Heinrich, Ex parte - Re Justice Heerey

[2001] HCATrans 358

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry  
  Adelaide  No A25 of 2001

In the matter of -

An application for a Writ of Mandamus against JUSTICE PETER CADDEN HEEREY

First Respondent

JUSTICE CATHERINE MARGARET BRANSON

Second Respondent

JUSTICE KEVIN EDMUND LINDGREN

Third Respondent

Ex parte

STEPHEN GLENN HEINRICH

Prosecutor

KIRBY J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

FROM ADELAIDE BY VIDEO LINK TO CANBERRA

ON MONDAY, 8 OCTOBER 2001, AT 3.17 PM

Copyright in the High Court of Australia

MR S.G. HEINRICH appeared in person.

HIS HONOUR:   On the last occasion you had Mr Gargan, is that correct?

MR HEINRICH:   That is correct.  I was unable to have him ‑ ‑ ‑

HIS HONOUR:   And he is not here today?

MR HEINRICH:   No, he is not, sir.

HIS HONOUR:   Very well, that is all right. 

I have a certificate from the Registrar indicating that the named respondents, Justices Heerey, Branson and Lindgren, submit to the order of the Court save as to costs.  Yes, what do you have to say for yourself?

MR HEINRICH:   Sir, I did fax - I believe you may have already received my ‑ ‑ ‑

HIS HONOUR:   Yes, I have received your faxed written submissions.

MR HEINRICH:   In fact, that recent one on Friday, sir, was my oral submission as a forewarning to save time.  Am I able to just read my submission to you?

HIS HONOUR:   Yes.

MR HEINRICH: Thank you. May it please your Honour, the prosecutor seeks relief under section 75(v) of the Constitution, principally by way of mandamus in respect of the decisions made by the Justices of the Full Court who refused to order, pursuant to section 86 of the Bankruptcy Act 1996, the account of mutual dealings being taken between the parties.

I rely on the published reasons in Lipohar v The Queen in the High Court of Australia where at [50] Chief Justice Gleeson said:

This court is the final appellate court for the nation.  When an appeal is dealt with in this Court, and its reasons are published, those reasons will form part of the common law of Australia and will bind all courts in the country.

I further rely on the Full Court judgment in Gye v McIntyre in the High Court where, at 18 Justice Mason said:

Section 86 is a statutory directive (“shall be set off”) which operates as at the time the bankruptcy takes effect. It produces a balance upon the basis of which the bankruptcy administration can proceed. Only that balance can be claimed in the bankruptcy or recovered by the trustee.

If I can just move on down further to save a bit of time, he then goes on to say:

The section is self‑executing in the sense that its operation is automatic and not dependent upon “the option of either party” –

and further down he stated:

it would be wrong to attribute to the legislature the illogical intent that a directive which was intended to be otherwise automatic in its operation and to apply in circumstances where set‑off produced a nil balance should not operate at all unless and until either the bankrupt’s creditor saw fit to exercise the option of lodging a formal proof of debt or the trustee in bankruptcy instituted proceedings for recovery of a debt due to the bankrupt.

At 24 he said:

s.86, it encompasses, as a matter of ordinary language, commercial transactions and the negotiations leading up to them. Where a fraudulent misrepresentation is made in the course of such negotiations, the fraudulent misrepresentation is itself part of the relevant “dealings”.

So, your Honour, I seek that the High Court uphold its judgments, its published reasons for judgment, and injunctive relief directed to the Federal Court Justices Heerey, Branson, Lindgren in respect of a decision made by them on 28 May 2001.

Order 55 rule 1 requires, by sub‑rule (2), that the application initially be for an order nisi and that is what this application is, but that rule also provides, by sub‑rule (4) that your Honour, at your Honour’s discretion, if the justice of the case so requires, may make an order absolute in the first instance and it will be my submission that this is such a case.  Firstly, the application is for an order nisi, as the rules require, inviting your Honour’s attention to the power to make an order absolute if your Honour thinks the case is one in which justice so requires, that is Order 55 rule 1(4).  Thank you.

HIS HONOUR:   Yes, thank you, Mr Heinrich.  As you would expect, I have read all the papers before the hearing commenced today and it seems to me that you have three problems that I have to bring to your notice so that you can say whatever you want to about them but they are, as it seems to me, very great difficulties in your case.

The first problem is a procedural one which I am sure, if the other ones were not there, we could overcome, and that is that you have named only the justices of the Federal Court as the respondents and they have submitted – so that we have no party as a contradictor before the Court of your claims.  The person who would be the natural contradictor would either be the Commonwealth Bank or the trustee, and you have not joined either of those as a party to the proceedings to sharpen the dispute which would exist and to uphold the decision of the court below.  That is the first problem and I think we could probably overcome that if the second and third problems did not exist.

The second problem is that you probably know that for appeals from the Federal Court you need special leave of the High Court which is granted by two or three Justices before you get into this Court.

Instead of coming up that ladder, you have sought to come up by a direct proceeding into the Court in its original jurisdiction.  Whilst it has been held that the judges of the Federal Court are officers of the Commonwealth and therefore amenable to the original jurisdiction, normally, because those remedies are discretionary, the Court would not give those remedies unless there was some good reason why you should bypass the appellate procedure.  You have not sought special leave to appeal from the decision of the Full Court.  You have simply come straight here under the original jurisdiction. 

The third problem, which is, I think, the most fundamental, is that the constitutional writs which you have invoked are not available just as another kind of appeal.  They are only available if you can show that the judges did not exercise their discretion and their powers – in other words, that they have made an error that took them out of their jurisdiction, as distinct from making a mistake within their jurisdiction.  It seems to me, reading the material you have put before the High Court, that what you are complaining about is that they made a mistake.  But that is the kind of complaint which is normally addressed in an appeal, for which you need special leave, and not in proceedings such as you have brought, coming directly to the Court under a constitutional writ. 

So I know it is very difficult for you – you are a farmer and it is difficult for you to understand all these things, though you have probably had a bit of experience with the courts in the last couple of years, but they are three significant problems that I see in the way of my granting you the relief that you have sought today.  I have explained them to you so that if you want to say anything that helps to overcome them, then this is your chance.  Do you understand what I have just said to you? 

MR HEINRICH:   Sir, I have tried to resolve that.  Of course, I will need to re‑read the transcript later to take it in fully but ‑ ‑ ‑

HIS HONOUR:   Yes, I know it is difficult for you without a lawyer, but they are the three problems.  The first, I think, for the moment, you can forget about because we could adjourn the proceedings and join the trustee or the Bank, and that is not such a big hurdle.  In this Olympic hurdle you have undertaken, the first hurdle you can probably get over, or I would help you over that one as far as I could.  But that still leaves hurdle number two, which is that you have come here instead of seeking special leave to appeal from the Federal Court.

MR HEINRICH:   Can I answer on that one, Sir?

HIS HONOUR:   Yes.

MR HEINRICH:   Yes.  I was advised by counsel on that point because of what happened over the long duration of this matter which is now nearly nine years, sir, and so I acted on that advice.  But that is my answer to that and I will be honest, I took that advice.  I did not question it.

HIS HONOUR:   I can understand he probably thought this would be a quick way to get you in because you might have problems getting in on the special leave route.  On any given special leave day, there would normally be about 12 applications for special leave and only one or two are granted special leave, whereas for a constitutional writ, you do not need special leave.  You just come straight to the Court.  But the constitutional relief is discretionary and unless we exercised our discretion very carefully in the case of Federal Court judges, everybody with a grievance against a Federal Court decision would forget about appeals and they would just come here under the constitutional relief.  So that would circumvent the whole procedure for special leave which is there for the protection of litigants generally and to make it a level playing field for all litigants who want to get into the High Court.  Do you understand what I have said?

MR HEINRICH:   Yes, I do, sir, and I believe that I had not been fairly treated through this process with the – I know it is not the place to argue my case and I will do not that.  With the evidence that I have put before the Court I believe I have not fairly been treated, sir, and - - -

HIS HONOUR:   I know that is your belief and if you get into the Court either by way of special leave or by a constitutional writ, then you will be heard to advance that argument and the Court will decide it on its merits.  The difficulty is you first got to get into the Court and the way to do that is by a special leave application or by a constitutional writ and you have chosen the latter, but that means you have bypassed the special leave procedures and we have got to be very careful before we allow litigants from Federal Courts to do that, otherwise the whole scheme of special leave would be undone.

MR HEINRICH:   I understand that.

HIS HONOUR:   The most substantial problem you have got is that you would have to show not just that the judges of the Federal Court had made a mistake, as you contend, but that they had gone outside their jurisdiction as judges of the Federal Court, and that is a difficult task for you to undertake.  I am sorry that I cannot make that clearer because I have said myself in a case that it is very difficult to understand the distinction, and if I find it difficult to understand, then you will find it difficult to understand.

MR HEINRICH:   I am sure, sir.

HIS HONOUR:   It is a distinction which is upheld by decisions of this Court and, on the face of things, your complaint about the judges of the Federal Court would seem to me to be a complaint that they made a mistake within their jurisdiction, not that they did not exercise their jurisdiction or fail to do so according to law.

MR HEINRICH:   I believe, sir, that they did fail to exercise their jurisdiction.  They had the opportunity to do so, and that would have resolved, and would resolve, this matter.  But if this matter is let go under the process that it has taken, I will be wrongfully dispossessed of my property.  I cannot plead it any higher than that and that is the truth of the matter, and I have nowhere else to go.

HIS HONOUR:   I understand what you say, but it would seem to me that the proper way for you to have challenged that would have been to seek to appeal from the decision of the Supreme Court of South Australia, which you never did.

MR HEINRICH:   I have been told that, sir, and I have learnt along the way that that was something I was totally unaware of.  Again, I was advised that this was a police matter and I went to the police.  That matter was not pursued by the police because they refused to look at the evidence I put before them, and that is documented, sir.  I believe that there was nowhere else that I could go.  During the trial process, I had two weeks of counsel.  That is all I could afford.  He pleaded fraud specifically and the Bank’s officer was taken aside and counselled during the trial process.  In fact, there was perjury.

We went to appeal – two judges were against and one was for on having the pleadings – having counsel’s pleadings done properly, entered into my pleadings that I had done myself, but we failed there.  But I do not understand why, because the evidence was there, and from there my whole counterclaim and my pleadings were removed by Justice Nyland, so I had nothing.  I had nothing to fight them with.  I had nothing left in my pleadings to fight them with.

HIS HONOUR:   I understand all this, but you see there is a provision in the Constitution which says that everybody, including judges, have to give full faith and credit to the proceedings of a court of the State. Therefore, if the court has a judgment of the Supreme Court of South Australia, you cannot just ignore it. You have to accept that as a judgment against you. Therefore, that was the foundation, as I understand it, of the Commonwealth Bank bringing the bankruptcy proceedings against you.

It may be that you have some other remedies – I do not know, and I cannot advise you about them – but all I can deal with is this application which you have put before me and it has the three difficulties I have mentioned and the further difficulty that when you look at the foundation of your case, it is based on what seems to be an attempt, without having an appeal, to circumvent the judgment of the Supreme Court of South Australia, which was against you. My obligation under the Constitution is to respect the judgment of the Supreme Court of South Australia, and that is the obligation of the Federal Court and everybody else in the country.

MR HEINRICH:   I understand where you are coming from, sir, and I realise that now, but I did not realise that then.  I did what I believed and was told was correct at the time.  I also was advised that once a new action was started in the Federal Court, that there was an opportunity there to raise and bring to light those evidences that were not allowed in the other court.

Now, action has been taken by the trustee, who has refused to even correspond with me, and yet I have provided him with evidence.  And so that is why I am here at the High Court, sir.  I am still trying to have the trustee – and I was there this morning with documents, requesting that he invite me to at least lead him to those evidences ‑ ‑ ‑

HIS HONOUR:   Well, he is the trustee of your property, and he ought to respond to your letters ‑ ‑ ‑

MR HEINRICH:   He has not, sir. 

HIS HONOUR:    ‑ ‑ ‑ and if he does not do so, you should be in touch with the administration of bankruptcy, because he is obliged to deal with your requests and to respond to your correspondence.  I would suggest that you telephone him, rather than writing him letters.  He ought to respond to you if you have reasonable complaints.  I mean, if you were a person who was jumping up and down and insulting people, that might be a different matter, but that does not seem to be the way you go about things.  So you can show him this transcript.  As far as I am concerned, he is holding an office under an Act of the Commonwealth and he ought to respond to your inquiries. 

MR HEINRICH:   Thank you, your Honour.  That is very important to me, in what you have told me. 

HIS HONOUR:   Anyway, I do not think you can say anything that will help me to overcome the three hurdles, especially the second and the third.  I think they stand in the way, I am afraid, of my giving you the relief that you seek.  You do present an affidavit which I have on the file.  It is dated 2 July 2001.  I just have to ask you formally:  you read that affidavit in these proceedings, is that correct?  You present that affidavit to me in support of your application? 

MR HEINRICH:   That is correct.  Should I read that then, now? 

HIS HONOUR:   No.  I have read it, but I just wanted to get it onto the record. 

MR HEINRICH:   Yes, thank you. 

HIS HONOUR:   There was no other affidavit in the proceedings, was there? 

MR HEINRICH:   No, there was not, your Honour. 

HIS HONOUR:   No.  Thank you very much.  Well, you can just sit down for a moment, and I will give my reasons and pronounce my orders. 

I have before me an application for an order nisi for the constitutional writ of mandamus directed to Justices Heerey, Branson and Lindgren, judges of the Federal Court of Australia (“the respondents”).

The background facts

The applicant for relief is Mr Stephen Heinrich (“the applicant”). He seeks the relief pursuant to the Constitution s 75(v). There is no doubt that the respondents are “officers of the Commonwealth” within that paragraph of the Constitution. They are therefore amenable to the writ: see R v Watson; Ex parte Armstrong (1976) 136 CLR 248 at 263 and R v The Judges of the Federal Court of Australia; Ex parte Pilkington ACI (Operations) Pty Limited (1979) 142 CLR 113 at 123.

The applicant asks that the writ issue to command the respondents to vary the order of Mansfield J made in the Federal Court in Adelaide on 6 September 2000 to “order that mutual dealings be taken as requested of them on 28 May 2001”.  An additional order is sought that all public examination proceedings involving the applicant be stayed until a full and complete account of the mutual dealings is taken.

The respondents constituted the Full Court of the Federal Court of Australia.  On 28 May 2001 that court unanimously dismissed the applicant’s purported appeal from a judgment of Mansfield J.           By his judgment, Mansfield J ordered that a sequestration order be made against the estate of the applicant.  The judge appointed a registered trustee as trustee of that estate.  That trustee has not been named as a respondent to these proceedings.  Nor has the creditor that instituted the original bankruptcy proceedings against the applicant in the Federal Court been named as a respondent.  That creditor was the Commonwealth Banking Corporation (“the Bank”).  The named respondents have submitted to the orders of this Court. 

The facts recounted in the respondents’ reasons in the Full Court of the Federal Court indicate that the relief which the applicant sought in the Full Court, and now seeks to revive in these proceedings, was founded on s 86 of the Bankruptcy Act 1966 (Cth) (“the Act”). That section provides (with emphasis added):

Mutual credit and set-off
86(1)  Subject to this section, where there have been mutual credits, mutual debts or other mutual dealings between a person who has become a bankrupt and a person claiming to prove a debt in the bankruptcy:

(a)  an account shall be taken of what is due from the one party to the other in respect of those mutual dealings;
(b)  the sum due from the one party shall be set off against any sum due from the other party; and
(c)  only the balance of the account may be claimed in the bankruptcy, or is payable to the trustee in the bankruptcy, as the case may be.

(2)  A person is not entitled under this section to claim the benefit of a set-off if, at the time of giving credit to the person who has become a bankrupt or at the time of receiving credit from that person, he or she had notice of an available act of bankruptcy committed by that person.

The section appears in Part VI of the Act (“Administration of Property”). It is within Division 1 of that Part (“Proof of Debts”). Its purpose is to provide for the accumulation of the nett debts and liabilities of the bankrupt, incurred before the date of his or her bankruptcy. Before the respondents in the Full Court the applicant (through Mr Gargan who was permitted to represent him but who has not appeared today) made it clear that the taking of the account was sought for the purpose of establishing that a judgment of the Supreme Court of South Australia, made after a contested hearing in that court between the Bank and the applicant, was wrong.

No appeal has been instituted from that judgment of the Supreme Court. It remains valid and in force. By s 118 of the Constitution, full faith and credit must be given to that judgment as a “judicial proceeding of [a] State”. At the hearing in the Supreme Court between the Bank and the applicant, the applicant was represented by counsel. Mansfield J found that the applicant had enjoyed a proper opportunity in that court to litigate the issues. He did not appeal from the judgment. He is now well out of time to do so.

The decision of the Full Federal Court

The difficulties facing the applicant’s proceedings before the respondents in the Full Court were recognised by the respondents in their reasons for judgment. 

First, s 86 of the Act has application only where a person has become bankrupt. The section therefore assumes the validity of the sequestration order against the bankrupt’s estate. In the proceedings before the Full Court, Mr Gargan, for the applicant, made it clear that the applicant did not contest the order for sequestration of his estate. The respondents in the Full Court had to deal with the appeal before them on that basis.

Secondly, s 86 governs the administration of a bankrupt’s estate. The Full Court was not concerned, as such, with the administration of the applicant’s estate but with the purported appeal by him from the judgment of Mansfield J. It would not have been competent for the respondents, exercising the appellate jurisdiction of the Federal Court in an appeal from a judgment of Mansfield J, to order the taking of an account under s 86 of the Act.

Thirdly, in any case, the appeal from the judgment of Mansfield J appears, on its face, bound to fail. His Honour had exercised a discretion under s 30(3) of the Act to decline an order for jury trial. The applicant contested that decision. However, no error was demonstrated in that exercise of discretion. His Honour had also declined to go behind the judgment of the Supreme Court of South Australia, upon the basis of which the bankruptcy notice had been served on the applicant in the first place. His Honour was bound to take that position.

The applicant had, therefore, committed an act of bankruptcy on 19 April 2000 when he failed to comply with the bankruptcy notice, either in time or at all.  In the circumstances, the decision of the primary judge and of the Full Court disclose no error.  Accordingly, the challenge to them was misconceived.

Fourthly, the respondents in their reasons in the Full Court pointed out that, before another judge of the Federal Court (O’Loughlin J), the applicant had sought, without success, to establish that he had a counterclaim, set‑off or cross‑demand against the Bank.  O’Loughlin J found that the applicant had failed to allege or establish that he had repaid the moneys advanced to him by the Bank.  No application for leave to appeal from the order that followed that decision was before the Full Court.  The respondents were only concerned with the purported appeal from the judgment of Mansfield J.

Reasons for refusing to issue mandamus

Before me the applicant asked not only for an order nisi for mandamus but also for an order absolute, pursuant to Order 55 rule 1(4) of the High Court Rules.  I shall, however, treat his application as one for an order nisi.  The principle governing the issue of orders nisi is not in doubt.  An order nisi should be granted if the applicant demonstrates a prima facie or arguable case:  see Re Brennan; Ex parte Muldowney (1993) 67 ALJR 837 at 840, 116 ALR 619 at 624; and Re The Australian Nursing Federation; Ex parte State of Victoria (1993) 67 ALJR 337 at 382, 112 ALR 177 at 183. For a number of reasons I have concluded that this application must be refused.

First, there are procedural problems.  The applicant has not named a respondent with an interest to contradict his claims.  The most obvious of the possible respondents for that purpose, his trustee, has not been named.  Nor has the Bank been named as a party or given notice so that it could consider applying to intervene.  The party or parties with an interest to resist the relief sought by the applicant are not, therefore, before this Court.  To that extent, the proceedings are irregular.  In a proper case, a defect of this kind could be cured by adjournment and a direction to join the interested party or parties who could act as contradictor.  Similarly, a bare writ of mandamus would not avail the applicant whilst the judgment of the Federal Court stood unaltered.  However, this defect might also be cured by appropriate amendment which the applicant might be allowed in an otherwise proper case.  I will not, therefore, treat these considerations as decisive.

Secondly, the applicant has not sought special leave to appeal to this Court from the judgment of the Full Court of the Federal Court which he challenges. Special leave is required by s 33(3) of the FederalCourt of Australia Act 1976 (Cth). Pursuant to that subsection, no appeal may be brought to this Court from a judgment of the Federal Court of Australia unless this Court “gives special leave to appeal”. Instead of seeking special leave, to engage the appellate jurisdiction of this Court, the applicant has proceeded in the original jurisdiction of this Court by way of the constitutional writ of mandamus.

Although this Court has the jurisdiction to provide that relief against the respondents, and the power to do so if the other requirements of law are fulfilled, ordinarily, in a case of a judgment of a federal court, where an appellate facility is available, this Court will, as a matter of discretion, refuse to issue a constitutional writ. It will do so where the applicant has failed, or omitted, to engage the appellate jurisdiction as provided by s 73 of the Constitution. This approach is taken to ensure that parties, with rights to seek special leave to appeal, do not, without good reason, bypass the primary means envisaged by the Constitution for the correction of alleged judicial error nor circumvent the legislative arrangements that have been adopted requiring that special leave first be obtained in appeals to this Court: see Federal Court of Australia Act 1976 (Cth), s 33(3), and compare Judiciary Act 1903 (Cth), s 35 and 35A.

In Re Carmody; Ex parte Glennan (2000) 74 ALJR 1148 at 1156 [37], 173 ALR 145 at 156, I pointed out that, although no hard and fast rule can be laid down, where the application for a constitutional writ is made without invoking an available appellate right, the writ may be regarded as premature if the party’s complaint should properly have been prosecuted first as an appeal. The invocation of the original jurisdiction of this Court under s 75(v) of the Constitution was refused in Glennan as a matter of discretion. The same approach should be adopted here. No other approach would uphold the constitutional scheme and the statutory procedures for special leave which are a protection for litigants generally, as well as for this Court. Were any other approach to be adopted, every party, dissatisfied with a decision of federal judges or magistrates, might seek to engage the original jurisdiction of the Court under s 75(v) of the Constitution, asserting actual or constructive failure on the part of those judicial officers to exercise their jurisdiction in accordance with law, thereby circumventing the statutory requirements of special leave.

Thirdly, in any case, mandamus pursuant to s 75(v) of the Constitution is, on current doctrine, not available for substantive errors of law as such, even a gross error of law, on the part of the officer of the Commonwealth concerned. It is only available for errors of jurisdiction: see Re Refugee Review Tribunal; Ex parte Aala (2000) 75 ALJR 52 at 61 [41] and 81 [142].

Mandamus is available to correct an actual or constructive failure on the part of a public official to carry out a duty imposed on that official by law.  Mandamus is also available to compel the correct exercise of jurisdiction where an improper exercise is shown which is wholly ineffective.  On the face of things, there were no such failures on the part either of Mansfield J or of the respondents constituting the Full Court in this case.  I concede that the dividing line between errors of jurisdiction and errors within jurisdiction is often hard to define precisely:  see Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 74 ALJR 1348 at 1366‑1369 [78]‑[86]; Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 75 ALJR 889 at 927‑928 [211]‑[212], 179 ALR 238 at 290‑291. However, if anything, the complaints of the applicant against the respondents are of the latter kind of error. Under the current authority of this Court, such errors are not amenable to the constitutional writs, including mandamus.

Conclusion and order:  application refused

When, finally, I look back and examine the matters which the applicant wishes to raise, they all appear to be unarguable, at least in the present proceedings.  No error of law has been shown that would attract the writ of mandamus.  Accordingly, the applicant has demonstrated no reasonably arguable case.  It follows that his application must be refused. 

For the reasons which I have just given, Mr Heinrich, I have refused your application.  Those reasons will be available to you within a couple of days, when they have been typed up.  Thank you very much. 

That concludes these proceedings.  The Court will now adjourn until 4 pm Canberra time (2 pm Perth time) when there will be a video link to Perth.

AT 3.51 PM THE MATTER WAS CONCLUDED