Forsyth v Deputy Commissioner of Taxation

[2006] HCATrans 99

[2006] HCATrans 099

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S543 of 2005

B e t w e e n -

ROSS FORSYTH

Appellant

and

DEPUTY COMMISSIONER OF TAXATION

Respondent

Summons for directions

GLEESON CJ

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 7 MARCH 2006, AT 1.31 PM

Copyright in the High Court of Australia

MR R.L. HAMILTON:   Your Honour, I appear for the appellant with my learned friend, MS R.L. SEIDEN.  (instructed by Paul Bard Lawyers)

MR D.M.J. BENNETT, QC, Solicitor‑General of the Commonwealth of Australia:   If your Honour pleases, I appear for the respondent.  (instructed by Australian Government Solicitor)

MS R.A. PEPPER:   If it please the Court, I appear for the Attorney‑General for New South Wales intervening.  (instructed by Crown Solicitor for New South Wales)

HIS HONOUR:   Mr Solicitor, this matter has been put in for directions at your request, I think.

MR BENNETT:   Yes.

HIS HONOUR:   Are there any particular directions you seek?

MR BENNETT:   Your Honour, it is really to…..The appellant has sought and listed before the Court on Thursday, concurrently with the hearing of the appeal, leave to have special leave to appeal on an additional ground.  That raises a number of problems for us.

HIS HONOUR:   I would have thought the first question it raises is whether the matter is going to go ahead on Thursday.

MR BENNETT:   Your Honour, the issues are quite discrete.  If it were thought that there were any possibility of the motion succeeding, the appropriate course would be for the Court to indicate in some way prior to Thursday that under no circumstances would the substantive argument on the new point proceed on Thursday, because it puts us in an impossible position if two days before the hearing we have to prepare a very substantial constitutional case of a totally different nature.

It is true that some of the issues are similar to those raised in Forge but the essential issue is different, being not so much the issue of whether an acting judge can validly sit but whether the institutional nature of the court is so affected.

HIS HONOUR:   I will have to ask Mr Hamilton this question in due course but I am not sure myself exactly what the issue is.  In Forge the argument was that section 37 of the Supreme Court Act (NSW) was invalid. In Kable the argument was that a piece of New South Wales legislation relating to Mr Kable ‑ and I think only to Mr Kable – was invalid.  I am not quite sure what Mr Hamilton says is invalid.

MR BENNETT:   Your Honour, my understanding is that he does not need to say anything is invalid. What he says is that the number of acting judges is such that the District Court is not an appropriate repository within the meaning of the Constitution.

HIS HONOUR:   What follows from that?

MR BENNETT:   Your Honour, presumably that the decision, along with every decision of any judge of the court for some time, is invalid, certainly in the exercise of federal jurisdiction.

HIS HONOUR:   Anyway, your position is that if Mr Hamilton were to obtain leave to add this ground of appeal, which involves special leave to raise this ground, I presume ‑ ‑ ‑

MR BENNETT:   Yes, your Honour.

HIS HONOUR:   ‑ ‑ ‑ you would not be ready to proceed on Thursday?

MR BENNETT:   Precisely, your Honour.  We do not want to be in the position that we turn up on Thursday, have an argument on amending the grounds of appeal and if he succeeds knowing that we might go on.  That is the possibility which we want to avoid and for which we have sought directions.

HIS HONOUR:   I will see what Mr Hamilton has to say and I will see what Ms Pepper has to say also.

MR BENNETT:   Yes, if your Honour pleases.

HIS HONOUR:   Mr Hamilton, what exactly is the proposition for which you contend as distinct from the reasons for which you contend for it?

MR HAMILTON:   The Solicitor‑General has put it admirably that ‑ ‑ ‑

HIS HONOUR:   I am afraid I have not understood it then.  Forge involved an argument that a particular section of the Supreme Court Act was invalid.  Kable involved an argument that an entire Act of the New South Wales Parliament was invalid.  What exactly is your argument?

MR HAMILTON:   That this decision of the District Court is invalid because it cannot exercise federal jurisdiction.

HIS HONOUR:   I know you say it cannot exercise federal jurisdiction, but do you say that some provision of any Act of Parliament, State or federal, is invalid?

MR HAMILTON:   No, we do not put it like that.

HIS HONOUR:   You do not say that the appointment of the judge who decided the case was invalid?

MR HAMILTON:   No, we do not.

HIS HONOUR:   Do you say the District Court Act is invalid?

MR HAMILTON:   No, we do not.

HIS HONOUR:   So you have a judge who is appointed as a judge of the District Court makes a decision and you say the decision is not binding on you?

MR HAMILTON:   Yes, on the basis that 35 out of 100 judges were acting judges during the year in which the decision was given.

HIS HONOUR:   You are not suggesting that 35 per cent of the judges were acting judges, are you?

MR HAMILTON:   Yes.

HIS HONOUR:   Were they all appointed for a year?

MR HAMILTON:   Yes.

HIS HONOUR:   Each of the judges was appointed for the whole of the year?

MR HAMILTON:   This is our understanding from the District Court annual review for 2003.

HIS HONOUR:   Mr Hamilton, this is not a point that was taken at first instance.

MR HAMILTON:   No.

HIS HONOUR:   Is it a point that was taken on appeal?

MR HAMILTON:   It was not.

HIS HONOUR:   Is there the possibility that evidence might be relevant to the point that you are taking?

MR HAMILTON:   Yes, but we say the evidence is the District Court annual reports.

HIS HONOUR:   Any evidence about the circumstances in which these people were appointed?

MR HAMILTON:   We do not have any evidence, no.

HIS HONOUR:   Would it be relevant to your point to know why these people were appointed?

MR HAMILTON:   No.

HIS HONOUR:   So you say it would not matter in what circumstances they were appointed?

MR HAMILTON:   In this particular set of circumstances, no.  We take the point that was made in Forge that in exceptional circumstances acting judges may be acceptable but when you have 35 acting judges ‑ ‑ ‑

HIS HONOUR:   Acceptable to whom?

MR HAMILTON: Acceptable to Chapter III of the Constitution to exercise federal jurisdiction. A court which had an acting judge could have federal jurisdiction invested in it.

HIS HONOUR:   The judge who made this decision was not an acting judge, is that right?

MR HAMILTON:   No, he was not.

HIS HONOUR:   Your argument, I take it, is that there was something about the purported conferral of federal jurisdiction on the District Court that produces the consequence that it was inoperative?

MR HAMILTON:   Yes.

HIS HONOUR:   The purported conferral of jurisdiction on the District Court was by federal legislation, was it?

MR HAMILTON:   Yes, section 39(2) of the Judiciary Act.

HIS HONOUR:   Is it your proposition that section 39(2) of the Judiciary Act is invalid?

MR HAMILTON:   No, not at all.

HIS HONOUR:   What is then the step by which one reaches the conclusion that the purported conferral of federal jurisdiction was ineffective?

MR HAMILTON: That Chapter III of the Constitution and section 39(2) invest State courts with jurisdiction and that the body or institution which is invested with the jurisdiction must meet the basic requirements of a court, that is, security of tenure and remuneration for the judges.

HIS HONOUR:   It sounds to me, Mr Hamilton, that your argument might become a little clearer in the light of the ultimate decision in Forge and the Solicitor‑General says that he is not ready to meet your argument, whatever exactly it is, on Thursday.  A course that occurs to me is a possibility is simply to stand the matter out of Thursday’s list and await the decision in Forge and see whether in the light of that decision you wish to pursue this argument or perhaps refine it in some way.

MR HAMILTON:   We are in the Court’s hands.  That will be acceptable.

HIS HONOUR:   Let me see what Ms Pepper has to say and then I will come back to the Solicitor‑General.

MS PEPPER:   Your Honour, the position of New South Wales is the same as that of the Commonwealth in terms of preparedness to be able to meet this type of argument which has really only been fully elucidated today in this courtroom.  It would be very difficult, if not almost impossible, to be ready by Thursday to meet such an argument.  Insofar as your Honour’s suggestion about standing the matter down, again we are in the Court’s hands in that regard, but that would certainly be acceptable to the Attorney‑General intervening.

HIS HONOUR:   Thank you, Ms Pepper.  Mr Solicitor.

MR BENNETT:   Your Honour, we would not support that course.  What we would submit is appropriate would be for the rest of the matter to proceed on Thursday because, of course, if the construction argument ‑ ‑ ‑

HIS HONOUR:   That seems to assume, Mr Solicitor, that this Court has two days to devote to this piece of litigation.

MR BENNETT:   No, your Honour.

HIS HONOUR:   Why should we deal with this piece of litigation in two bites?

MR BENNETT:   Well, your Honour, because if your Honours decide the construction point in favour of my learned friend, of course, the other point falls away.

HIS HONOUR:   And if we decide the construction point in your favour?  We come back on some later occasion and argue the new point?

MR BENNETT:   Well, we come back on some later occasion to hear an application to amend the special leave application.

HIS HONOUR:   If the application is successful, we will ‑ ‑ ‑

MR BENNETT:   If that succeeds, yes, your Honour.

HIS HONOUR:   ‑ ‑ ‑ have ended up devoting two days to this piece of litigation.

MR BENNETT:   But, your Honour, the litigation, assuming both points were ultimately to be argued, would take two days in any event.  Each is a one‑day point.  The construction point is a one‑day point and the constitutional point, if leave were to be granted, is a one‑day point.  So that happens in either event.  There is no time saved by the two parts being heard at the same time.

HIS HONOUR:   There will be the time saved that would be involved in thrashing around on Thursday trying to work out exactly what is involved in this new argument, time that might be saved after the parties, including Mr Hamilton, have had an opportunity to read what the Court ultimately says in Forge. 

MR BENNETT:   Well, your Honour, one way of dealing with that would be to proceed with the matter on Thursday and stand over my learned friend’s application in relation to additional grounds of special leave to be dealt with by a special leave court on a special leave occasion in the ordinary course.  That would occur ideally (a) after judgment on the construction point and (b) after the decision is handed down in Forge, either of which events might make my friend’s application academic.

HIS HONOUR:   You are acting for the Deputy Commissioner of Taxation in this matter?

MR BENNETT:   Yes, your Honour.

HIS HONOUR:   Is there any problem that confronts your client if the course that I pursue is taken?

MR BENNETT:   Well, only, your Honour, that we lose a fixture for which we are prepared and ultimately it will take longer for the matter to be resolved, because there are three possible contingencies which would prevent the second leg of the case proceeding.  The first is that my learned friend wins the construction issue; the second is that he loses his special leave application and the third is that Forge is decided in such a way as to make his argument untenable.

HIS HONOUR:   Do you contemplate as a possibility that we would hear argument on the construction issue on Thursday, reserve our judgment, give a decision in that and after we have given a decision in that, we then look at the application for special leave to appeal on this new point?

MR BENNETT:   Yes, your Honour.

HIS HONOUR:   Is there anything else you want to say?

MR BENNETT:   No, your Honour.

HIS HONOUR:   Very well then.  What I propose to do is stand this matter out of the list on Thursday and it can be restored to the list after this Court’s decision in Forge has been delivered.  Mr Hamilton, I am doing this on the assumption that when you have had a look at the Court’s decision in Forge, you will consider whether you wish to proceed with this proposed new point and perhaps consider in the light of that decision exactly what the new point is.

MR HAMILTON:   Yes, your Honour, thank you.

HIS HONOUR:   What I do not intend is that we end up with the result that this Court devotes a divided hearing time to this piece of litigation.

MR BENNETT:   I am sorry, your Honour, might I just put one other possibility to the Court, and that is this, that on Thursday morning the Court hears the application to amend the special leave application.  If that fails, it proceeds with the construction issue on Thursday.

HIS HONOUR:   Mr Solicitor, it is perfectly obvious that this point was prompted by somebody reading the transcript of the argument in Forge.  Forge’s Case has been pending in this Court for months and months and anybody who wanted to take a point based on the use of acting judges in the District Court has had months of notice of the availability of that point. 

Whatever the argument exactly is, it seems to have been prompted by some reading of the transcript of argument in Forge.  That is often a very unsatisfactory basis upon which to formulate a legal argument and it seems to me quite likely that, once the Court ultimately gives its reasons for decision in Forge, there will be a better level of appreciation on all sides of exactly what the prospects are of any successful argument of the general nature of an argument that the appellant wants to raise. 

What I do not want is a situation where, as I said, we are thrashing around on Thursday with an application for special leave to appeal to raise an argument which, to put it bluntly, may not yet have been precisely formulated.

MR BENNETT:   If your Honour pleases.  Your Honour, the only other matter is that I seek an order for costs, including the costs thrown away by the vacation of the hearing date.

HIS HONOUR:   Well, you may ultimately be entitled to such an order, but I will reserve that question.  What I propose to do is have the matter listed for me again for directions.  I will stand over your summons for directions, including any question of costs in relation to those directions, and have the summons for directions – I will indicate to the Registrar that the summons for directions should be relisted for further hearing before me after the Court has given its judgment in Forge.

MR BENNETT:   Would your Honour certify for ‑ ‑ ‑

HIS HONOUR:   Yes, certainly.

MR BENNETT:   Yes, if your Honour pleases.

HIS HONOUR:   Then what I will do is stand the appeal out of Thursday’s list.  I will stand over the respondent’s summons for directions to a date to be fixed before me after the Court has given its judgment in Forge.  I will reserve any questions of costs in relation to today to be dealt with at the future hearing of the summons for directions, and I will certify for counsel.

MR BENNETT:   If the Court pleases.

HIS HONOUR:   The Court will adjourn.

AT 1.50 PM THE MATTER WAS ADJOURNED