial office, and 53(4) providing that:
This section extends to term appointments to a judicial office, but does not apply to the holder of the office at the expiry of such a term.
If on its true construction the New South Wales Act has the consequence thus identified and if you are right to say that Chapter III sets at least an outer limit, the question becomes how far does one read down? You urge upon us, as I understand it, as a primary position the complete invalidity of section 37, the acting judges provision?
MR ELLICOTT: Yes, your Honour.
HAYNE J: Can I understand where the next line of trenches is drawn? If section 37 is not wholly invalid, do you have a set of trenches behind there? Where is it drawn?
MR ELLICOTT: Your Honour, I searched my mind for getting a test for severance of section 37 to make it valid once one reaches that proposition. Could I take your Honours to ‑ ‑ ‑
HAYNE J: Just to interrupt you a moment, the development of the Supreme Court Act in the form we now have it must be understood against a background where, once there were identified numbers of officeholders, that idea has been discarded as administratively or otherwise inconvenient. It is right to say that the Supreme Court could be composed only of the Chief Justice and a President and a series of 12 month appointees. The question may wear a face rather different from looking at the numbers of temporary judges, acting judges, who have been appointed at any time and how much work they did or did not do and what the financial consequences for them were for their accepting of acting appointments.
MR ELLICOTT: First of all, when you come to the construction of section 26, whether one can read it as justifying acting judges would obviously be a question of construction.
HAYNE J: The appointment in 37(1) is to “act as a Judge”. It is not an appointment to a separate office identified as the office of acting judge, you are appointed to act as a judge. True it is for a term, but you are appointed a judge.
MR ELLICOTT: Yes.
GUMMOW J: That is consistent with section 25. It has to be, because section 25 says:
The Court shall be composed of a Chief Justice, a President . . . Judges of Appeal and Judges as the Governor may from time to time appoint.
Capital “J” “Judges”.
HAYNE J: That is two classes of judges.
GUMMOW J: That is two classes, so it seems.
MR ELLICOTT: Yes, but all that does is add to the – not the confusion but the difficulties not with the submissions that we are putting but to the way in which Supreme Courts – and that may apply not only to New South Wales but to other courts – for the way in which it has been accepted that they could be made up of judges who are acting judges, if that is the proper construction.
HAYNE J: The argument against you, to put it in its most tendentious form, is that acting judges are only a slight case of pregnancy and the construction which now is under consideration rather suggests that the problem may have to be confronted as a problem of reading down the Act in some way or severing or doing something with it.
MR ELLICOTT: I was putting that looking at those sections you would read down the Act, perhaps, for the purposes of making it valid, give it that construction that when it refers to those other persons it has in mind those who are judges in the sense of a full‑time tenure judge and it is not referring to acting judges. That is to say that the presumption of validity would apply and that obviously that cannot apply if there is not an ambiguity which moves away from giving the meaning “acting judges” to it.
GUMMOW J: Section 37 (1) confers a power on the Government. A question may be to what extent does one read into that some restraints on the circumstances in which that power may be exercised?
MR ELLICOTT: We would submit, so far as the text is concerned, there is no way of doing that. If you look at the history, and we do set out the history - your Honours will have the book that accompanied our submissions – under schedule B one may trace the history and if I may start with 1 because it is necessary, also, to look at 9 Geo IV Ch 83 but in this sense it is not greatly different. At page 3 of that volume, which are numbered at the top, there is a reference to the 1823 statute:
His Majesty . . . by charters or letters patent . . . may erect and establish Courts of Judicature in New South Wales and Van Diemen’s Land . . . each of such courts to be respectively holden by one judge or chief justice, and to have such ministerial or other officers as shall be necessary for the administration of justice in such courts respectively, and for the execution of the judgments . . . Provided nevertheless, that if it shall hereafter appear to His Majesty, his heirs . . . to augment the number of the judges . . . shall be lawful . . . from time to time, as occasion may require . . . to augment the number –
Then on page 4, also on the second line:
in case of the absence or death of any or either of the judges of the said courts, or of any such disease or infirmity as shall render any such judge permanently incapable of discharging the duties of his office, the governor or acting governor of New South Wales may appoint some proper person to act in the stead of any judge so being absent, dying, or becoming permanently incapable, until such judge shall return, or until a successor shall be appointed by His Majesty, as the case may require; and in the meantime until such judge shall return, or a successor shall be appointed, and shall actually enter on the discharge of this office, the person so to be appointed by the governor or acting governor, shall exercise all the jurisdiction, powers, and authorities belonging to or vested in the judges of the said courts respectively.
Now, that makes the point that I think your Honour Justice Hayne referred to, namely that they were in the stead of a particular judge and that confined it. Now, under tab 2 – this was the District Court Act 1858 – at page 6:
It shall be lawful for the Governor with the advice of the Executive Council at any time to issue a special Commission to any one or more District Court Judge or Judges or to any one or more Barrister or Barristers of five years standing appointing him or them to act as Judge or Judges of the Supreme Court of Sydney or Moreton Bay for the trial of issues civil or criminal at any Circuit Court or Court of Gaol Delivery or at remote places at which a Judge of the Supreme Court of Sydney or Moreton Bay could not attend without detriment to the ordinary business of such Court and thereupon the person or persons so appointed shall at the place . . . have and exercise all the powers . . . of a Judge –
Then in 1892, page 7:
“It shall be lawful for the Governor –
that section having been repealed –
to issue a special Commission . . . at any place or places at which a Judge of the Supreme Court could not attend without detriment to the ordinary business of such Court, or to sit or act as a Judge of the Supreme Court at Sydney in any one or more jurisdictions of the said Court to be specified in such Commission, and for a time, not exceeding in any case six months, to be specified in like manner.
That is the first time when there was a non‑specification of circumstances. At page 8 at the bottom ‑ ‑ ‑
GLEESON CJ: Is that the first time barristers or solicitors come in as potential acting judges?
MR ELLICOTT: No, that came in in the District Court Act in 1858. That is when that emerged in New South Wales.
GLEESON CJ: Yes, I am sorry, yes.
MR ELLICOTT: It picked up the provisions of that Act, but it was different in the sense:
to sit and act as a Judge of the Court at Sydney in any one or more jurisdictions of the Court to be specified in such commission, and for a time not exceeding in any case six months to be specified in like manner.
In the Supreme Court and Circuit Courts Act 1900 those provisions were basically repeated. That appears at page 9, and then in the Supreme Court Act 1912 at page 10 ‑ ‑ ‑
GUMMOW J: Just a minute. Just stopping at the 1900 Act, this is at a time when the number of judges of the Supreme Court is fixed, the number of officeholders is fixed.
MR ELLICOTT: Yes, that is right.
GUMMOW J: I imagine.
GLEESON CJ: Where do we see that? Could I ask whether, to repeat a question you were asked earlier in relation to the current Act, under this legislation in 1900 you could have had a Supreme Court consisting of a Chief Justice and all acting judges?
MR ELLICOTT: No, your Honour.
GLEESON CJ: Why not? I do not mean consistently with the Constitution. I mean in 1900.
MR ELLICOTT: I do not have it in front of me, but the Judicial Offices Act 1892 which appears at page 7, that was a time when there was a fixed number of judges in the court and that was put in there to enable historically – it says:
could not attend . . . or to sit or act as a Judge of the Supreme Court –
and when we go, as we can, to the debate, the Attorney-General Barton was indicating that the purpose of this was to enable the judges of the Land Court to have commission so that, I suppose, in their additional time they could sit as Supreme Court judges, and it was in that context that that came in.
GLEESON CJ: Did you say that the Act was the Judicial Offices Act 1892 (NSW)?
MR ELLICOTT: I think so, your Honour.
GLEESON CJ: Thank you.
KIRBY J: I think the Victorian submissions pointed out that Sir Edmund Barton was an acting judge of the Supreme Court of New South Wales, something I did not know.
MR ELLICOTT: Yes, I think somebody points that out at some stage between 1892 and 1900. The Supreme Court and Circuit Courts Act 1912 amended that provision. At page 11, section 9:
The Governor may from time to time, by commission . . . appoint fit and proper persons to be puisne judges of the Supreme Court”: Provided that when the number of puisne judges amounts to seven or more the Governor may exercise the power conferred by this section only on resolutions of both Houses of Parliament ‑ ‑ ‑
GLEESON CJ: I am sorry, which one is that?
MR ELLICOTT: That is on page 11. It is the Supreme Court (Amendment) Act 1912. It is section 3.
GLEESON CJ: Thank you.
MR ELLICOTT: If you go over to page 12, section 6(3) at the top:
The Supreme Court and Circuit Courts Act, 1900, is amended by omitting the words “or of any circuit court” in section two, paragraph (a) of section thirteen, the words “at Sydney” in paragraph (b) of the same section, and the words “or in any circuit court” in section thirty‑four –
That had an effect of widening the appointment of acting judges.
KIRBY J: What is your purpose in taking us through these statutes which were all enacted and made and applied before the Kable enlightenment?
MR ELLICOTT: Your Honour, simply to understand the historical development of acting judges in New South Wales. It seemed to us that your Honours should have reference to that in that context.
KIRBY J: I am not disputing we should have it. What flows from it, though, as a matter of principle, so far as the Supreme Court is concerned?
MR ELLICOTT: If your Honour agreed with our basic proposition but felt that there was room for an acting judge, the history enables one, at least until 1912, to import a notion of very special circumstances. In other words, in colonial days and as at 1900, the circumstances were special – we would say very special – but beyond that it seems to have opened up. At page 15 in 1957:
The Governor may issue a special commission . . . to any Judge of the District Court, or to any barrister . . .
(b)to sit and act as a Judge of the Court in any one or more jurisdictions of the Court to be specified in such commission, and for a time not exceeding in any case –
so that the difference is that in those days it was no more than six months. It was quite obviously a limited period and obviously to sit in divorce or whatever jurisdiction might be chosen in the commission. One might construe that down, going back to the other, that it was only for very special circumstances. But as one goes forward into the Supreme Court Act 1970 you have this wide provision. That is at page 17:
37. (1) The Governor may, by commission under the public seal of the State, appoint any qualified person to act as a Judge for a time not exceeding six months to be specified in such commission.
. . .
(3) The person so appointed shall, for the time and subject to the conditions . . . have all the powers, authorities, privileges . . . of a Judge.
So it became unlimited. In practice, one may well find that that was confined, historically, to special circumstances – clearing up lists, perhaps, occasions when somebody was to follow a judge who was about to retire and for some reason it was thought appropriate – I think this may have happened with Justice Meares ‑ ‑ ‑
GLEESON CJ: Justices Lee, Meares and Woodward, I think, were appointed to clear up a back log in the divorce list as acting judges and I think they were all subsequently appointed permanent judges.
MR ELLICOTT: Yes. So, historically, in practice it was confined. The section in its current form came in in 1988:
The Governor may, by commission under the public seal of the State, appoint any qualified person to act as a Judge . . . for a time not exceeding 12 months to be specified in such commission.
Now, the requirement that the division should be specified in the commission disappeared in 1970 and it is, of course, not there in section 37 as it now is. It is interesting to note that there is no restriction on numbers. It is absolute terms. There is no bar reappointment.
GLEESON CJ: There never has been any restriction on numbers, has there, in express terms or any bar on reappointment?
MR ELLICOTT: No, the bar on numbers would be a bar which was implied from circumstances. That is to say, in the earliest of days it was to deal with the situation of a judge who was ill or absent or whatever it may be, but from 1858 onwards there does not appear to have been a restriction on numbers. They could sit in the Supreme Court for six months. But there is no restriction here on numbers. There is no restriction on circumstances. Now, should the Court imply circumstances and, if so, what should they be?
I would submit that the Court may be legislating if it starts on that path, unless in some way it could see some justification for implying the more limited provisions of the 1823 or the other Acts in colonial days, but by what criteria could one draw the line? We would submit that you cannot draw the line; that if acting judges are not permitted, then this section is invalid.
GLEESON CJ: Mr Ellicott, I notice it is quarter to one, just so we can keep an eye on the progress of this matter, how long do you expect to require to complete question 1?
MR ELLICOTT: Your Honour, I would think we could finish by three o’clock.
GLEESON CJ: When do you think you would finish question 2?
MR ELLICOTT: That will take most of the afternoon.
GLEESON CJ: So you expect to occupy most of the afternoon?
MR ELLICOTT: Yes, your Honour. I will try and be quicker.
GLEESON CJ: Very well, we will adjourn until 2.15.
AT 12.46 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.19 PM:
GLEESON CJ: Yes, Mr Ellicott.
MR ELLICOTT: Your Honours, I was referring to some passages in Bradley’s Case and I had referred to your Honour the Chief Justice’s judgment at paragraph 3. Could I take your Honours first of all to Ebner 218 CLR 146 at 162, paragraph 27 in which Justice Gaudron observed:
“Impartiality and the appearance of impartiality are necessary for the maintenance of public confidence in the judicial system. Because State courts are part of the Australian judicial system created by Ch III . . . and may be invested with the judicial power of the Commonwealth, the Constitution also requires, in accordance with Kable v Director of Public Prosecutions (NSW) that, for the maintenance of public confidence, they be constituted by persons who are impartial and who appear to be impartial even when exercising non‑federal jurisdiction. And as courts created pursuant to s 122 of the Constitution may also be invested with the judicial power of the Commonwealth, it should now be recognised, consistently with the decision in Kable, that the Constitution also requires that those courts be constituted by persons who are impartial and who appear to be impartial.”
In his reasons in Ebner, Kirby J, by reference to Kable, also expressed the view that:
“in Australia, the ultimate foundation for the judicial requirements of independence and impartiality rests on the requirements of, and implications derived from, Ch III of the Constitution”.
Those passages, I take it, are adopted by this judgment. Further down at paragraph 30:
The difficulty arises with the third step. This requires discernment of the relevant minimum characteristic of an independent and impartial tribunal exercising the jurisdiction of the courts over which the Chief Magistrate presides. No exhaustive statement of what constitutes that minimum in all cases is possible. However, the Legal Aid Service refers in particular to the statement by McHugh J in Kable that the boundary of legislative power, in the present case that of the Territory:
“is crossed when the vesting of those functions or duties might lead ordinary reasonable members of the public to conclude that the [Territory] court as an institution was not free of government influence in administering the judicial functions invested in the court.”
Much then turns upon the permitted minimum criteria for the appearance of impartiality. In that regard, Re Governor, Goulburn Correctional Centre; Ex parte Eastman established that s 72 of the Constitution had no application to the Supreme Court of the Australian Capital Territory because that Court was not a court “created by the Parliament” within the meaning of s 72 of the Constitution. It followed that there was no objection based upon the tenure requirement of s 72 to the appointment of an acting judge in that Court. Although in Eastman and in earlier cases other views have been stated on this subject, for these proceedings the point should be taken as settled.
Moreover, it may be added that the absence of a full commission to the trial judge in Eastman did not gainsay the appearance of impartiality. No question arose in Eastman respecting the effect upon that appearance of impartiality and the application of Kable to a series of acting rather than full appointments which is so extensive as to distort the character of the court concerned. No such question arises in this case.
That question put that way, or perhaps in a different way, arises in this case.
GLEESON CJ: All the reasoning in Bradley seems inconsistent with the idea that the principle on which you are relying is confined to Supreme Courts. This was about Magistrate Courts.
MR ELLICOTT: Yes, it is, but once the horse gets out of the stable it may move in many directions, your Honour, but we do not have to go in those directions, nor does the Court, in this case.
In Fardon’s Case (2004) 210 ALR 50, first of all at paragraph [15] where your Honour the Chief Justice said:
The decision in Kable established the principle that, since the Constitution established an integrated Australian court system, and contemplates the exercise of federal jurisdiction by state Supreme Courts, state legislation which purports to confer upon such a court a function which substantially impairs its institutional integrity, and which is therefore incompatible with its role as a repository of federal jurisdiction, is invalid.
At [37] under the heading on page 62, “Application of Ch III to the states”:
Chapter III of the Constitution, which provides for the exercise of federal jurisdiction power –
said Justice McHugh –
invalidates state legislation that purports to invest jurisdiction and powers in state courts only in very limited circumstances. One circumstance is state legislation that attempts to alter or interfere with the working of the federal judicial system set up by Ch III. Another is the circumstance dealt with in Kable: legislation that purports to confer jurisdiction on state courts but compromises the institutional integrity of state courts and affects their capacity to exercise federal jurisdiction invested under Ch III impartially and competently. Subject to that proviso, when the Federal Parliament invests state courts with federal jurisdiction, it must take them as it finds them.
[38] Cases in this court have often demonstrated that, subject to the Kable principle, the Parliament of the Commonwealth must take state courts as it finds them.
His Honour refers to a number of cases, including the Hospital Contribution Fund Case and the passage from Justice Gibbs’ judgment. At [41] his Honour says this:
The bare fact that particular state legislation invests a state court with powers that are or jurisdiction that is repugnant to the traditional judicial process will seldom, if ever, compromise the institutional integrity of that court to the extent that it affects that court’s capacity to exercise federal jurisdiction impartially and according to federal law, state legislation may alter the burden of proof and the rules of evidence and procedure in civil and criminal courts in ways that are repugnant to the traditional judicial process without compromising the institutional integrity of the courts that must administer that legislation. State legislation may require state courts to exercise powers and take away substantive rights on grounds that judges think are foolish, unwise or even patently unjust. Nevertheless, it does not follow that, because state legislation requires state courts to make orders that could not be countenanced in a society with a Bill of Rights, the institutional integrity of those courts is compromised.
Your Honours might ask why am I referring to that. I am referring to it merely to say that I would submit that that passage is not consistent with the views expressed in this Court in other matters. It does not have to be argued here but it may not be consistent with the propositions in Kable’s Case to which his Honour was a party. His Honour says:
[42] The pejorative phrase – “repugnant to the judicial process” – is not the constitutional criterion. In this area of constitutional discourse, it is best avoided, for it invites error. That which judges regard as repugnant to the judicial process may be no more than a reflection of their personal dislike of legislation that they think unjustifiably affects long recognised rights, freedoms and judicial procedures. State legislation that requires state courts to act in ways inconsistent with the traditional judicial process will be invalid only when it leads to the conclusion that reasonable persons might think that the legislation compromises the capacity of state courts to administer invested federal jurisdiction impartially according to federal law. That conclusion is likely to be reached only when other provisions of the legislation or the surrounding circumstances as well as the departure from the traditional judicial process indicate that the state court might not be an impartial tribunal that is independent of the legislative and the executive arms of government.
Then in paragraph [43] his Honour states his conclusions:
Kable does not govern this case. Kable is a decision of very limited application. That is not surprising. One would not expect the states to legislate, whether by accident or design, in a manner that would compromise the institutional integrity of their courts. Kable was the result of legislation that was almost unique in the history of Australia. More importantly, however, the background –
and he goes on to deal with that. That paragraph in particular pinpoints a particular area. At the foot:
The combination of circumstances which gave rise to the perception in Kable is unlikely to be repeated. The Kable principle, if required to be applied in future, is more likely to be applied in respect of the terms, conditions and manner of appointment of state judges or in circumstances where state judges are used to carry out non‑judicial functions, rather than in the context of Kable-type legislation.
That passage, needless to say, we do agree with and it describes the problem as it arises here.
At paragraphs [101] to [104] Justice Gummow in relation to Kable said this at paragraph [101]:
Secondly, the essential notion is that of repugnancy to or incompatibility with that institutional integrity of the state courts which bespeaks their constitutionally mandated position in the Australian legal system. The point was made as follows by Gaudron J in Kable:
Once the notion that the Constitution permits of different grades or qualities of justice –
I have already read that from Kable.
[102] Thirdly, one important indication that a particular law has the character just stated is that the exercise of the power or function in question is calculated, in the sense of apt or likely, to undermine public confidence in the courts exercising that power or function. The relationship between institutional integrity and public confidence in the administration of justice was discussed, in strongly disapproving any judicial participation in “plea bargaining”, by the Full Court of the Supreme Court of Victoria in R v Marshall. However, although in some of the case considering the application of Kable, institutional integrity and public confidence perhaps may have appeared as distinct and separately sufficient considerations, that is not so. Perception as to the undermining of public confidence is an indicator, but not the touchstone, of invalidity; the touchstone concerns institutional integrity.
[103] Fourthly, the notions of repugnancy and incompatibility appear elsewhere in constitutional doctrine.
And your Honour goes on to refer to those.
[104] But, in that last category, as with Kable and the present case, the critical notions of repugnancy and incompatibility are insusceptible of further definition in terms which necessarily dictate future outcomes. For example, in the joint judgment in Northern Australian Aboriginal Legal Aid Service Inc v Bradley, there was reserved for consideration elsewhere “the application of Kable to a series of acting –
and your Honour refers to those passages I have already adverted to. At paragraphs [136] to [138] your Honour Justice Kirby deals with the Kable principle:
[136] Avoiding repugnance to Ch III: Too much has been made of the differing ways in which the majority in Kable expressed their respective reasons . . . The essential idea was relatively clear and simple. Because state courts . . . may be vested with federal jurisdiction which they are then bound to exercise, they must exhibit certain basic qualities as “courts” fit for that function.
[137] In short, state courts must remain at all times curial receptacles proper to the exercise of federal jurisdiction. Although they are not, as such, federal courts, subject to the express strictures of Ch III, their inclusion in the integrated judicature of the Commonwealth, the provisions for appeals from them to federal courts and the facility for the vesting of federal jurisdiction all imply that they cannot be required by state law to perform functions inconsistent with (“repugnant to”) Ch III.
[138] In particular instances of challenge, it falls to the courts themselves (ultimately this court), to explain the contents of the Kable principle. The principle must be given meaning in a context that respects the different constitutional origins and histories of state courts; but which also upholds the implications necessary to their undoubted place within the judicature envisaged by the federal Constitution. Just as the states of Australia are not, constitutionally speaking, merely the colonies renamed, so state courts, after Federation . . . derive particular functions and characteristics from the federal Constitution. These requirements are not identical to those imposed explicitly on federal courts. However, they cannot be so different from such requirements as to undermine the integrated scheme for the national judicature which the Constitution creates.
. . .
[141] This is what I take Kable to require. It forbids attempts of state parliaments to impose on courts, notably Supreme Courts, functions that would oblige them to act in relation to a person “in a manner which is inconsistent with traditional judicial process”. It prevents attempts to impose on such courts “proceedings [not] otherwise known to the law”, that is, those not partaking “of the nature of legal proceedings”. It proscribes parliamentary endeavours to “compromise the institutional impartiality” of a state Supreme Court. It forbids the conferral upon state courts of functions “repugnant to judicial process”.
Your Honours Justices Callinan and Heydon at [213]:
In Kable, the justices in the majority used differing formulations when stating the principles, but all of them referred to constitutional integrity, or public confidence, or both. With respect to the powers purportedly conferred by the Community Protection Act, Toohey J held that they were incompatible with the exercise of the judicial power of the Commonwealth because they were of such a nature that public confidence in the integrity of the judiciary as an institution was diminished. Gaudron J said that they compromised the integrity of the judicial system brought into existence by Ch III of the Constitution, which depends on state courts acting in accordance with the judicial process and on the maintenance of public confidence in that process. The opinion of McHugh J was that the impugned conferral of non‑judicial power or other incidents of the court should not be such as could lead an ordinary reasonable member of the public to conclude that the court was not independent of the executive government . . . Gummow J was of the view that the exercise of statutory powers jeopardized the integrity of the court, and sapped the appearance of institutional impartiality –
and your Honours went on in paragraph [219] to conclude:
It is possible that a state legislative conferral of power which, if it were federal legislation, would infringe Ch III of the Constitution, may nonetheless be valid. Not everything by way of decision‑making denied to a federal judge is denied to a judge of a state. So long as the state court, in applying legislation, is not called upon to act and decide, effectively as the alter ego of the legislature or the executive, so long as it is to undertake a genuine adjudicative process and so long as its integrity and independence as a court are not compromised, then the legislation in question will not infringe Ch III of the Constitution.
I have taken pains to read that, your Honour, simply because it represents what we understand to be the current view of some of your Honours on those particular matters. Although they refer to the conferring of powers, we would submit it is abundantly clear from Bradley’s Case that the Kable principle also applies to the appointments to State courts and the tenure and remuneration of judges insofar as provisions relating to them might impact on the independence of those courts.
I was also referring before lunch to section 37. I wanted to refer, in going back to it, to first of all note that the reference to retired judges came in in 1992. There were specific provisions about retired judges in subsection (4) and subsection (4A) ‑ ‑ ‑
GLEESON CJ: I think it was in 1992 that the discrepancy between the retirement age in New South Wales and the retirement age in federal jurisdiction emerged. Unless my memory is playing tricks on me, I think it was up until then that New South Wales judges had to retire at 70 also.
MR ELLICOTT: Yes. Then the question of appointing acting judges, who were over 70 too, was dealt with specifically in 1992 by (4A). It should be observed that (3A), which was inserted in 1990, provided:
The person so appointed may, despite the expiration of the period of the person’s appointment, complete or otherwise continue to deal with any matters relating to proceedings that have been heard, or partly heard, by the person before the expiration of that period.
That would seem to be an unusual provision in relation to judicial work by full-time judges. Your Honour the Chief Justice pointed out to me that we had included in that list District Court judges who had been appointed acting judges of the Supreme Court. I wanted to take your Honours quickly to schedule C, which is at page 42 of our book which sets out – in this case it sets out Hansard statements. Page 42 is dealing with the Judicial Offices Bill – I might have said “officers”, your Honour, this morning. I am not sure – Judicial Offices Bill. Mr Barton, at page 42, deals with it.
Your Honours might wonder what point am I on. I am submitting that there may be a reason, which is understandable, for coming to the view that an acting judge of the Supreme Court who already has the judicial tenure of the substance that Chapter III we would say requires, is not offensive if that person is appointed during the term of that, for instance, District Court appointment as an acting judge of the Supreme Court. There may be a distinction there, if the Court was looking for some point at which – although it may be a bit difficult to get it out of section 37, but if anything that is one possible point of severance in relation to 37 but, I would submit, it is structurally difficult to get it. It does seem that prior to 1900 there were appointments of this character, and this is one illustration of it.
GLEESON CJ: There is a long history actually in New South Wales of appointments of District Court judges as acting judges of the Supreme Court.
MR ELLICOTT: Yes, that is right. What he says at the top of our page 42 on the right‑hand side:
What the Government are endeavouring to do by the bill is to provide that, in case of emergency, there may be an additional judicial authority at not too great an expense to the country – in the first place, by asking for a power which, I understand, it was the intention of the previous Secretary for Lands to ask for, to give any president of the land Court the status of a judge of the Supreme Court, taking care also to provide that the business of the Land Court should have the first claim upon him – that it should have priority, but that the president should also have the opportunity of acting as a judge of the Supreme Court in addition to the other judges thereof. By that means it is believed that by a very slight additional expenditure a long stride will be taken towards mitigating any block of work in the Supreme Court, and will be the means of having gentlemen appointed to that position whose experience and ability have already been tested.
I will not read it all but there are statements by other members of Parliament.
At page 45 there is the second reading speech in the Legislative Council in relation to the amendments to the Supreme Court and Circuit Courts Act in 1912. This obviously has no strictly legal effect except it does assist us to state – this would be that – I do not know whether the Honourable F. Flowers was the Attorney‑General or not. I should not think so, but he was certainly the Minister responsible in the Legislative Council for introducing it. He says a third of the way down the first column:
The objects of the bill are principally to relieve the congestion of business in the Supreme Court without the necessity of appointing acting judges, to minimise the likelihood of congestion occurring in the future . . . I am not prepared to say whether there is any extensive congestion at the present moment, but we are aware that there has been congestion in the past –
and he goes on to deal with that. At the top of the next column:
and the system which has grown up of appointing acting judges cannot, I think, be defended. The principle to be followed in appointing judges is to remove them, as far as possible, from every temptation, to protect them so far as legislation can protect them, and to make them thoroughly free and independent. I think it is impossible to clothe acting judges with the same amount of protection as is afforded to our permanent judges, and the bill aims principally at bringing to an end what is considered to be a very undesirable and improper practice of, whenever we find the court congested, appointing acting judges. In the past, when the work has become congested, there has been no alternative, as far as the Governments of the day were concerned, but to immediately appoint someone to carry out the work. As a matter of fact, acting judges have sat for some six months or more, and after that have returned to their duties as advocates. This practice is objectionable, and should certainly be discouraged. I have a statement explaining the principal clauses in the bill –
and he goes on. There are other passages at 48 ‑ ‑ ‑
GLEESON CJ: There is a confession about four lines on that indicate he is not the Attorney‑General. At least, I hope it indicates that.
MR ELLICOTT: I do not think he was, your Honour. There are statements at pages 48 and 49.
HAYNE J: This is happening at the time of the introduction of the criminal appeal provisions in New South Wales?
MR ELLICOTT: Yes, that is right. But they are instructive in relation to views that are expressed at that time about using acting judges. In schedule E of the same volume at page 76 there are set out articles and comments concerning acting judges. Now, these again are not proving anything except statements that have been made.
GLEESON CJ: Does Chapter III have anything to say about the possibility of federal judges accepting acting appointments as judges, for example, in courts of the Pacific?
MR ELLICOTT: I had never thought that it did, your Honour. Perhaps that is not a very relevant statement to make in answer to what your Honour said. Reading some of the more recent judgments of this Court, and some of the implications from Wakim’s Case, it might be in doubt.
GLEESON CJ: Fiji, for example, makes quite extensive use of acting judges, does it not?
MR ELLICOTT: Yes, and Vanuatu, I think. It is not uncommon for judges of the Federal Court, I think, to have some role in those countries.
GLEESON CJ: And some judges of State Supreme Courts also.
MR ELLICOTT: But it is no different, in a sense, one might think, whether federal judges can do anything in relation to search warrants or telephone intercepts. Maybe the same principle applies, namely, that if they are doing something which is compatible with their judicial work as Federal Court judges, for instance, then it is quite proper and does not offend Chapter III if they do that.
Now, one might ask, why did Sir Owen Dixon go to Washington or Sir John Latham go to Tokyo, but they did. One might ask whether they were doing that in accordance with Chapter III or whether in some way they were violating. I suspect nobody thought about that in those days because their appointments were seen to be necessary to the war effort - or Sir Owen Dixon going off to Kashmir, or Sir Garfield Barwick going off to the National Court of Justice. I would submit no incompatibility with Chapter III in those things happening. The wartime experience is unlikely to be repeated, although some of your Honours might feel it would be a relief to be able to do such a task. But I would submit there is nothing incompatible with it. Your Honours, at page 77 ‑ ‑ ‑
KIRBY J: I think the Australian judges who serve in the Pacific are not, as such, acting judges. They receive commissions, for example, in the Supreme Court of the Fiji Islands or the Court of Appeal of the Fiji Islands and they are judges of those courts, but they do it part‑time and often in their holidays and so on.
MR ELLICOTT: That is right.
GLEESON CJ: Are their commissions not for a term and are their terms not renewable?
MR ELLICOTT: I have no doubt, your Honour, that an argument could be mounted, but I would submit in the long run, just as it is necessary to take time out if a Royal Commission was permissible, it certainly has been. There is the case involving Justice Matthews where it was thought that was too close for comfort, but on the other hand there may be other cases of Commissions of Inquiry which are compatible with the judges’ duties.
KIRBY J: That case was Wilson v The Minister for Aboriginal Affairs.
MR ELLICOTT: Wilson, yes. So it is an arguable matter obviously but I would submit that if it is at all relevant here that Chapter III does not offend, even though it may be in the interests of my client for me to put the opposite argument.
Your Honours, at page 77 we find the President of the New South Wales Bar Association, Mr Bennett, making certain comments. I invite your Honours to read that to get some view of what the legal profession, and sometimes judges, have said on this subject. They are particularly informative. There is no doubt that the New South Wales Bar Association was consistently against it, and some of your Honours would have personal knowledge of that. Your Honour Justice Kirby has expressed views about this and that is ‑ ‑ ‑
KIRBY J: I was careful to reserve the constitutional validity of it.
MR ELLICOTT: Your Honour did quite properly reserve the constitutional issue that might come before this Court, but your Honour pointed out a number of ways in which acting judges were deficient. Under tab 5 there is a statement at page 93 by Justice Phillips, in the middle of the first paragraph:
At the ceremonial sitting of the Supreme Court on 17 March to mark the coming retirement of Justice of Appeal John D. Phillips, His Honour devoted almost the whole of his remarks to the issue of judicial independence. In relation to the proposal in the Acting Judges Bill, His Honour identified the critical distinction . . . :
It is one thing to tolerate the occasional acting appointment to this Court for a limited time or purpose; it is altogether different to institutionalise such temporary appointments at the discretion of the Executive.
Acting judges are, His Honour said, “anathema”. “Judges of a court properly so called must have security of tenure or, in a relatively small community like this in Victoria, the whole system is put at risk. Our courts have been remarkably free from any taint –
and there are other passages there which ‑ ‑ ‑
KIRBY J: What page was that that you were reading then?
MR ELLICOTT: That is page 93. In relation to the same issue, at page 96 and 97 there is a lengthy letter from Justice Sackville representing the Judicial Conference of Australia which expresses views about the same subject matter. We have put that in there so that your Honours may reflect upon those views. They are views which, we submit, are very apposite. The Attorney‑General to the Commonwealth also saw it appropriate to make a statement, at page 103, paragraph 83:
Another threat to judicial independence is the Bracks Government’s proposal to create a large number of Acting Judges drawn from outside the traditional ranks of acting judges –
well, that is hardly traditional, but anyhow –
(ie retired judges) in order to test the suitability of a candidate for permanent judicial appointment. This is a direct attack on the independence of judges. These acting appointments would radically undermine the security of tenure of a large number of members of the Victorian Supreme Court.
and so on. He ends up and says it is:
the greatest threat to the independence of the judiciary we have seen for a very long time.
If he was consistent he would at least say to this Court, well, only appoint retired judges. We, of course, would not accept that limitation. Your Honours, those are our submissions in relation to the first question.
GLEESON CJ: When you come to the second question, Mr Ellicott, it would assist me, speaking only for myself, if you could just briefly mention the procedural background of this and how the question arises? This is question 2.
MR ELLICOTT: The second question, yes. Your Honours, the second question is dealt with in paragraphs 41 and onwards on page 11 of our written submissions. We have done our best to set out there the tangled web, in a sense, of these provisions. The issue first arose in a judgment which is set out at page 38 of the record book, volume 1.
KIRBY J: You never raised any objection to Justice Foster before his Honour?
MR ELLICOTT: No. That is on question one. I am directing the ‑ ‑ ‑
KIRBY J: I realise that but I am just getting it clear, that is all.
MR ELLICOTT: It was not raised and it was not raised in the Court of Appeal.
KIRBY J: You allowed the trial to go ahead and then brought this up at a later stage?
MR ELLICOTT: Not in the way it happened in this sense that, as I am about to point out, one of the defendants appeared in person and did not raise the point. One might understand why, but on the other hand there are principles about that. We would submit that where the question ‑ ‑ ‑
KIRBY J: I assume you cannot have waiver against the Constitution. If the Constitution has a requirement it must be complied with and the fact that the point was not taken is not determinative.
MR ELLICOTT: That is right. In paragraph 6 of his judgment at page 39 Acting Justice Foster says:
The first ground of the notice of motion is to the effect that these proceedings are incompetent. Mr Endresz submits, because of the relevant provisions of the Corporations Act 2001 (Cwth), that the proceedings, which were commenced before that Act came into effect on 15 July 2001, became thereby a nullity and could only be revived by the bringing of fresh proceedings pursuant to the provisions of that Act.
7 It may be noted that the proceedings were brought under the provisions of the Corporations Law, which legislation was superseded by the Corporations Act 2001.
8 As I understand his sub mission, and I have had some difficulty in doing so, it is that the proceedings were commenced under the Corporations Law framework, which meant that they were brought in the New South Wales State jurisdiction. The Corporations Law having been repealed and replaced by the Corporations Act, a Commonwealth Act, the original proceedings cannot be maintained in what is now Federal jurisdiction.
9 I cannot find any substance in this argument.
Then at paragraph 20 on page 43:
It was submitted on behalf of the defendant that section 1401 was invalid, as not being a valid exercise of legislative power under the Commonwealth Constitution. As I understand the submission it was based upon the “deeming” effect of the section 1401. It was put that deemed liabilities could not properly be matters within chapter 3 of the Commonwealth Constitution, specifically in relation to sections 75 and 76 . . .
22 I am quite satisfied that the applications which are the subject of substitution under the provisions of section 1401 cannot in any way be regarded as hypothetical within the meaning of those decisions. The submission then that there is, as a result of those decisions, no justiciable matter which can arise under the section, with the consequence of unconstitutionality is in my view simply not made out.
So that, although he missed the acting judge point, he did not miss the matter point. That has of course been developed in relation to question 2. When the case went to the Court of Appeal, the issue does not seem to have been picked up by, I think it was Mr Biscoe who then appeared. At paragraph 47 on page 185:
The argument Mr Biscoe QC advanced on the appellants’ behalf on appeal was more sophisticated than that the primary judge was asked to consider.
If your Honours go to 46:
1. His Honour should have held that the proceedings which had been commenced under and for alleged contraventions of the Corporations Law, were not validly continued under the Corporations Act.
So both before Acting Justice Foster and before the Court of Appeal there were grounds relying on this particular question. They were not developed and therefore there is no actual – there is a decision of Justice Foster which does not catch the point in the way we would put it.
In the Court of Appeal it can be said that in a broad sense it was discussed because in a way you cannot avoid a consideration of these complex provisions without having to ask this question of how it is that these proceedings can be continued. I do not know whether that answers your Honour’s question but that is how it has arisen. Therefore, it is a point which I would submit this Court in considering an application for special leave in relation to it would regard, being a point of law, as one which it should, if it felt it was of sufficient importance, as we would say it is, entertain.
Your Honours will find at schedule F of our book the relevant legislation. It is a journey which has to be undertaken in order to understand our point. Hopefully, we submit, your Honours have already understood it by reference to our written submissions. I hope they are sufficiently clear for that purpose. I suppose it can be summarised in this way, before taking your Honours on that journey through the sections, by saying that the nub of a proceeding which was a continued proceeding, that is the proceedings taken by ASIC, had to be the contravention of a provision that was a civil penalty provision and which could only have been a provision under federal law because the State law had been repealed after ‑ ‑ ‑
KIRBY J: Now, can I just understand it. When the proceedings began the State law and the State law only applied.
MR ELLICOTT: That is correct, and it was a federal jurisdiction proceeding ‑ ‑ ‑
KIRBY J: But then there was that strange provision where in a sense the States permitted the Federal Parliament to amend the Code, did they not ‑ ‑ ‑
MR ELLICOTT: Yes, that is the ‑ ‑ ‑
KIRBY J: ‑ ‑ ‑ or agreed that the amendments made nationally would be applied in State law as if made by the States?
MR ELLICOTT: Yes.
KIRBY J: But the trial before Justice Foster had not commenced at that stage and his Honour’s application of the law and his Honour’s judgment occurred at a time when only the federal Corporations Act applied.
MR ELLICOTT: Yes.
KIRBY J: So from the beginning to the end of the trial it was a federal Act and therefore federal jurisdiction.
MR ELLICOTT: That is right.
KIRBY J: So the question is, did it get lost somewhere between the happening of the offence and the beginning of the trial and the conclusion of the trial?
MR ELLICOTT: It really is a question of whether the proceedings had lost their substance under federal law which they had under State law, that is to say the substance being the contravention under State law of a provision which operated in 1998 when these actions occurred under State law and operated effectively, whether there was a civil penalty provision which operated as federal law as at 1998, because if you could not show that there was a contravention of a civil penalty provision and there was no such provision enforced in 1998 then that was the end of it.
HAYNE J: Now, this temporal element is central to your argument, is it not?
MR ELLICOTT: Yes.
HAYNE J: In particular, we see that at paragraph 58 of your written outline, do we not?
MR ELLICOTT: I suspect we do, your Honour.
HAYNE J: In particular, a central proposition, or at least a central proposition, you make is that in the last sentence of paragraph 58.
MR ELLICOTT: Yes.
HAYNE J: Now, the time that is injected into that proposition is a time identified as the time “that liability is alleged to have arisen”, the last few words, is that right?
MR ELLICOTT: That is right, yes.
HAYNE J: Is not the liability that is alleged to have arisen a liability under the federal Act?
MR ELLICOTT: Well, that is what they alleged, but the question is whether it did arise under the federal Act.
HAYNE J: I understand that, but ‑ ‑ ‑
MR ELLICOTT: But it had to be that. It had to be a liability under the federal Act.
HAYNE J: But the proposition that you make depends, does it not, upon making good the temporal element in the last sentence of paragraph 58, namely, that the liability which is being enforced is a liability under the former State law?
MR ELLICOTT: Yes, but that liability was never made a federal liability imposing itself on these defendants at the relevant time in 1998.
HAYNE J: That is, the time to which you point is exclusively 1998?
MR ELLICOTT: Yes.
HAYNE J: A question which arises is whether the effect of these perhaps complicated transitional provisions is to attach liability in the year in which the federal Act came into force on account of events that occurred prior to enactment?
MR ELLICOTT: Yes, well, we say in relation to that that they thought they were doing it apparently, but they did not do it.
HAYNE J: Did not do it in the sense of did not achieve it through the drafting, or did not do it in the sense of could not do it?
MR ELLICOTT: They did not do it through the drafting. I was going to go on and say if they had made that provision a retrospective provision using different language they may have arrived at the proper conclusion that gave validity to these proceedings, but they did not do it. There are arguments being put that the effect of it is retrospective. It is our submission that that is not the consequence.
To sheet that home, if I can take your Honours to the relevant provisions and endeavour to explain them. If we go to page 118, your Honours will recall that is of this book that we have handed up. It is under schedule F. Your Honours will recall the national scheme which came into force in the late 80s and, as your Honour Justice Hayne pointed out, that is when they picked up the – or it may have been Justice Kirby – they picked up a Commonwealth law and made it State law and so the Corporations Law of each of the States came into force and the Corporations (New South Wales) Act 1990, which is set out at 118 and 119 does just that. That law was a part of the Corporations Legislation Amendment Act of the Commonwealth and that appears at page 120 in its relevant part. Those are only put there to indicate the source of that national scheme law.
So as at 1998 when the events occurred, there is in force the national scheme law. It is an Act of the State. At 122 there is set out certain duties and liabilities of officers. The relevant provisions for these proceedings are 232(2), (4) and (6) and (6B). Subsections (2) and (4) say no more than what an officer of a corporation shall do, that is, act honestly, et cetera:
In the exercise of his or her powers . . . must exercise the degree of care and diligence . . .
(6) must not, in relevant circumstances, make improper use of his or her position –
Subsection (6B) is important:
Subsections (2), (4), (5) and (6) are civil penalty provisions as defined by section 1317DA, so Part 9.4B provides for civil and criminal consequences of contravening any of them, or of being involved in a contravention of any of them.
So it looks ahead to Part 9.4B. Another provision which is relevant, which I simply point out, is 243ZE, which appears at 125 and it has a similar provision in relation to it being a civil penalty provision as defined and that means that anybody who was aware of these provisions would immediately know that they were not merely stating shibboleths or guides to company directors, but that if they breached them, they could be liable for civil consequences of contravening them. Now, at 127, 1317DA stated that:
Each of the following provisions . . . is a civil penalty provision –
and 1317EA at page 128 provides that the “Court may make civil penalty orders” which – fines, penalties and also the – I think your Honours considered these provisions in one of the Rich Cases and another case. It also provided that those people could, in certain circumstances, be prevented from acting as company directors. There is another provision, EB, which says that an application for declarations under EA can be made by ASIC and other persons. That is important because that is the right which ASIC had to bring proceedings under 9.4B. Your Honours will notice that 1317DA and 1317EA are in Part 9.4B.
The CLERP Act appears at 129. It is important to note what it did. It came into force on 14 March 2000. At this stage nothing has happened in relation to my clients. No proceedings have been taken although you can say that ASIC had an accrued right to take proceedings after the CLERP Act but up to that time they – not an accrued right, the sections actually operated to give them the right to take proceedings. Then at 130, if your Honours will not mind me referring to it as the CLERP Act, which had a Commonwealth derivation but it became State law. At 130, 6, Part 9.4B was “Repeal the Part” and “substitute” another part.
What happened, and it is important to have this as background, it re‑enacted another, but not in the same form, another Part 9.4B. What it also did was substitute for sections 232 and 243ZE which were repealed, it substituted other provisions and those provisions were contained in 180, 181, 182, et cetera, and 209. In other words, those in the 180s corresponded to 232 and 209 corresponded to 243ZE but those provisions were repealed and that is ‑ ‑ ‑
GLEESON CJ: Are we concerned with section 1370 on page 132?
MR ELLICOTT: We certainly are, your Honour. Your Honour is going to be very concerned with it. But the lead-in is, first of all, to 1473. Now, Part 9.4B has been repealed, but 1473 provides:
(1) Part 9.4B of the old Law continues to apply in relation to:
(a)a contravention of a civil penalty provision listed in section 1317DA of the old Law . . .
despite its repeal.
Now, that did not mean that Part 9.4B still remained as a provision – it had been repealed – but it was, it would seem, doing no more than ensuring that for more abundant caution it was understood that the right to bring proceedings was preserved. It was an accrued right, once the old Part 9.4B had been repealed. So it went on as an accrued right, and that is stated in 1473.
Now, we are concerned with 1370, which appears at 132, but I must take your Honours in the chronological order otherwise one gets lost – or I do, your Honours. Your Honours may not. At 176 under tab 6 is the Corporations (Commonwealth Powers) Act 2001 and this is a referral. Your Honours will recall that it refers a tabled text. In section 4 set out on page 178:
(1)The following matters are referred to the Parliament of the Commonwealth:
(a)the matters to which the referred provisions relate, but only to the extent of the making of laws with respect to those matters by including the referred provisions –
so it is a very limited referral.
(b) the matters of the formation of corporations –
as a result of the Corporations Case here being decided as it was –
corporate regulation and the regulation of financial products and services, but only to the extent of the making of laws with respect to those matters by making express amendments –
et cetera. I just wanted to make the point it was a very limited referral. Subsection (4) provided:
For the avoidance of doubt, it is the intention of the Parliament of the State that:
(a)the Corporations legislation may be expressly amended, or have its operation otherwise affected, at any time on or after the commencement day by provisions of Commonwealth Acts the operation of which is based on legislative powers that the Parliament of the Commonwealth has apart from the references –
Now, it might be said that under the corporations power the Commonwealth has power to pass laws similar to 232 and 243ZE and that they did not need the referral, but that is another matter, but it is important to note that as we pass through.
There was another Act – it is a State Act – called the Corporations (Ancillary Provisions) Act. What it did in section 6 at 182:
(1)The national scheme laws of this jurisdiction operate of their own force only in relation to:
(a) matters arising before the relevant time –
that is, 15 July 2001 when it came into force –
and
(b)matters arising, directly or indirectly, out of such matters,
in so far as those matters are not dealt with by the new corporations legislation –
Those matters, as we will find, are dealt with by the new corporations legislation. Therefore, the negative applies. That is, they do not operate of their own force in relation to those matters. So that is an appeal. There is an unusual provision in section 7(1):
To the extent that a national scheme law of this jurisdiction ceases to operate of its own force because of section 6, the effect is that which would have resulted had this Act and that law been Commonwealth Acts in relation to which the Acts Interpretation Act 1901 of the Commonwealth . . . applied.
That seems to be trying to give effect to it as Commonwealth law on the face of it but, on the other hand, another view might be – and it might be the correct view – that what it is doing is in effect saying that the scheme law still has effect but as if it was Commonwealth law and had the Acts Interpretation Act applied to it. Subsection (2) is important:
Despite subsection (1), if by force of Chapter 10 . . . a person acquires, accrues or incurs a right or liability in substitution for a pre‑commencement right or liability, the pre‑commencement right or liability is cancelled at the relevant time and ceases at that time to be a right or liability under a law of the State.
That has the effect, as we would see it, because that test was satisfied, that subsection (1) does not have any operation. Likewise, nor does subsection (3) and nor does it – I am sorry, subsection (3) is not relevant because it is referring to State proceedings and not federal proceedings, but section 7(2) is important in the exercise because it has the effect, in our submission, but the result of the State Act, that is the Corporations (Ancillary Provisions) Act 2001, all the State provisions were repealed. Not only had 232 gone and 243ZE under the CLERP Act in March 2000, but also Part 9.4B had ceased to have any operation of State law.
It becomes relevant to see what happens under the transitional provisions and they are set out under tab 6. I should read 1370 because it ‑ ‑ ‑
GLEESON CJ: Under tab 5 actually, I think.
MR ELLICOTT: Tab 5, I am sorry:
the object of this Part is to provide for a smooth transition from the regime provided for in the old corporations legislation of the States and Territories in this jurisdiction to the regime provided for in the new corporations legislation, so that individuals, bodies corporate and other bodies are, to the greatest extent possible, put in the same position immediately after the commencement as they would have been if:
(a)that old corporations legislation had, from time to time when it was in force, been valid Commonwealth legislation . . . and
(b)the new corporations legislation (to the extent it contains provisions that correspond . . . were a continuation of that old corporations legislation –
The relevant part would be (a):
as they would have been if:
(a)that old corporations legislation had, from time to time when it was in force, been valid Commonwealth legislation applying throughout those States and Territories . . .
(2)In resolving any ambiguity as to the meaning of any of the other provisions of this Part, an interpretation that is consistent with the object of this Part is to be preferred to an interpretation that is not consistent with that object.
It is then necessary to go over to 1384 which appears at page 150. It says:
(1)This section applies to a proceeding in relation to which the following paragraphs are satisfied –
Now, just stopping there, I omitted to tell your Honours that in April 2001 ASIC took proceedings against our clients. So that before this law came into force there were proceedings on foot in the Supreme Court of New South Wales brought by ASIC under the provisions of the CLERP Act is really the consequence of it, or it might be said the Interpretation Act (NSW), but whatever ‑ ‑ ‑
HAYNE J: Alleging breach of which provisions?
MR ELLICOTT: Alleging breach of sections 232 and 243ZE as civil penalty provisions. So at this point of time we are really answering the question which arose in that Corporations (Ancillary Provisions) Act. Whether the matters are dealt with under section 6 and whether there were substituted liabilities under section 7(2) of that Act, we are answering that, but also discovering whether or not they go far enough to constitute what we say would be a matter, but we say it could only be a matter if the proceedings – although they state 232 and 243ZE, they can only be a matter if there was a federal provision in force in 1998. Now, under (1):
This section applies to a proceeding in relation to which the following paragraphs are satisfied:
(a)the proceeding was started in a court before the commencement; and
(b)the proceeding was a federal corporations proceeding that related to a matter to which a provision of the old corporations legislation of a State or Territory in this jurisdiction applied –
That is dealt with, if one goes back to 1382 which defines “federal corporations proceeding” and (bc) says:
any other proceeding in relation to a matter to which a provision of the old corporations legislation of a State in this jurisdiction applied that was in the exercise of federal jurisdiction –
Now, this was an exercise of federal jurisdiction because ASIC was the Commonwealth, as your Honours have held, with the result that it was in federal jurisdiction, not that it was enforcing a law of the Commonwealth. There had been no law of the Commonwealth, no civil penalty proceeding. And it says:
(c)the proceeding had not been concluded or terminated before the commencement.
So the conditions in section 1384(1) were satisfied. In this section the proceeding is called a continued proceeding, and subsection (3):
Subject to subsection (4):
(a)the continued proceeding continues after the commencement in the same court as if it were, and always had been, a proceeding in relation to a matter to which the provision of the new corporations legislation that corresponds to the relevant old provision applies –
Going back to (1)(b):
the proceeding was a federal corporations proceeding that related to a matter to which a provision of the old corporations legislation of a State or Territory in this jurisdiction applied –
Well, that is satisfied by Part 9.4B. It may be satisfied by sections 232 or 243ZE. It is important to note that the definition of the “old corporations legislation” refers to it “as in force from time to time”.
HAYNE J: Where do we find that definition?
MR ELLICOTT: That, I think, goes back to 1371 at page 134:
old Corporations Law means:
(a)when used in relation to a particular State or Teritory – the Corporations Law of that State or Territory . . . as in force from time to time before the commencement –
Now, I do not think it is a concession on our part. That seems to pick up 232 and 243ZE as well as Part 9.4B. But it is only descriptive because at subsection (3) page 150 it is:
as if it were, and always had been, a proceeding in relation to a matter to which the provision of the new corporations legislation . . . applies; and
(b)to the extent that the proceeding, before the commencement, related to pre-commencement rights or liabilities, the proceeding, as continued, relates, and as so continuing is taken always to have related, to the substituted rights and liabilities in relation to those pre‑commencement rights or liabilities.
Now, this is where in that provision the complexities start to arise. I have to take your Honours to page 165, section 1401. Subsection (1) denotes the applicability of the provision:
This section applies in relation to a right or liability (the pre‑commencement right or liability), whether civil or criminal, that:
(a)was acquired, accrued or incurred under a provision of the old corporations legislation of a State or Territory in this jurisdiction that was no longer in force immediately before the commencement –
Now, it is important to bear in mind, in our submission, that neither sections 232 nor 243ZE of themselves conferred any right on ASIC. They were statements of norms, and I think this Court has described them as such. They were norms for conduct. But there was a warning in the provision that if you breached them you could be sued for contravention. That, however, did not change their character as norms. So when one looks at page 166:
(a)was acquired, accrued or incurred under a provision of the old corporations legislation . . . that was no longer in force –
ASIC’s right was acquired or accrued under Part 9.4B, and Part 9.4B was no longer in force immediately before the commencement. Why? Because I took your Honours to the CLERP Act, and the CLERP Act said, notwithstanding its repeal, it continued in operation for the purposes of proceedings. That meant that it satisfied the description, it was no longer in force immediately before the commencement, and I do not understand there to be any debate about that, and was in existence immediately before the commencement.
Now, what had to be in existence was the “right or liability”, “civil”. That “was in existence immediately before the commencement”. So this provision applies. This provision applies, they being rights that existed prior to the commencement of this Act:
(2)For the purposes of subsections (3) and (4) the new corporations legislation is taken to include:
(a)the provision of the old corporations legislation . . . under which the pre‑commencement right or liability was acquired, accrued or incurred –
So that Part 9.4B is there and that is the one that enabled ASIC to go to the court to get declarations but in itself it gave no content to what might be the subject of the proceedings:
(b) the other provisions of the old corporations legislation . . . that applied in relation to the pre‑commencement right or liability.
Now, our primary submission is that although we have made, it seems, a concession in our submissions that 240 to 232 and 243ZE were picked up and continued by those provisions it is open to question, in our submission, that they do because when it talks about “applied in relation to the pre‑commencement right or liability” although the words “in relation to” are very wide, notwithstanding that, this is not a provision, we would submit, that does other than pick up provisions as to limitation that operated in relation to the right or the liability accrued. That may be wrong, but that is our primary submission.
HAYNE J: But thus far you have tended in your submissions to focus on what you describe as the right of ASIC to bring the proceeding.
MR ELLICOTT: Yes.
HAYNE J: What about the liability of the person of the person who is alleged to have been in contravention of 232 or the other alphabetical provision?
MR ELLICOTT: We say, after one examines this, and I have to go on to (3), that if (b) does have the effect of including 232 and 243ZE, if it has that effect, and that may be a view your Honours would prefer, then those sections just operate from the commencement of the Act. It says:
the new corporations . . . is taken to include –
those other provisions. If you go to (3):
On the commencement, the person acquires, accrues or incurs a right or liability (the substituted . . . equivalent to the pre‑commencement right or liability, under the provision taken to be included in the new corporations legislation by paragraph (2)(a) –
What that does is only pick up Part 9.4B which gives ASIC the right to take proceedings, and one might conclude that it also incurs – or my clients incur a liability equivalent to their liability under Part 9.4B to be subject to proceedings as such. It then goes on and says:
(as if that provision applied to the conduct or circumstances that gave rise to the pre-commencement right or liability).
Those words in themselves only pick up the circumstances and they do not pick up a provision which operated in 1998 as federal law which they contravened. It picks up the facts but it does not pick up the contravention of a law. We submit that the effect of these provisions is that looking at them as proceedings to enforce a civil penalty provision that, although it is clear that ASIC has a right to take proceedings, the nub of the proceeding has to be the contravention of a civil penalty provision. The nub of the provision has to be the contravention of a civil penalty provision in force when the acts were committed.
They may have intended to do it but, in our submission, they did not succeed. In other words, they did not impose a liability that was a liability operating at the time. They could have passed a law which made the equivalent of sections 232 and 243ZE retrospective. We are not here to argue about Polyukhovich’s Case. We accept that the Parliament can pass retrospective laws but they are not passed. In some of the submissions, I think the Commonwealth’s submissions, there is a view expressed that these are in effect retrospective.
The way in which they seek to explain what these provisions do is to rely on cases like In re Macks and In re Humby. I will have to take your Honours to that but we say that there is a lacuna in the legislation. It just fails to get there. In other words, in trying to interpret what has happened, to continue the way in which this Corporations Law would flow on into the future as Commonwealth law, they have sought to invent these transitional provisions in a way that will – in our submissions we use the word “transmogrify” but somehow as if by magic to convert what was a State liability into a Commonwealth liability. We say you cannot do that except in conventional ways, and that is by imposing on the people involved a contravention of federal law as at the time they committed the contravention. That notion obviously is equally applicable to both civil and criminal penalties.
The lacuna, of course only came about on 15 July 2001 because up till that time ASIC had the right, which was an accrued right, to bring the proceedings which they had commenced in April 2001. We have developed our argument in paragraphs 70 to 86. I do not propose to read that out, but the summary is really this, that the nub of the proceeding had to be a contravention of a federal law and there was no federal law when you construe these provisions which operated in 1998.
Now, there have been three cases where these provisions have been considered by the Court of Appeal in New South Wales, Queensland and the Full Court of the Federal Court. In the case of Corbett in Queensland – I will not take your Honours to the judgment because the passages are set out in paragraph 63 which seek to describe what happened. I point out that in Frawley Chief Justice Spigelman adopted this, although he did not like the reference to “deeming”:
[24] The referral was relevantly in the terms of s 1401. It may be described, generally, as a referral of an existing liability to a State. But the way in which this was done was to deem persons who had incurred a liability to the State under ss 1064 and 1331 of the law, on the date of commencement, to incur a liability to the Commonwealth equivalent to and in substitution for the liability which they previously had (s 1401(3); and for that purpose to deem the Act to include s 1064 and s 1311 (s 1401(2)(a).
[25] If that is the correct construction of the referral and of s 1401, it can be seen that it does not enable the Commonwealth to prosecute a State offence. What the referral does is to refer to the Commonwealth power to make laws in respect of what were, at the time of referral, existing liabilities for offences against State legislation; and to do so by deeming those liabilities to be liabilities for equivalent offences against Commonwealth legislation. And that is what s 1401 does.
Now, in our submission, that is not correct. In our submission, yes, there was a referral and the referral was very strict and confined and it has a sunset clause, but the referral had a tabled text and it contained these transitional provisions, but in no way, we would submit, can you describe it as deeming something to be something else, that is deeming an offence under State law to be an offence under Commonwealth law.
HAYNE J: Given that it was a reference of a tabled text, what is different between this Act and what was considered by the Court in In re Macks in the sense that there the legislation in question took, or established rights, liabilities, obligations and the like as if certain things had been valid. Now, what is the difference in process between what is being done here and what was considered in Macks?
MR ELLICOTT: It was an entirely different process. In re Macks was a case like In re Humby which followed Kotsis v Kotsis and for instance, in In re Humby there were all those orders by masters under the Matrimonial Causes Act and if your Honours read the detail of In re Humby, and I refer to it first because it is line with In re Macks, they say that under that case, under that legislation, the Commonwealth Parliament was doing no more than passing a law which it could pass, that is, in relation to divorce and the rights and liabilities that might arise on divorce. It was common, as we know, for there to be special Acts of Parliaments in relation to divorce in earlier days.
So under the divorce power, the Commonwealth had power to pick up what were really findings in proceedings and enact them into law and, therefore, it was within power to do so. Likewise in In re Macks, it was State legislation, of course, and that was legislation which flowed from Wakim’s Case and, likewise, the State had power to pick up the orders that had been made by the Federal Court and they were orders which could be made within State jurisdiction and then to legislate about them. They gave them the force of law, but provided, in effect, for appeals from them to State courts. So that what it was doing was picking up something that was within legislative competence as to the very substance of the law.
Now, obviously, there had been no finding in these proceedings and all that there was on the face of it was a proceeding in relation to a breach of State law prior to 15 July 2001. After that date the State law had fallen away and there needed to be a provision which would make that a breach of federal law. It could not become a federal law simply saying we give validity to these proceedings as if the proceedings were instituted in accordance or with the force of or with the support of federal law, unless that law itself, that is the Commonwealth law, picked up the actions and subjected them, that is in 1998, to an embargo under Commonwealth law, and that they never did and that is the difference and In re Humby does not touch this question, in our submission. It is obviously relevant. One case that we wanted to ‑ ‑ ‑
HAYNE J: Just before you go to that case, if you were to read these transitional provisions as having the following effect in federal law, the director or officer of the company concerned will now have whatever liability that director or officer had under the former State law, what would follow from such a reading of the transitional provisions?
MR ELLICOTT: You would have to turn that into – this would be the question: could you read that as a statement to this effect? If you breached a State provision in 1998, you are to be treated as if there was in operation in 1998 a federal law with the same consequence. That, we would submit, would not necessarily answer the question.
HAYNE J: That seems to be a sideways attack on Polyukhovich.
MR ELLICOTT: No, with respect. There is a presumption against retrospectivity obviously and one does not easily decide that issue unless there is a clear statement of legislative intent. These words are, in our submission, not ambiguous; they just do not go far enough. There was a clear way to do it and they did not do it. The clear way was simply to say those provisions are deemed to be federal law and they are deemed to have been in force in 1998 or at the time where the circumstances to which these proceedings relate, as they are referred to in that provision I referred to, arose. But you will not find that in the relevant section.
In In re Macks 204 CLR 158, at paragraph 15 your Honour the Chief Justice said:
Central to the reasoning of the Court was the conclusion that the legislation did not purport to validate the invalid decrees but, rather, established, as was within legislative competence, rights, liabilities, obligations and status of persons. Historically, divorce was commonly effected by private Act of Parliament. The Parliament’s power to make laws with respect to divorce extends to power to dissolve a particular marriage. It has power to declare that the rights and liabilities and status of persons whose marriages were purportedly but ineffectively dissolved by a person acting without jurisdiction are to be as if the dissolution had been by a person with jurisdiction. Similarly, it may be observed, the Parliaments of South Australia and Queensland have power, by legislative enactment, to wind up particular companies, or to declare that the rights and liabilities of persons in respect of an ineffective winding up order will be the same as if a winding up order had been made by a person with jurisdiction to do so.
We would submit that when we look at the relevant provision, 1401, it does not do that. It says:
the new corporations legislation is taken to include:
(a)the provision of the old corporations legislation . . . under which the pre-commencement right or liability was acquired –
that is Part 9.4B and it can have no content unless it fixes on a civil penalty provision. It does not operate of its own force.
On the commencement, the person acquires, accrues or incurs a right or liability . . . equivalent to the pre‑commencement right –
and that pre‑commencement right is a right to bring proceedings, given the breach of a civil penalty provision, but if it is a civil penalty provision that is equivalent to sections 232 and 243ZE then one must find it in the federal law to pick it up and make the breach of it in 1998 a breach of a civil penalty provision. Those provisions do not do that. They do not go far enough. They head in that direction and there are no words there, in our submission, which you can pick up and apply 1370 and say, “They are ambiguous and that is what they really meant.”
The legislation does not equate, in our submission, with Humby and Macks because they fixed on events which had occurred and picked them up and legislated them into force. This does not do that in relation to the critical matter, which is the breach of civil penalty provisions, and 2(b) which says:
the new corporations legislation is taken to include:
. . .
(b)the other provisions of the old corporations legislation . . . that applied in relation to the pre‑commencement right or liability –
does not pick them up as retrospective provisions. In Kennedy’s Case 142 FCR 243 at 355 and 356, 357 and 358, and 358 and 359 their Honours held at paragraph 67 at page 358:
On their proper construction, the transitional provisions do not have the retrospective effect for which Mr Kennedy contends . . .
Putting it another way, on the assumption that Mr Kennedy gave false evidence, that would have had the legal consequence, as at 14 July 2001, that he was liable to be prosecuted under s 64 of the ASC Law. On the same assumption, by virtue of the operation of s 279 of the 2001 ASIC Act, on 15 July 2001 Mr Kennedy became liable to be prosecuted under s 64 of the 2001 ASIC Act because s 64 of the 2001 ASIC Act corresponds with s 64 of the ASC Law . . .
That does not involve giving s 64 of the 2001 ASIC Act retrospective operation. The transitional provisions do not make the legislation operate retrospectively: rather, they create present liabilities by reference to historical facts, namely, the existing liability –
In our submission, whatever consequence that had in that case, that is not this case. They do not pick up a fact and legislate it into existence and say that is an existing liability. It does not do that. The only liability that it gives effect to, or any right, is the right to commence proceedings. So, your Honours, in our submission, the provisions are not sufficient to cover acts in 1998 and did not in that respect justify the proceedings being dealt with by Acting Justice Foster.
There is in Hooper’s Case 91 CLR 529 some reference to this type of situation and, in a sense, Hooper’s Case might be said to be in the same area of discourse, but when it deals with the particular legislation there, it does not adequately, in our submission, support the propositions that my friends must depend on in this case. The relevant passage is at the foot of page 535:
The essence of the argument against validity is that a “matter” cannot “arise” under a law made by the Parliament unless there is a substantive law made by the Parliament conferring rights or imposing duties, and that it is only “with respect to” substantive rights or duties so created by federal law that State courts can be validly invested with federal jurisdiction. This broad major premise may probably be accepted as substantially correct.
That in a sense sums up our argument. We are saying that you cannot have a matter arising unless there is a substantive law made by the Parliament conferring rights –
But it is necessary to remember that a substantive statutory right may, as a matter of drafting, be created by more than one method. According to accepted canons of drafting, the best method, wherever it is practicable, is to keep substantive and adjective matters distinct ‑ ‑ ‑
GLEESON CJ: Mr Ellicott, do you remember a principle that was stated in R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett 70 CLR where Chief Justice Latham and Justice Dixon both dealt with this point. Justice Dixon said, for example, particular legislation:
must be taken to perform a double function, namely to deal with substantive liabilities or substantive legal relations and to give jurisdiction with reference to them. It is not unusual to find that statutes impose liabilities, create obligations or otherwise affect substantive rights, although they are expressed only to give jurisdiction or authority ‑
and he refers this to a trick of drafting.
MR ELLICOTT: Yes, well that is a well-known proposition.
GLEESON CJ: Yes.
MR ELLICOTT: And their Honours in Hooper go on to describe that situation, but it is not this situation. The Testator’s Family Maintenance Act or the Family Provision Acts do the same thing. They create the right and ‑ ‑ ‑
GLEESON CJ: Provide the remedy.
MR ELLICOTT: Provide the remedy in the one sentence, in effect. That is well known, but that is not this case. By this case I mean this case we are arguing, not Hooper’s. Hooper was that case, and that is why it is relied on, but that statement at page 535, we submit, is very informative because it accepts the proposition that there has to be a substantive law made by the Parliament conferring in this case rights or imposing duties, and it is the imposing of duties which is missing here in adequate terms. They go on to say:
According to accepted canons of drafting, the best method, wherever it is practicable, is to keep [them separate] . . . But this is not invariably the simplest or easiest course to follow, and it is by no means uncommon –
and, in effect, they endorse that principle.
GLEESON CJ: Is the argument that this legislation continues the liability, but does not continue the obligation?
MR ELLICOTT: It continues the right to proceed, but does not continue the obligation and not the breach of particular norm that is the argument and that, therefore, fails to satisfy a basic constitutional requirement. It is not a matter because there is no liability to be enforced. It is a question of construction that leads into a Chapter III issue. The construction is difficult, but I would submit that it requires some agility of mind in order to get to the result that they have succeeded in creating a liability. That is a liability on my clients which can be the subject of the continued proceedings.
Your Honours, I do not want to embarrass my friend, but that is all we - at 10 past 4 ‑ ‑ ‑
GLEESON CJ: Thank you, Mr Ellicott. Yes, Mr Gageler.
MR GAGELER: Your Honours, I can deal in 10 minutes, I think, with the transitional provisions point. It will take me a little longer on the acting judges point. On the transitional provisions point, can I proceed by identifying three things in order. The first is the position as at 14 July 2001 in terms of the rights and liabilities of the parties which had at that time accrued and the matter which founded the jurisdiction of the Supreme Court in the proceedings which were then on foot.
The second is the operation of section 1401 on and from 15 July 2001 by reference to those previously accrued rights and liabilities. The third is then the matter which founded the jurisdiction of the Supreme Court in the proceeding which was continued in that court on and from 15 July 2001 by operation of section 1384 of the Corporations Act. I will do this economically but I cannot be precise without being a little tedious.
As at 14 July 2001 the rights and liabilities of the parties were governed relevantly by section 1317EA of the State Corporations Law repealed but continued in force by section 1473 of the State Corporations Law operating upon section 232 and section 243ZE of the State Corporations Law repealed but continued in their application to past conduct by section 10 of the State Corporations Act picking up the text of section 8(b) of the Acts Interpretation Act (Cth), the general provision that says despite a repeal, an Act is taken still to have applied to past conduct.
The rights and liabilities which had as at 14 July 2001 accrued consistently, in our submission, with Esber v Commonwealth 174 CLR 430 at 440 and the cases there cited recently considered by your Honours in a case reported in 213 CLR 485. It has one of those long industrial names. Consistently with that analysis, there were rights of ASIC, albeit inchoate and contingent, to obtain remedial orders under section 1317EA for contravention of section 232 or 243ZE, as the case may be, and there were corresponding liabilities, again inchoate and contingent, on the part of Mr Ellicott’s client in respect of such remedial orders.
The jurisdiction of the Supreme Court as at 14 July 2001 to determine and enforce those rights and liabilities in the proceedings which were then on foot, ASIC, relevantly the Commonwealth being a party, was that conferred under section 77(iii) of the Constitution by section 39(2) of the Judiciary Act read with section 42(1) of the State Corporations Act which conferred jurisdiction on the Supreme Court in civil matters arising under the Corporations Law.
The power which was conferred by section 1317EA of the State Corporations Law to grant remedies being picked up and applied in federal jurisdiction by section 79 of the Judiciary Act, all of that flows, we think, as a straight application of the reasoning of this Court in Edensor 204 CLR 559. The matter which at that time, that is as at 14 July 2001, founded that jurisdiction, in our submission, was properly identified as the justiciable controversy arising from the disputed contention of ASIC that it had a present legal entitlement to an order under section 1317EA upon a finding by the Supreme Court of a past contravention of section 232 or 243ZE, as the case may be.
Authority for that can be found in Edensor itself, in particular paragraphs 54 and 56. Your Honours might also note the consistency of that with the statement in Abebe 197 CLR 510 at paragraph 32. Your Honours, if I have another five minutes I can finish this point.
GLEESON CJ: Very well.
MR GAGELER: One then comes to the operation of section 1401 of the Corporations Act on 15 July 2001. That effect, in our submission, was by subsection (1) to look at rather than to pick up the rights and liabilities, inchoate and contingent, as they existed on 14 July 2001, and to label them pre‑commencement rights or liabilities, then by subsection (2), for the limited purposes of subsection (3), to incorporate into the new Corporations Law, that is, into the Commonwealth legislation, the text of the provisions of the State law which had given rise to those pre‑existing rights and liabilities, that is, to make a federal carbon copy of, relevantly, section 1317EA and 232 or 243ZE. We see both of those as coming within paragraph (a) but certainly the latter within paragraph (b) of subsection (2).
Our learned friend’s submission that paragraph (b) is simply concerned with limitation periods is an impossible one given the existence of section 1402, over the page, which is concerned with limitation periods.
Then in section 1401(3) the effect was to create under the provisions incorporated into the new Corporations Law, that is, under the new Commonwealth provisions, new and substituted rights and liabilities equivalent to the old in the sense explained in the bracketed words in subsection (3), that is, the incorporated provisions, a Commonwealth carbon copy was to apply as if they applied to prior conduct that gave rise to the pre‑existing rights and liabilities.
Now, does that operate by reference to a fiction? Yes, that is what the words “as if” are intended to do. Does it operate retrospectively? Well, it depends what you mean by “retrospectively”.
GUMMOW J: It provides for present and future consequences as to past acts.
MR GAGELER: Absolutely.
GUMMOW J: And Sir Frederick Jordan says somewhere or other that that is not necessarily using the term “retrospective”.
MR GAGELER: No, that is right. What it does not do is what the legislation in Kidman did and what the legislation in University of Wollongong v Metwally did and that is to say that the law at an earlier date than the date of enactment was to be taken to be something other than it was.
GUMMOW J: I think it is the Shell Case in 45 or 46 State Reports.
MR GAGELER: That is right. Your Honours mentioned ‑ ‑ ‑
KIRBY J: It does not have the offensiveness of, as it were, creating something out of nothing. There was something before. I mean, one can see in, say, Polyukhovich some concern about creating as an offence something that was not by Australian law an offence before, but that is not this case.
MR GAGELER: No, and, your Honours, the distinction between the two sorts of retrospectivity was Coleman v Shell Co of Australia 45 SR (NSW) 27 at 30 noted by your Honour Justice Gummow and Justice McHugh in SCI Operations 192 CLR 285 at paragraph 57. But one model rather than the other was chosen and the model that was chosen was the In re Macks; Ex parte Saint model.
I think I can in one minute then describe the matter which subsequently existed. There was on and from 15 July 2001 jurisdiction conferred on the Supreme Court, again under section 77(iii) of the Constitution, to determine and enforce the newly created rights and liabilities, that is newly created under section 1401(3), simply by reason of the general provision of the Corporations Act by which the Supreme Court has jurisdiction in all matters arising under the new corporations legislation. Your Honours do not have this. It is section 1337B(2) of the Corporations Act (Cth). It sounds like an amendment, but it was not.
The matter that on and from 15 July 2001 founded that jurisdiction, in our submission, is properly identified as the justiciable controversy arising from the disputed contention of ASIC of an entitlement to orders under the substituted carbon copy section 137EA for breach of the substituted carbon copy section 232 or 243ZE, as the case may be, as those provisions are incorporated under section 1401(2) and as they are to be applied according to the fiction in section 1401(3). Your Honours, that is it.
GLEESON CJ: We will adjourn until 10.15 tomorrow morning.
AT 4.23 PM THE MATTERS WERE ADJOURNED
UNTIL WEDNESDAY, 8 FEBRUARY 2006
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