Gould v Magaret & Ors; Albarran v Members of CALDB & Anor; Visnic v Australian Securities and Investments Commission

[2007] HCATrans 5

[2007] HCATrans 005

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S361 of 2006

B e t w e e n -

VANDA RUSSELL GOULD

Appellant

and

DONALD MAGAREY, DAVID OLIFANT AND PATRICK PONTING BEING THE MEMBERS CONSTITUTING THE COMPANIES AUDITORS & LIQUIDATORS DISCIPLINARY BOARD

First Respondents

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Second Respondent

Office of the Registry
  Sydney  No S356 of 2006

B e t w e e n -

RICHARD ALBARRAN

Appellant

and

MEMBERS OF THE COMPANIES AUDITORS AND LIQUIDATORS DISCIPLINARY BOARD

First Respondent

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Second Respondent

Office of the Registry
  Sydney  No S389 of 2006

B e t w e e n -

MILAN VISNIC

Applicant

and

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Respondent

GLEESON CJ
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
HEYDON J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 30 JANUARY 2007, AT 10.18 AM

Copyright in the High Court of Australia

__________________

MR B.W. WALKER, SC:   May it please the Court, in the first of the matters, Gould, I appear with my learned friends, MR P.J. BRERETON and MR P. KULEVSKI, for the appellant.  (instructed by Henry Davis York)

MR N. PERRAM, SC:   May it please the Court, in the second matter, Albarran, I appear with my learned friend, MR A.D. CROSSLAND, for the appellant. (instructed by NOT Lawyers)

MR A.W. STREET, SC:   May it please the Court, in the third matter, Visnic, I appear for the plaintiff with my learned friend, MR G.D. WENDLER.  (instructed by Van Houten Law)

MR H.C. BURMESTER, QC:   If it pleases the Court, I appear for the Attorney‑General of the Commonwealth in the first two matters with my learned friend, MS K.L. EASTMAN, and in the third matter with my learned friend, MR G.M. AITKEN.  (instructed by Australian Government Solicitor)

GLEESON CJ:   Mr Street, were you able to agree with counsel for the other parties on an arrangement about time?

MR STREET:   Yes, your Honour.

GLEESON CJ:   You got cut a bit short yesterday and I did not want any repetition of that today.

MR STREET:   If the Court pleases.

GLEESON CJ:   Yes, Mr Walker.

MR WALKER:   May it please the Court.  Your Honours, the issue we raise as to whether the task given by section 1292 of the Act to the Companies Auditors and Liquidators Disciplinary Board is invalid as beyond the power of the Commonwealth Parliament by reason of the nature of that body compared ‑ ‑ ‑

KIRBY J:   You are not mounting a frontal attack on the Boilermakers ‑ ‑ ‑

MR WALKER:   No.  As your Honours all will have seen from our written submissions there is no hint of that and I do ‑ ‑ ‑

KIRBY J:   Even if we were to say that the argument you are putting up is ridiculous then you would not embrace a broader challenge.

MR WALKER:   It would depend, I suppose, your Honour ‑ ‑ ‑

KIRBY J:   We would not be so rude nowadays to do that, but it was done once.

MR WALKER:   Your Honour, may I deal with that in this way. In principle, Chapter III lays down a requirement by the combination of sections 71 and 72 with the necessary reference to section 77 in relation to jurisdiction vested in State judiciaries, but concentrating on sections 71 and 72, we will not be saying that the Constitution permits the Parliament from time to time and task to task to choose, unchecked by this Court, in what kind of body a court or a bureaucrat, for example, particular tasks with particular characters may be invested.

In other words, that there comes a point, however broad the middle category to which I will later refer may be, where the possibility of invalidity arises and, in our submission, this case – and it is difficult to imagine any case indeed – raises no occasion for us to challenge the doctrine in this Court that it is ultimately for this Court and not for Parliament to determine in any particular case whether the limit has been breached on what may be given other than otherwise into a court or what may be given to a court.

KIRBY J:   It would probably fall to the Commonwealth basically to say that we should look again at the doctrine as Sir Garfield Barwick suggested on one occasion.

MR WALKER:   Your Honours, may I make it quite clear that part of our argument – I had intended to reach this in culmination rather than in commencement – certainly does say that consequences of possible ways of deciding against us in this case may be the excessive expansion of the middle category in such a way as for all practical purposes to abolish what I am going to call “the fourth class” in a grouping of classes that I will come to fairly soon, and if that has happened then we submit there has been, in effect, a loss of the intended purpose of the drawing of the line by Chapter III, the intended purpose being one that I sum up by the fact that section 72 speaks of what I will call a protected judiciary, protected in a very instant and immediate way for its own sake but in a constitutional sense for the purposes of the polity and the people, protected in particular so as to perform their task of deciding between individual and State.  So, no, we are not challenging Boilermakers in any of the senses that I have just touched on.

Your Honours, the question whether the task given by 1292 to the Board bears the character which renders the law invalid because effectively as a matter of substance, though not form, it amounts to an invalid investiture of judicial power, is one which begins and ends and never can depart from the statutory provisions in question.  This is a case about the validity of a statutory provision measured against a constitutional requirement.

I shall come to the statutory provisions as the first part of my argument.  I will then briefly go to the way in which the Board actually dealt adversely with my client.  Your Honours will have seen from the agreed facts, to which reference has been made in the written submissions, that my client was by no means wholly unsuccessful before the Board and I shall very briefly take your Honours, simply by way of example in what are rather complex and dense documents about the proceedings before the Board, to some examples of adverse findings against my client.

I will then attempt, by reference to four of the cases to which reference has been made and discussion had in the written submissions, to place on what appears to be a spectrum where indications, none of which seems to be conclusive or to have a fixed or abstract quality to be collected and weighed perhaps in a judicially impressionistic way and I am going to go to four of the cases in an attempt, mostly by way of distinction, but also by way of relying upon statements of principle in dicta to place this case firmly on that part of the spectrum which requires only a Chapter III court, by which I mean a court constituted under section 72 or invested with jurisdiction under section 77 to administer ‑ ‑ ‑

GUMMOW J:   What the growth of this intermediate category, standing back for a minute, has been all about has been a response to something that did not exist in 1900, namely, the growth of the regulatory administrative state.

MR WALKER:   Sir Isaac Isaccs in Munro ‑ ‑ ‑

GUMMOW J:   He was on to it.

MR WALKER:   That most famously and explicitly, drawing upon his self‑boasted experience in three arms of government, which he described as considerable, explained the difference which, I think, by 1926, he regarded as a remarkable difference.

GUMMOW J:   The response in the United States to some extent is through the use of Article 2 courts, as you know, which are not Article 3 courts.  They are not courts as we would understand them.

MR WALKER:   The United States also has a distinctly different tradition in relation to the breadth of discretion which may be given to so‑called regulators or administrators ‑ ‑ ‑

GUMMOW J:   That is right, much more than we do.

MR WALKER:   - - -without infringing the rule against the delegation of legislative power, all of which makes, as I suspect your Honours will have observed from the written submissions on both sides, the North American analogies difficult if not non-existent.

GUMMOW J:   What we have and what they do not have and what perhaps we did not appreciate so fully in 1926 is the entrenched measure of judicial review under 75(v).

MR WALKER:   Yes, quite.

GUMMOW J:   It is against that canvas that you have to look at this minutia.

MR WALKER:   Yes, indeed.

HAYNE J:   To which I would add the further consideration that the administrative decision‑maker bound to accord procedural fairness is often measured against a standard of a judicial paradigm of procedural fairness.

MR WALKER:   Quite.  Hence the, I think now old fashioned but still used, expression, “quasi-judicial” used of those who are not judicial but who in statements using that expression are practically always being held to a standard to be found by pronouncements, including pronouncements about judges. 

That is why your Honours will not have seen much reference, if at all, to the requirement of impartiality, for example, in what we have said about the constitutional purpose which might inform the way in which one locates the line in a particular case, because as has been observed in the cases and as appears from the nature of the thing, official decision making calls for impartiality of one kind or another in any event, and it is not suggested that only judges have the quality of impartiality or may have that required of them.

KIRBY J:   That really puts your finger on, I think, paragraph 46 and the reasons of the Full Court where tantalisingly but unelaboratingly they say, what is the purpose of the separation of powers that this Court has said is upheld, and it is to divide governmental power and that, as it were, states the problem but it does not really give an indication of how one then answers the particular case, and it may be that it is impossible to have a very clear checklist or a simply stated principle, but I do think that the Full Court put their finger on what we really have to concentrate on which is what is the objective of separating the judicial power and making sure that it is kept separate, and does that apply to what seems, on the face of things, to be a regulatory type of scheme such as is in operation in this case?

MR WALKER:   Quite so, your Honour, so long as in searching for what I have called “purpose” and for what Justice Kirby has just referred to, one does not shift the inquiry from the enacted text, that is, of the Constitution to the motivations – reasons good, bad or indifferent‑ which produced that text, some of which may now be anachronistic, some of which may have been, as it were, in the nature of institutional paranoia, some of which may have been very sound commonsense.

What we have to deal with is the meaning and effect of the enacted text, knowing for example that in the paradigm of the exclusively judicial task the determination of criminal guilt and the infliction of punishment by way of sentence, that one is dealing of necessity and not only nowadays but in 1900, with many, many possible offences, statutory in nature, of what could only be called a very unimportant or trivial kind, but because they bear the character “criminal” not to be dealt with by a bureaucrat, that is, a member of the Executive.

KIRBY J:   Do you think that is what they were really thinking of in 1900 or was not what they were really thinking of that we would have here a federal Constitution, it is necessary to have a neutral arbitrator of the powers of the Commonwealth and the States and therefore we must ensure that the federal Courts and State Courts exercising federal jurisdiction have a degree of independence of political pressure so that they can do it neutrally and legally?

MR WALKER:   Unquestionably that is part of the requirement for the institutional integrity of a federal judiciary in a federal system where by judicial decision there may be the delineation of boundaries of powers between the constituent elements in the Federation including the federal polity itself.  However, that could not be a complete description of the matter and the judicial power referred to in section 71 is emphatically not a judicial power confined to constitutional boundary riding.  Section 71 judicial power will include as well the very most humble Commonwealth offence created for, for example, the good governance of conduct on Commonwealth places.

KIRBY J: But rooted in federal law which must find its origin in the Constitution.

MR WALKER:   Quite so, your Honour, but my point is that judicial power, section 71, the description in section 72 of the federal judiciary, which is one that I summarised as being thereby a protected judiciary, protected for all our sakes, and section 77 understood in light of the doctrine of this Court labelled Kable, they are provisions which ultimately require a line to be observed notwithstanding the notorious difficulty of describing its location by metes and bounds.  We are not going to try to do that.  The authorities suggest it is not only a difficult task, but one which is inappropriate to the nature of the issue. 

In our submission, one thing one observes in all the cases, particularly by the start point of many of the descriptions of principle in the authorities, namely, that a judgment of criminal guilt is classically exclusively judicial, what one sees from those references in the authorities is that you cannot take what might be called an expedient or utilitarian view of the constitutional line.  It does not depend on what I might call the life‑altering importance of the determination which is the nature of the task given to the official in question.  So determination of criminal guilt, even of a relatively very unimportant offence, that is to be done by judicial power.

To put it another way, if Parliament makes a law and renders infraction of its norms a crime, an offence, then it follows that it will be judicial power which is required in order to officially determine that in the relevantly binding authoritative and enforceable way which produces, for example, punishment.  I also rely to make good the proposition that it is not the individual importance of the particular issue for the affected persons that could possibly dictate where the line is to be drawn by reference to the other classic exclusively judicial kinds of cases which all the cases agree on, never been a suggestion that cases of tort or contract are cases which can be by Parliament put in a body for binding authoritative and enforceable determination otherwise than by the exercise of judicial power.  Of course, as your Honours appreciate, both ‑ ‑ ‑

GUMMOW J:   There is some trouble for you in all of that.  You have to add trust as well and what they are talking about at the bottom is general law rights and duties.

MR WALKER:   Your Honour, I am going to come to what I call the ‑ ‑ ‑

GUMMOW J:   Your problem is statute.

MR WALKER:   Yes, the provenance argument, that is, whether the rights and obligations or the norms are founded in unwritten law or in statutory law is a problem and I will be coming to it.  May I, however, shelve it for the moment so as to deal with it in due course?  I certainly accept it is an issue we have to confront.

Your Honours, it is clear that tort and contract cases can be of surpassing smallness or triviality in themselves.  It has never been suggested that there is, as it were, some monetary limit on the way in which one locates the line, required by section 71, in relation to whether it is judicial power that must be exercised in order, in a binding, authoritative and enforceable way, to decide disputes of tort and contract and of trusts, finding and enforcing the terms of a trust.  So, in our submission, the starting point always has to be in the statute and, for those reasons, given that this is a case about the registration of a liquidator, may I take your Honours in the Act – Reprint 2 will suffice for all purposes of my argument – to section 1279 as one place to start.

KIRBY J:   The statutory issue is the same as between you and Mr Albarran, is it not?

MR WALKER:   I believe so.

KIRBY J:   But different in respect of the third case of Mr Visnic.  At some stage, maybe at the end of your argument, if you could help to indicate whether, in your submission, there is any point of distinction in principle or application for the case of Visnic in the way you approach the matter so that we can keep that submission in mind as we approach the three cases.

MR WALKER:   Thank you, your Honour.  So section 1279 permits a natural person may make an application for registration as a liquidator and prescribes a form.  Section 1282 regulates the way in which ASIC may respond to that application.  Your Honours see that there is a mandatory grant in specified circumstances ‑ ‑ ‑

HAYNE J:   Among which are satisfaction of various matters, notably 1282(2)(b) and (c).

MR WALKER:   Yes, and the language clearly has to be given full weight for the significance of the satisfaction question; see the contrast with paragraph (a) which has no such language.  Yes, your Honour anticipates me.  I pass, without it being relevantly part of a scheme, but your Honours will note section 1283 the link with official liquidators.  Then section 1286, which is an important provision for that part of my argument which I might label the operative question.  This is the keeping of the register, 1286 ‑ ‑ ‑

GUMMOW J:   Is there any definition of “auditor?”

MR WALKER:   Yes, there is, your Honour.

GUMMOW J:   It is where we are starting and then the definition of “liquidator”.

MR WALKER:   We are a liquidator case, your Honour.

GUMMOW J:   Yes, I know.

MR WALKER:   Can I give your Honour those definitions ‑ ‑ ‑

KIRBY J:   They are in section 9, page 82 of the print, at least of “audit”.

MR WALKER:   Yes, your Honour.  If your Honours will forgive me, I will not be noticing auditor provisions on their own.  So then there is, as I say, the register of liquidators in 1286.  One sees that that is something which is both physical and clerically created.  It is a creature of clerical action.  It is something which is open to the public in the sense stipulated in section 1286(4) and, relevantly for my client’s position, in subparagraph (1)(b)(vi) particulars of a suspension of registration are to be entered.

In section 1292, the one in question in the case, there are powers given to the Board, that is the body which, in our case, has been given a task beyond its constitutional competence, depending upon its satisfaction on an application by ASIC.  It is in relation to people to who are registered and one sees that the possibilities – I am going to come back to 1292 obviously later – include:

by order, cancel, or suspend for a specified period, the registration of the person as a liquidator -

at the foot of 1292(2).  Before coming back to the critical expressions in 1292(2) itself, may I remind your Honours that in section 1298 there is provision for the effect of the suspension.  Mr Gould is facing the threat of a suspension of registration for three months.  The effect under section 1298 is that the person is:

taken not to be registered . . . so long as the registration is suspended.

GUMMOW J:   But the basis of the scheme has to be some legislative prohibition on doing certain things unless you are a registered auditor or registered liquidator.

MR WALKER:   Section 532 answers precisely that description.  As Justice Gummow points out, if I may paraphrase, one does not have a registration system for its own sake.

GUMMOW J:   It relieves from the effect of a prohibition, we have to start with a prohibition.

MR WALKER:   Under section 532(1) there is a prohibition on a person consenting to be appointed and a prohibition on a person acting as a liquidator unless he or she is relevantly a “registered liquidator”. 

CALLINAN J:   Mr Walker, where do I find the constitution of the Board and the provision for the appointment of it, the disciplinary Board?

MR WALKER:   Your Honour, one would find that in the provisions collected by our learned friends at paragraphs 33 and 34 of their written submissions. It was established under the ASIC Act and continued in existence by section 261 of the ASIC Act. It is comprised by certain persons whose eligibility is determined under section 203(2A) of that Act.

CALLINAN J:   Who appoints ‑ ‑ ‑

MR WALKER:   The Minister.

GUMMOW J:   And then, 532 is not the fully story, is it?  We have to find the penalty and, as Justice Hayne reminds me, do we then not have to go to 1311?

MR WALKER:   Yes.  May I add to 532, as a companion with it for administrators of schemes which are relevant to our case, 448B(2), which is in similar form, has the same prohibitory effect as 532. 

So the scheme is of a well‑established and familiar kind.  A certain form of conduct is conditionally prohibited.  In this case, the condition is the enjoyment by a person of a status and that condition, if fulfilled, lifts the prohibition from that person.  Hence, the significance, obviously, of registration being deemed not to be in effect, which is the position upon its suspension.

GUMMOW J:   You have to say that the law which has the effect of reimposition of the prohibition is one that engages judicial power necessarily.

MR WALKER:    That is a completely accurate statement of the ultimate point for which I contend in this case but it is not an adequate statement of the reason why that conclusion should be reached.  That would be a wrong or inadequate reason to achieve that outcome.  It is not because a line is relocated.  That would not get me anywhere.  To use the language of factum, it is because of the factum of registration may be altered – or removed temporarily in the case of a suspension – by a finding, binding for the purposes of this scheme, of contravention of a norm made or recognised by the law that we say only judicial power may be engaged on the task.

HAYNE J:   Now, what is the significance of injecting into that proposition the word “contravention” in particular?  Does not your argument, if it is good, run with equal force in relation to 1282(2)(b) and (c) which are the registration provisions requiring ASIC to be satisfied of certain things.  Now, a difference which is revealed by your formulation between 1282(2)(b) and (c) and 1292(2)(d) is this notion of contravention which you inject.

MR WALKER:    Yes.  Now, I use “contravention”, I confess, for these two particularly immediate reasons:  (1) that appears to be what they have adversely determined against us; and (2) it makes it easier to sound like the paradigm of a crime.  We do not run from that or apologise for it because this is an area where we say judicial method looks for similitudes and analogies.

HAYNE J:   But the argument you advance may be examined – whether tested – may be examined against its applicability to 1282(2)(b) and (c), may it not, where you have absolute prohibition – see 530 whatever it is – provision for registration, requirement for satisfaction by ASIC of certain matters, including satisfaction that the applicant is capable of performing and otherwise fit and proper?

MR WALKER:    Yes.  Your Honour, I am sorry, I apologise.  I do not think I am properly following the point your Honour raises.  May I probably make that clear by these comments?  We certainly do not say that our argument would achieve the remarkable result that judges are the only people who can be seized of the vetting process for auditors or liquidators.  I do not think your Honour was suggesting that to me.

HAYNE J:   No, I am not.

MR WALKER:   We would certainly not embrace any such alarming and impossible proposition.  I do not think the issue at the Bar ever raises the question of judicial review of administrative decision-making and ‑ ‑ ‑

HAYNE J:   But if determination of being a fit and proper person initially is, you say, the other side of the line you would draw.

MR WALKER:   It is the way in which we achieved the status that we are now to be suspended from.

GUMMOW J:   This word “status”.  This is another slide, is it not?

MR WALKER:   Yes, it is not a slide, your Honour.  It is the use of language of a time‑honoured kind because the authorities show that questions of status may well lend themselves in the impressionistic exercise involved to an outcome which requires the exercise of judicial power for an alteration.  We know from the authorities that it is certainly only an indication.  It cannot be categorically one way or the other, but, yes, we use the word “status” for that argumentative reason. 

May I, while on 1282, go back – I omitted to draw to your Honours’ attention subsection (8).  Your Honours may have seen the exchange in the written submissions culminating in our reply about this provision.  It again comes to the point that I call the question of operativeness.  By subsection (8) the registration of a person comes into force at the specified time.  One sees that that is a clerical question specified in a certificate and one sees that that is until the registration is cancelled and, relevantly, it is cancellation by the Board, which would be the case were, for example, Mr Gould to have suffered cancellation rather than suspension.  I stress the language of Parliament is cancellation by the Board.  Now, that is a reference and can only be a reference to 1292(2) in the case of a liquidator. 

Can I come back finally in the statutory matters to 1292 itself.  These points need to be made about its wording.  First, it is of obvious significance that the Board’s power of cancellation or suspension is posited on what might be called a contingency, to borrow language from the cases, might be called a jurisdictional fact, namely, its satisfaction on an application by ASIC that a person who is registered, Mr Gould in this case, has and then there is a list of matters. 

The ones that are of principal concern for our argument as to the satisfaction, which is the condition of the power of cancellation or suspension being available to the Board, is “that the person has failed . . . to carry out or perform” and then three important words “adequately and properly” – and I will come back to them – what are called:

(i)       the duties of a liquidator; or

(ii)any duties or functions required by an Australian law to be carried out or performed by a registered liquidator –

and then follow words which stand apart by their very meaning from what I have just quoted from paragraph (d), namely, “or is otherwise” – “or”, I stress “or”, “is otherwise”, I stress “otherwise” – “not a fit and proper person to remain registered”.  We are not that case.  We are the subparagraph (d) case to which I have referred.

GUMMOW J:   Where does the bankrupt fit in?  It would seem at the moment that a bankrupt could carry on until suspended under this provision, but which provision would it be?

MR WALKER:   Your Honour, we do not say that it must be ‑ ‑ ‑

GUMMOW J:   It would have to be “fit and proper person”, would it not?

MR WALKER:   The factum of being a bankrupt may be one by which a scheme for the registration and deregistration of a liquidator operates by legislative force without any other power being required.  We certainly do not say that only judicial power could be used in order to ascertain whether that factum existed.  That would be absurd.  It is a perfectly good administrative scheme for it to be provided that upon an administrator being satisfied of a person’s bankruptcy, et cetera, et cetera, et cetera.  We do not say, obviously, that one cannot lose the status of a liquidator except by the involvement of the judicial power.  There are other provisions that I have passed over that your Honours have seen where that status can be lost without any possible suggestion of the exercise of judicial power and their validity cannot possibly be doubted.

GLEESON CJ:   Does this argument apply to any licensing scheme in which you may lose your licence by reason of failure to comply with a condition of the licence?

MR WALKER:   No, that would go far too far, and here comes a large problem for us.  I think, however, I would have had to say “Yes” if your Honour had asked the question, “Does it apply to any licensing scheme where continuation of a licence depends upon not breaching, for example, a provision of the criminal law/civil law of the Commonwealth?”

GLEESON CJ:   But you can make it a condition of a licence that you observe the law.

MR WALKER:   Indeed, one can.  If, for the purposes of the licence, the binding, authoritative and enforceable determination is made by an administrator that somebody has committed an offence – and I stress not been convicted – it is a different question to which I will come later – but has actually committed an offence or has breached a contract, if one imagines a licensing scheme for trading and financial corporations requiring a licence to contract over a certain amount, for example, and the condition being that they do not breach more than three contracts a year with damages valued at more than a certain amount per year, if there were such a condition of a licence for corporations to make contracts and trade in commerce in Australia, then, in our submission, it would be an exercise of judicial power which would be required to make that final, binding and authoritative determination, have you breached your contract. 

The fact that it is embedded in and is given its no doubt massive commercial and political significance by being in a licensing scheme as opposed to standing pure and simple as a contract dispute, does not alter the substance of the matter that an official is determining in a final, binding and authoritative way that you have committed an offence, that you have breached a contract, that you have been negligent – whatever the position may be.

GLEESON CJ:   What about a broadcasting licence that requires you to comply with certain standards of conduct, for example, level of Australian content?

MR WALKER:   Your Honour, the further the grounds for exercise of the licensing power move away from contravention of a justiciable norm, then the more clearly it appears that judicial power need not be engaged on it and, indeed, it may even be that judicial power may not be engaged on it.  The Broadcasting Standards Case would clearly give rise to just that kind of question, whether those are standards of a justiciable kind as opposed to what are called – and the language varies and is never particularly precise in the cases – policy, political policy, government policy or commercial policy questions of a kind that some of the cases have embraced and to which we will be making further reference.

KIRBY J:   Mr Walker, unless we are going in this case and other cases to just stumble from one instance to another saying that is on that side of the line or that is on that side of the line, the mind searches for a conceptual approach to this. I saw in your written submissions that there seems to have been some cases that say there are some things which of their very nature can only be done by courts, for example, perhaps sending people to gaol, but there are other things which can be done by courts or administrators, and then is it just a matter of looking at the indicia and seeing whether the combination of indicia really put this on the wrong side of the line or is there some other way that one can organise the mind to approach this in something better than purely analogy to past instances, because that is not a very satisfactory way to apply the Constitution.

MR WALKER:    Your Honour, my answer will probably disappoint then because, in our submission, as a matter of authority, the method this Court has laid down is one which eschews or doubts the possibility of any particular quality stated abstractly being, as it were, a litmus test, and, indeed, there does not seem to have been any attempt made to have, as it were, a multi‑pronged litmus test either, so it ‑ ‑ ‑

KIRBY J:   I thought there were some early cases.  I thought Justice Isaacs had said ‑ ‑ ‑

MR WALKER:    Sir Samuel Griffith’s famous dictum is one which plainly is neither complete nor accurate.  As a number of your Honours have observed on a number of occasions, it would simply not do to speak, for example, of finding facts, ascertaining the law and applying the law to the found facts as anywhere near a useful guide to discriminating between that which requires judicial power and that which does not, who is finding it, for what purposes, in what context, how?  After all, private people do just that when they work out or try to work out what they have to do under a contract or, indeed, what they should do by way of precaution to prevent injury to others.  They are ascertaining facts, they are ascertaining the law, they are trying to apply the law to the facts.  Administrators do it all the time and how could they proceed otherwise?

GUMMOW J:   Are there any cases in this intermediate category dealing with licensing schemes of the kind the Chief Justice was exploring with you?

MR WALKER:   Your Honour, could I take that on notice?

GUMMOW J:   Yes.

MR WALKER:   It depends on how broadly one understands a licensing scheme.  Is the opposite of a licence, namely the conditional prohibition which in a sense is Davison’s Case, an offence that can be committed only by a person who is bankrupt?

HAYNE J:   But is not the whole body of law concerning the provision of procedural fairness to those whose licence is about to be cancelled a body of law that proceeds from the premise that it is not judicial power?

MR WALKER:   Unquestionably, but that does not ‑ ‑ ‑

HAYNE J:   So banks and cases of that kind back into the 1960s, et cetera.

MR WALKER:   Which is why I tried to say, in explanation to the Chief Justice, that we are certainly not saying it is a loss of a licence which requires only judicial power to be deployed on the task.  That would be plainly wrong for reasons including what your Honour has just raised.  When the factum in question, by reference to which the de‑licensing part of the scheme operates, is a determination binding for those purposes, enforceable in the way in which I am going to say it is enforceable here, and the content of that factum is a contravention or breach of the law – and I mean the public law and I indifferently include statutory norms as well as non‑statutory norms – then, in our submission, that is what requires the deployment of judicial power.

HAYNE J:   The word “determination” may itself mask a question about the significance to be attached to the reference to the Board’s satisfaction, may it not?

MR WALKER:   Yes, and it raises the difficult question of collateral challenge as one of the indicia of whether the task is being wrongly given to a non‑judicial body or whether it is being properly given to a non‑judicial body.  On collateral challenge one can notice in passing that in Davison’s Case there was a collateral challenge afoot.  It was an offence to do something while a bankrupt.  The man had a sequestration order made by a registrar, not a court, and so it arose by way of collateral challenge as to whether he was truly a bankrupt.  That matter played no part, on our reading of the case, in the decision that there had been, in fact, an invalid vesting of judicial power in that case. 

Now, it is of the essence – we lose unless we can persuade your Honours that, first, 1292 is about contravention or breach – that is going to require attention to the “adequately and properly” phrase to which I drew attention earlier – and second, that the Constitution does attach a special quality to determinations that there has been a contravention or breach of a legal norm as opposed to some other content of the factum by which you may be deregistered. So it does not require any judicial power to deregister somebody because they have been, for example, out of the jurisdiction for a certain time or because they have been sick.

GLEESON CJ:   What do you mean by “legal norm”?

MR WALKER:   I mean a standard stipulated by a law.

GLEESON CJ:   Statute?

MR WALKER:   Either a statute or the common law.  So breach of contract, negligence or contravention of a statute.

GLEESON CJ:   Take the case of a racing club that licenses jockeys and trainers in a manner that has an important effect on their livelihood and they are obliged to comply with the rules of racing.  Now, why is it that nobody would suggest that when they suspend or disqualify a jockey or a trainer, a racing club is exercising judicial power?

MR WALKER:   Because they are not exercising any official, that is, it is not an official function ‑ ‑ ‑

GLEESON CJ:   Nowadays I think those schemes have statutory support.

MR WALKER:   But if they are state based, then none of this constitutional argument matters at all, your Honour.

GUMMOW J:   It might be a corporation, Mr Walker.

KIRBY J:   Yes, indeed.

MR WALKER:   It might be, your Honour.

GUMMOW J:   Heavily engaged in trade.

MR WALKER:   Yes, it might be, your Honour, but that does not mean that the statutory provisions of a State concerning the conduct of horseracing, for example, do not apply to them.  That will depend on some very exotic 109 possibilities.

GUMMOW J:   You are not getting to the point, Mr Walker.  Assume a federal structure of the nature that the Chief Justice has put to you ‑ ‑ ‑

MR WALKER:   If a federal structure, then, if it were official in the sense that a statute empowers or requires a racing club corporation to make certain determinations about the continued licence, say, of a jockey, then I am forced by the nature of my argument to discriminate in the following way.  If he may lose his licence for repeated instances of careless riding, then, in our submission, that is not a matter which involves contravention of a law in the sense that I have been using it and for those reasons there is no question of judicial power being involved.

Indeed, it seems common sense in that outcome, bearing in mind that if Parliament has not turned its attention to promulgating standards for careful riding in horse races, then it is really a matter for the beholder as to what is careful and what is not.  Idiosyncratic conceptions, in other words, to paraphrase from one of the authorities, would play an important role. 

On the other hand, if the racing club corporation were empowered or required by statute to withdraw a person’s capacity to earn a livelihood by de‑licensing him or her because he had committed an offence, say, of assault, trespass to the person, then, in our submission, that is something which could not be done except by an exercise of judicial power.

GLEESON CJ:   But quite apart from any federal/State context or constitutional context in which the issue arises, if the identification of what belongs necessarily to judicial power is something that you do by reference to historical considerations by reference to what in the past has been treated in that way, then the way in which the rules of racing have been administered for over 100 years is quite closely analogous, is it not, to what is going on in this case?

MR WALKER:   In some respects only, in the sense that registration resembles licensing.  The differences also abound.  Racing started historically as a private recreation dominated by club notions rather than by public or general law notions.  It is true that it has been regulated as many private recreational activities have been regulated but that is an inescapable part of its history.

GLEESON CJ:   You have the same system applying to barristers and solicitors.

MR WALKER:   Yes, there is a question, obviously, as to whether section 55C(5) of the Judiciary Act is of any use to today’s argument because, as officers of the Court, there is a peculiar and specific reason why, incidental to the judicial power, the Court can directly discipline us.  Indeed, in terms which are extremely broad, this Court may strike us off if our conduct justifies them doing so.

GLEESON CJ:   What used to be called the Statutory Committee of the Law Society regularly made decisions about whether people had misapplied trust funds, for example, and implicit in those determinations might have been conclusions that people had broken the law.

MR WALKER:   Your Honours, I should tell you that the history, including the recent history, records explicit consideration of breaches of the law and serious criminal offences being considered by non‑judicial bodies in the legal profession.  At the risk of Justice Gummow’s wrath I need to observe, of course, but that is a State jurisdiction.  I do not think ready examples can be found in the federal jurisdiction of that kind and the history, obviously, includes a history which is different for State jurisdictions.

GLEESON CJ:   But if something is an exercise of judicial power, the fact that it is done in State jurisdiction might simply mean there is no constitutional problem about it but it does not mean any the less that it is done in the exercise of judicial power. 

MR WALKER:   Quite so, your Honour.

GLEESON CJ:   You can look to State jurisdictions in order to help you define or refine your thinking about what is an exercise of judicial power, presumably.

MR WALKER:   Yes, so long as one accepts, as this Court has made clear time and time again, that State judiciaries as a matter of principle may do some things which federal judiciary may not.

GLEESON CJ:   State jurisdictions are full of “professional”, using that word in the broader sense, licensing schemes which have a practical operation very similar to the operation of the scheme with which we are concerned.

MR WALKER:   Yes.  Your Honours, one way of making this point more acutely, and I think against ourselves, is to point out that in the very provisions, some of which we are attacking, there is that very well‑known phrase found probably in all the schemes to which the Chief Justice has just referred, “fit and proper”, not a fit and proper person.  In one sense, I do not have to deal with that because I do not attack that provision but your Honours are entitled to ask me, “How does its survival, how does its validity, fit your argument?” and my answer to the question is that “fit and proper” is a category of sufficiently indeterminate reference as to permit matters of idiosyncratic conception, indeed probably of policy, to intrude in a way which is said to be some of the indicia suggesting that this does not need to be done only by the exercise of judicial power.

KIRBY J:   It is just that it is a little elusive.  Maybe you cannot do better in the authority of the court, but it is a little elusive as to why, consistently with the separation of the judicial power, it should not be possible to commit to a group of business people the regulation of liquidators because they will have common sense and knowledge and they will take into account the standards of the profession from time to time.  What harm does that do to the role of the federal judiciary and its function under the Constitution?  I do not see that it does any.

MR WALKER:   It may well be that many people would think that there are trivial criminal offences that would be better kept out of court and dealt with by non-judicial bodies.  However, those are arguments that were lost with the enactment of section 71 in the form it takes.  Those are matters of political policy and, with great respect, a person who agreed with what your Honour suggests about a lack of threat to institutional integrity may well take the view that there could have and should have been a different delineation of that which is exclusively judicial ‑ ‑ ‑

KIRBY J:   Yes, but you are appealing to the policy of the Constitution. It is political in the broader sense but we are trying to find out why, consistent with the reason why this Court has divided off and kept pure the federal judicial power, why can you not have an administrator doing this type of regulation of a profession?

MR WALKER:   I fear I am now repeating myself.  The answer is that of course in general terms you can.  No doubt in political or social terms you should.  The notion of judges doing it is alarming in a number of different ways.  However, if the content of what I continue to call, in deference to the authorities, the factum in question - which in this case triggers the possibility of cancellation or suspension of registration – is chosen by Parliament to be expressed in terms which embrace, for example, the finding of a criminal offence or a breach of a statutory requirement or a breach of a statutory requirement to be diligent, for example, if Parliament chooses to express the norm in that way then, in our submission, because it is binding in the relevant sense that I am yet to try and persuade your Honours of, for the purposes of that scheme, then it follows - according to dicta to which I will be coming, I hope shortly - that we have in a licensing or registration scheme a determination of the very kind which this Court has repeatedly described as classically the exclusive province of the courts. 

Now, that is why I use the words “contravention” or “breach” and I use the expression “legal norm” explained in the way I have in answer to the Chief Justice because, in our submission, that is what comes from the way in which this Court has dealt with the matter.  Now, I note for later dealing with the important point that Justice Gummow raised, well, is there are a difference between norms derived from unwritten law and from statutes, we submit there is not but I have to make that good yet.

KIRBY J:   You do not have here a criminal offence.  You do not have an imposition of a fine.  You do not have sending somebody to imprisonment.  You do not have the control over their liberty which is an essential aspect of the judiciary.  I agree and it is accepted that it is damaging to the person involved but it is not within that field which is traditionally and perhaps exclusively for the judiciary.  It is something that can go in either department.

MR WALKER:    Yes, but the definition of “duties” in 1292(2) includes things which are required by provisions which, for example, fall within civil penalty provisions.  So this is not a case where contravention cannot be misconduct; to the contrary.  Your Honours, I was going to spend some time, but noting the time I will now simply give references to where in the rather difficult materials you can find an example of what, in fact, was done to us.  If I could just pick one, for example, your Honours will have seen that what passes for pleadings refer to contentions and the like. 

Contention 2.11, which is described at page 25 of the appeal book, resulted in a finding at pages 106 to 107, for example.  So‑called supporting contention – I am sorry about this tedious detail – 2.2(ii) is found described on page 16, and some of the relevant provisions in question extend over to page 17, and the finding of contravention is found on page 96.  I will not spend any time, bearing in mind the time, on it.

Could I then come to this question, and I am reminded in answer to Justice Kirby – I have just given examples of two that were actually adversely determined against us.  Many were not or were withdrawn.  One of those we succeeded on invoked section 1308, which is a criminal provision.  Your Honours, can I come back then to this important wording in 1292 about which there is ‑ ‑ ‑

KIRBY J:   But this Board cannot impose a criminal punishment?

MR WALKER:    No.

KIRBY J:   It cannot impose a fine or send you to prison?

MR WALKER:    No, it cannot.

KIRBY J:   Which are classic indicia of exercise of the judicial function?

MR WALKER:    Quite.  Now, these are questions of degree.  Does it have to be judicial power if you can do everything in relation to a criminal allegation except pass sentence?  Well, that must depend obviously on the particular case.  What is it that can be done?

KIRBY J:   Is it your submission that if you look at the cases in the end what you have to do is look at how the body operates and what it does and its effect on the subject, the citizen?

MR WALKER:    Yes.

KIRBY J:   And that if you look at that way in this case, it operates by applying a norm, it has very grave powers over reputation and the exercise of economic freedoms and the consequence may not be sending the person to prison but it is a very, very serious consequence and that should be confined if the Boilermakers’ principle has any legs to the judicial power and Parliament just has to draw its legislation on that footing?

MR WALKER:    Yes, recognising that there may be very little, if any, difference in what I will call “social policy” between a law which is just on the right side of the line and a law which is just on the wrong side of the line, but there is still a line.

I would add to what Justice Kirby has assembled there, the requirement that this be an official scheme, that is, set up by legislation of the Commonwealth Parliament.  We are not talking about an employer having a rule for employees in their contract that upon an employer being satisfied that theft has occurred there will be instant dismissal.  That is not calling for the exercise of judicial power because that is not an official scheme.  That is not set up by a statute.  It is when it is set up by a statute and when one therefore has the spectacle of the Parliament empowering the Executive to determine against an individual something of the kind which as a matter of substance has been said by the court to be classically the province exclusively of the judges.  That is why I keep using the expression “contravention or breach of the law”.

Your Honours, in 1292 I emphasise the relevant factum is defined in terms of failing to carry out or perform, and then I emphasise the phrase “adequately and properly”, the duties, et cetera.  There is an argument raised against us that by the insertion of that rather bland phrase “adequately and properly” there has been expanded an inquiry beyond mere breach or non‑compliance with a duty into what we apprehend to be characterised as a kind of qualitative assessment even of performance which did not fail to comply or which did not breach the duty.  In our submission, there is no textual or common sense support for that reading.  The content semantically of each of the words “adequately” and “properly” is to describe performance which does not achieve compliance with a duty.  If it is not adequate, it is not adequate because it is not enough to make out compliance.  If it is not proper, it is because it is the wrong thing or not the right thing in order for there to be compliance.

Now, in our submission, that means that we have the statutory expression of the relevant one of the several factums for deregistration or suspension or cancellation being expressed in terms which call for a determination according to the satisfaction of the Board of contravention of a duty, that is, failure to comply with a duty, breach of a duty.

HAYNE J:   Now, as to part at least the duties of liquidators are expressed in terms which would require application of standards to the particular circumstances of the liquidation.

MR WALKER:   And involving evaluative assessment of the adequacy or propriety of conduct to satisfy the duty, yes, your Honour, just as a negligence case involves an evaluative assessment as to whether efforts have been reasonable, for example.  Your Honours, may I again, with an eye to the time, move on to our attempt, pretty much as Judge Kirby has regretfully suggested I am doing, pretty much to say from cases, well, compared to this particular case, our present case is one which is well and truly nudged or pushed to the part of the spectrum which is reserved exclusively for the exercise of judicial power.

Before I come to that, may I attempt a description of four classes of tasks of determination relevant for today’s argument?  The first class is a class of case which may be determined only by judges.  The second class, the so‑called middle class, is one which may be determined by judges or by administrators more or less according to the choice of the Parliament.  The third class are tasks which may not be given to the federal judiciary.  The fourth class is one which may not be given to State judiciary invested with jurisdiction under section 77.  Bit of overlap between the third and fourth class but obviously not completely congruent.

HEYDON J:   What part of your written submissions is this categorisation explained in?

MR WALKER:   It does not appear at all, your Honour.  I am trying to explain my reference – and it appears, I think, in our written submissions – to the middle class.  “Middle” rather suggests three, but on reflection there are four.  The third and fourth do not matter with this case at all and I will not be saying anything more about them.  This is a question of a choice between the first and the middle class, exclusively judicial and the middle class about which Mr Justice Isaacs spoke, for example, in Munro. 

We submit that what one can gather from the cases is that so far, at least, this Court has never suggested that the middle class effectively occupies the field in these modern days of the so‑called administrative state or regulatory state and that there is practically nothing except the vaunted murder trial left for the first class.  There is no suggestion in this Court, from 1926 onwards, of any such so‑called trend or movement.

Then, looking at the four cases I have selected, or five, can I come first to Tasmanian Breweries 123 CLR 361. I will not be reading any long passages to your Honours; I simply want to give you these references. In Mr Justice Kitto’s judgment concerning what was upheld as the legislative authorising of the Trade Practices Tribunal to look into so‑called examinable agreements and make declarations of provisions being contrary to the public interest which led, under the statute, to them not being capable of being enforced, at page 375 his Honour refers to the nature of the determination in question as being not of an existing right or obligation. By parity of reasoning, if the determination is of an existing right or obligation, it at least indicates a different or opposite result. That is this case. It is a duty, pre-existing, and it is past conduct measured against that pre‑existing duty.

That answers the description of existing right or obligation and negatively that approach by Justice Kitto in Tasmanian Breweries places this case provisionally and subject to all the other influences in the exercise on the judicial power side.  Also at that page there is reference to policy.  It is important to note about point 6 or so, just before the reference to In re Chemists’ Federation Agreement [No. 2], there is a reference to policy and one sees the important distinction to be observed.

That is not policy as it is used in shaping the principles of the common law as discussed by some of your Honours, for example, as the policy of the law in Cattanach v Melchior, but it is policy of a kind which means that there are not the objective standards which are a hallmark of justiciable norms, those laid down by a law, which may be objectively determined rather than according to “idiosyncratic conceptions”.  That expression is found at the foot of page 376 in the same report.  That was the way in which his Honour characterised the conflict of the public interest matter which was at the heart of the controversy in Tasmanian Breweries. 

At page 377, point 6, a further characteristic in that case, quite absent from this case, appears as a possible indicium and that is characterising the work, the task being done as one which would be appropriate for a legislature were a legislature to be concerned to take trouble with individual cases.  There is no resemblance or analogy between such a case in relation to what I will call particular or classes of contract being contrary to the public interest and the question whether a man has contravened or breached a duty to be found in a pre-existing way in the body of law governing his conduct as a liquidator.

The constantly used expression “factum” is found on page 378, point 3, in a sentence which again is important by way of contradistinction from our present case.  His Honour about an inch down on that page refers to:

The determination itself has no operative effect:  it constitutes the factum by reference to which the Act operates to alter the law in relation to the particular case.

Now, in our submission, one needs to be careful about treating the factum notion as a litmus-like test.  After all, one of the most frequently resorted to factums for the denial to somebody of liberty to act, or the unavailability of a privilege or a licence is a conviction of a certain kind.  That is a factum by reference to which a scheme operates to deprive somebody of a privilege or to prevent them from obtaining a licence, for example.  Nobody has ever suggested that because a conviction for an offence is a factum by reference to which, et cetera, et cetera, that the conviction itself may be brought about otherwise than by the exercise of judicial power.

So, in our submission, one always requires to look to the content of the so‑called factum and if that content of its character belongs to a class which largely by dint of historical precedent has been the providence of judges, then, in our submission, that is an indication as to where one should finish up on the spectrum.  Contravention of a legal duty is classically, in our submission, and as a matter of historical precedent, something which in a binding way is the province of judges.  There is no suggestion, for example, that anything in our case in 1292 places the argument as to whether or not judges are able to do what was done to Mr Gould.  Of course they are able to and, in our submission, that is part of the step away along the journey to persuade your Honours that by historical precedent this is classically, along with criminal guilt, the kind of thing that judges do.

They do it, if I may come partially to the question that I have reserved from Justice Gummow, they do so whether the duty finds its source in a statute, section 52 of the Trade Practices Act, or whether it finds its source in the unwritten law, the common law of that misrepresentation, for example.  They do it indifferently.  It is the process of ascertaining what the laws says as to the duty, be it written or unwritten law, finding the facts, applying the law to those facts as found and determining the remedy which is time and time again one of the descriptions, albeit incomplete, that one finds of the classical province of the judges.

HAYNE J:   Much of this aspect of the argument begins from a premise about the expression “adequately” and “perform adequately and properly the duties of a liquidator”.  The two particular instances you pointed to in Mr Gould’s case concerned his performance of duties as indeed administrator which he could be if, but only if, a registered liquidator, I understand.

MR WALKER:   Yes, that is how I make that link, your Honour.

HAYNE J:   I understand that.  But at some later point, could you give me the best example you can of a duty of a liquidator, qua liquidator, the performance of which adequately and properly was to be assessed without considerable evaluative input?

MR WALKER:   Yes, thank you, your Honour.  Now, it will, of course, not be one which has been decided adversely against Mr Gould.

HAYNE J:   I understand that.

MR WALKER:   I will find one which has been alleged.

HAYNE J:   Or at all from the Act.

MR WALKER:   If I may, I will try to find one which is loaded with evaluative assessment and one which is rather sparse on evaluative assessment.

HAYNE J:   Thank you.

MR WALKER:   There is a range, your Honour, I accept, just as we submit there is a range between a tort such as negligence and a tort such as trespass, a sharp line in trespass relevantly, a fuzzy zone involving evaluative assessment in negligence.

In our submission, it must await, as in every case, to see such a legislated scheme, to see whether judicial power has been invalidly given to an administrator, but we would certainly not say that divorce has achieved by post‑Federation history that which it would not have had pre‑Federation, namely, a claim exclusively to be awarded by judicial power rather than some other form of power.

That brings me to a concession I need to make.  We accept, as Judge Kirby asked my learned friend, as I hope we made clear in‑chief, yes, historical precedent is one of the constantly approved sources of indications that this Court has referred to as to those things which require to be done only by judicial power and those things which may be done by either administrative or judicial power and as well, of course, those things which may be done only by administrative power and not by judicial power.

Now, as I think has been near common ground at the Bar table, the history in relation to the disqualification of liquidators is not particularly strong on either side of the question in this case and it is, in our submission, worth recalling how relatively recent, as one sees from the dates referred to in Davison’s Case, the analogous position was in relation to bankruptcy.  That was considered by this Court in that one.

My learned friend, with respect, correctly named the standard collection of crime, contract, tort and trusts in answer to Justice Kirby’s question as to whether the Commonwealth accepted there was a province exclusively judicial.  One, in our submission, should not regard that, by its frequent repetition, as deriving or obtaining any quality of exhaustiveness.  In particular, though it seems never to have been the subject of argument, contrary contention, in this country, it could scarcely be doubted that the province of determining the validity and the meaning of a Commonwealth statute, the enactment of Parliament or of a regulation under an enactment, is exclusively given as to binding and authoritative determinations to judges notwithstanding that, of course, every day people who are interested in regulating their conduct or administering the law in the executive branch make decisions as to whether a law applies by reason of being enforced and what it means.  But as to the authoritative determination of what it means that, of course, in our submission, it goes without saying, is exclusively judicial so that would need to be added to the list.

We would extend from that proposition that it would be curious, and no reason in principle has been suggested in any of the authorities or the arguments, that if the validity and interpretation of the statute be exclusively judicial when it comes to authoritative and binding determination, why would not the purpose of each of those inquiries being made in a matter, namely, its application to the facts of the case, equally fall to the exclusively judicial province.

KIRBY J:   What I do not have clearly in my mind is what it is in your argument that you say, looking at the Constitution functionally and at the high principle of separating the judicature, is offensive to the great scheme of the Constitution and to the freedoms of Australians in having an administrative tribunal deal with the regulation of this particular activity in a business setting by business people as distinct from judges.

MR WALKER: If your Honour would forgive me, in my answer I would not embrace the rhetoric of protecting freedom as necessarily productive of a proper answer in interpreting what section 71 of the accompanying context of the Constitution requires. It is true that they are enacted ‑ ‑ ‑

KIRBY J:   It may be that that was rhetoric but the notion of an independent judiciary is not there for the judges.

MR WALKER:   No, quite.

KIRBY J:   It is there for the people.

MR WALKER:   A protected judiciary for all our sakes, that is, so that they do not feel individually pressured – they are spared individual pressures, not for the sake of sparing them individual pressures, but so that being spared of individual pressures we may be the more confident in the institutional integrity requiring fearless, fair and correct determination, particularly when one of the polities is on the other side against an individual.

Now, in our submission, those are reasons why - sound, social and political reasons why what might be labelled active settlement type provisions are found in one of their many available variants in section 72 and why a power is given to the Commonwealth Parliament to withdraw the investiture of jurisdiction in a State court if, for example, they are no longer satisfied with its composition, and why this Court has gone further and said there are some things State Parliaments cannot do to their judiciary, by reason of the Kable principle, because of the possibility or actuality of investiture under section 77.

KIRBY J:   Well, there are not many.

MR WALKER:   No.

KIRBY J:   Only one.

MR WALKER: It is still on the books, your Honour. Now, your Honours, what we offer as that purposive explanation of how the principles should operate in applying the line required by section 71 so as we win our case is that the Constitution bespeaking explicitly and implicitly the rule of law, that determination of breach of law whether the choice has been made to prosecute in crime, to seek the imposition of penalty civilly or to establish a factum for the visiting of an official scheme in, for example, a disciplinary context, that the rule of law requires that where contravention is the allegation made by an official against an individual, that must be adjudicated judicially.

At one stage my learned friend said of section 1292(2) that it called for more than questions of law to be determined.  We entirely accept.  It calls, to adapt the familiar phrases, for the finding of facts about past events or conduct, the identification of pre‑existing legal standards, called duties, and the assessment.  In some cases they will necessarily be what has been called evaluative, that is, a range of possibilities and impressions to be formed where there is other than a black and white outcome possible, in order to determine whether there has been compliance or not.

In our submission, of course there is more than a question of law to be determined.  That is also true, classically, in the provinces which are, by concession, exclusively for the exercise of judicial power, findings of fact, evaluative assessment, application of legal standards which have been identified as applicable.

Justice Callinan raised with my learned friend the deterrent aspect to be seen in the scheme in question in our case.  In our written submissions in‑chief at paragraph 20, at the foot of that paragraph, we have identified – I do not want to put too much weight on it – that the publication requirements are requirements which of their nature serve, one hopes, the purpose of permitting something of the nature of general deterrence to be effective.

However, we respectfully adopt what my learned friend said that between the perhaps false alternatives of punitive and protective with deterrence perhaps being an aspect of either end of the spectrum one does not find any hard and fast line which necessarily produces any result in relation to the requirement for the exercise of judicial power.

My learned friend drew attention to the passage at page 188, point 8, or thereabouts, in Precision Data 173 CLR.  We would wish to emphasise, in particular, as to be fair, my learned friend did, in his reading, the word “solely” in that passage.

My learned friend says that if he is correct on the proper meaning of the words “adequately and properly”, then the word “solely” will not be satisfied in this case.  It will not be solely by reference to legal rights and obligations.  Query, with respect, whether that is correct because “adequately and properly”, first of all, are found in a statute, they are a legal standard thereby, and second, are of a kind which are well within the everyday fare of common law courts, not just courts with statutory remits. 

So, in our submission, it does not follow, even if our learned friends are correct in their reading of “adequately and properly”, that this is not a case where events in the past and conduct in the past has been judged solely by reference to legal standards.  However, in our submission, for the reasons I have put in-chief, to which I will return briefly in just a moment, “adequately and properly” construed in their context is reference to a failure to comply with a duty, that is, a failure to fulfil the duty, “fulfil” meaning the full measure necessary to achieve performance of the duty to the legal standard which its imposition creates. 

In our submission, once that is accepted as the proper interpretation of the phrase in 1292(2), then there is no difficulty with the criterion referred to in that passage in Precision Data being satisfied in our case.  The passage at 189, point 5 in Precision Data, it is important, in our submission, to note the difference between the parties before your Honours.  As we understand the argument against us, it is that the Board actually creates rights and obligations. 

That seems to derive from the futurative effect of a suspension, but that is no more creating a right and obligation than the futurative aspect of any judgment of a court, be it for damages, injunction or any other judicial remedy which remedies, that is, provides relief according to the legal rights and obligations found to have existed by reference to the past events and conduct which have been established.  In our submission, there is no creation as opposed to enforcement of rights and obligations in the sense that the authorities refer to in our case. 

At 190, point 4 my learned friend drew attention to the well‑known passage concerning the importance of the express requirement for commercial policy to be adverted to by the Panel in its considerations in Precision Data.  It was important in the reasoning of the court.  In our submission, it is a component entirely missing in our case.  “Adequately and properly” are not words which import some matter extraneous to broader than or quasi‑legislative in relation to the performance of a duty.

In relation to the “adequately and properly” matter, in our submission, it probably comes simply down to this.  As a matter of the ordinary English used in this context, that is, its ordinary English in the legal context particularly in the context where an adverse sanction may follow, one asks whether the words are being used so as to contemplate that inadequate performance of one of the duties in question could, nonetheless, be compliant with the duty. 

Now, there is a relevant question raised by our learned friends’ argument because they are positing two lines.  They are positing performance, that is, compliance, and then they are saying, and now there is a fuzzier qualitative assessment, that you do not get off the hook under 1292(2) simply by performing, that is, complying, but we can also look at whether it is adequate or proper and that you can fail to be adequate or proper, so you can be inadequate and improper but you would still be complying. 

It is most peculiar English and contrary to the legal instinct, in our submission, to say that inadequate performance of a duty is compliance or fulfilment of the duty or improper performance of a duty is compliant or fulfilling performance of the duty.  Normally, those words “inadequate” and “improper” are words not of simple emphasis but recognising that matters are questions of degree, particularly when they are duties of the kind in question here, which say that there are standards to be reached and that efforts to achieve those standards may be inadequate or improper, that is, there will not be compliance.  It is for those reasons, in our submission, that there is no extra legal matter of a policy kind indicating that this does not call for the exercise of judicial power. 

In Breckler 197 CLR 83 at 111, paragraph 45, could I draw to attention, in response to the way my learned friend used that passage, that there has been no suggestion made in this case of anything in the position of or analogous to the independent exercise of judicial power necessary to bring about operativeness of the kind that their Honours are referring to at the end of that paragraph 45, nothing at all.

Your Honours, we too had determined that Cunliffe was the case to suggest in response to Justice Hayne’s request.  I am bound to draw this to attention in Cunliffe 182 CLR 272. It is in the reasons of Justice Brennan in the passage at 330 to 331. There is quite explicit discussion by his Honour there of the availability of the AD(JR) Act to review decisions adverse to a person in relation to the criterion of fit and proper person.

Your Honours will recall that one of the issues in that case as argued was whether the “fit and proper” criterion rendered the licensing scheme disproportionate, bearing in mind its requirement to sit alongside what was argued as an implied constitutional right of political communication.  The argument borrowed from the jurisprudence under section 92 as understood before Cole v Whitfield – your Honours will recall, for example, Boyd v Carah – where licensing schemes that used those expressions merely “fit and proper” were held to be, as it were, not sufficiently ‑ ‑ ‑

GUMMOW J:   It is really footnote (82), I think.

MR WALKER:   Yes.

GUMMOW J:   It brings up his earlier discussion in Miller v TCN Channel Nine as I remember it.

MR WALKER:   Quite.  Now, it is in that context that I am, as I say, bound to draw to attention – I hope this is part of what Justice Hayne had in mind – that there has been in this Court, and there is an instance of it, a licensing or registration scheme which has explicitly been regarded as administrative.  Now, I am entitled, of course, to add, but there does not seem to have been any glimmer of the present argument in that case, but nonetheless I draw it to attention.

HAYNE J:   And ABT v Bond is to like ‑ ‑ ‑

MR WALKER:   Yes, quite so, and it is very express in Bond.

HAYNE J:   Yes.

MR WALKER:   Your Honour Justice Hayne also asked for examples of a liquidator’s duty apart from the not so terrible ones that we were found of guilty of breaching.  Perhaps some fairly precise ones not involving a lot of evaluative assessment would be found in sections 477(2A) and (2B) and they apply as well in voluntary windings up:  see section 506(1A) in relation to compromises and agreements by liquidators.

HAYNE J:   Sorry, which provision was that?

MR WALKER:   Section 477(2A) and (2B).  In linguistic form they are simple prohibitions:  “must not”.  No doubt there would be some findings required to be made but not a lot of agonised evaluation.

HAYNE J:   Unless one reads the propriety provision, that is, adequately and properly perform, as adding a second ‑ ‑ ‑

MR WALKER:    A second line.

HAYNE J:   ‑ ‑ ‑ a second and additional ‑ ‑ ‑

MR WALKER:    Yes.  A second standard which says, “Well, you have complied” ‑ ‑ ‑

HAYNE J:   No, “You haven’t complied, but really your failure was not all that bad”.  That is the inverse of the argument you so comprehensively attributed to the Commonwealth and then promptly demolished, Mr Walker.

MR WALKER:    Your Honour is right, with respect.  I had posited two lines and one was higher than compliance but has this label of “adequate

and proper”.  Your Honour has asked me to consider the possibility of a third line below that one.  I am not sure that the Commonwealth has put that, with respect.  The more straightforward way of accommodating that kind of circumstance is, of course, at the discretionary stage – and it is a discretion – as to whether to do anything, particularly by way of cancellation or suspension.  May it please the Court.

GLEESON CJ:   Thank you, Mr Walker.  Yes, Mr Perram.

MR PERRAM:   Your Honour, we adopt the submissions of Mr Walker in reply.

GLEESON CJ:   Thank you.  Mr Street.

MR STREET:   Your Honour, subject to what my learned friend said about the military courts lying outside Chapter III, I adopt the substance of what my learned friend said, but can I add a few matters.  My learned friend, Mr Burmester, suggested that the ASIC hearing was one in private.  Section 53 in fact identifies that it is to be in public, although there is a power to hold it in private if required.

In relation to the legal profession, as raised by the Chief Justice, we respectfully submit that there is a material distinction in relation to what might be the position there with what arises here in respect of what is plainly federal jurisdiction and in circumstances where, as we have sought to identify, you have a vesting of original jurisdiction pursuant to section 75 of the Constitution itself and pursuant to section 77 in the courts identified, Supreme Court and State Courts, both through the corporations provision and through the Judiciary Act.

It is in those circumstances that it is a materially different position which arises in the present case where one has a power vested in the courts pursuant to the provisions I have referred to in sections 206C to 206E. Nowhere did my learned friend suggest that there was not, in fact, a controversy in respect of disqualification on the grounds of contravention falling within those provisions. It is in those circumstances that we respectfully submit one could not find that there is, in fact, anything other than judicial power being exercised under section 206F where it seeks to, in essence, raise grounds that could fall otherwise within those provisions.

GUMMOW J:   The problem, Mr Street, is this, and it is fundamental.  There are many sorts of judicial power, many cases which might answer the description of judicial power but which do not fall within the judicial power of the Commonwealth.  You cannot argue backwards and say, “As a matter of federal jurisdiction this falls within one of the slots, ergo it involves the exercise of judicial power of the Commonwealth”.

MR STREET:   I accept that.

GUMMOW J:   You have to start off by finding the content of the judicial power of the Commonwealth.  What Mr Burmester puts to you is there is not in that postulated situation an occasion for the exercise of judicial power at all.

MR STREET: Your Honour, we seek to say that there is by reason of the fact that one has, in essence, an issue which constitutes a matter by reason of the controversy as to disqualification to which the Commonwealth would be a party, going to the Constitution section 75, original jurisdiction, going to section 77, confer, going to the provisions of ‑ ‑ ‑

GUMMOW J:   All right.  I will not put it to you again.

MR STREET:   If your Honours please.  Your Honours, can I also indicate this, that we say there is a material distinction between the category which one was dealing with with solicitors because directors are no category of person of the kind dealt with with lawyers, public service, the other disciplinary cases, nor is this a licensing scheme. 

Your Honours, finally we turn to the matter in relation to the overlap that we identified.  In our respectful submission, that overlap, as a matter of character, was in fact the same.  The criterion of whether justified is the same in 206C, D and E as in F and the criterion to which regard may be had is, in my respectful submission, the same.  If the Court pleases.

GLEESON CJ:   Thank you, Mr Street.  We will reserve our decision in this matter and we will adjourn until 10.15 am tomorrow.

AT 4.04 PM THE MATTERS WERE ADJOURNED