Homestead Award Winning Homes Pty Ltd, Re Madgwick

[1996] HCATrans 134

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide  No A13 of 1996

In the matter of -

An application for a Writ of Prohibition against THE HONOURABLE JUSTICE RODNEY NEVILLE MADGWICK

First Respondent

DENNIS TURNER

Second Respondent

and

HOMESTEAD AWARD WINNING HOMES PTY LTD

Prosecutor/Applicant

KIRBY J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 19 APRIL 1996, AT 9.53 AM

Copyright in the High Court of Australia

MR D.J. BLEBY, QC:   I appear for the applicant, if your Honour pleases.  (instructed by Michell Sillar Lynch & Meyer)

HIS HONOUR:   Thank you, Mr Bleby.  Is there to be any appearance for the respondents, or any of them.

MR BLEBY:   Not as I understand it, your Honour, although they are aware of these proceedings.

HIS HONOUR:   Yes.  Can you demonstrate - this is an ex parte application?

MR BLEBY:   Yes.

HIS HONOUR:   Is the practice of the Court, though it is ex parte, not to provide notice of the proceedings to the other parties?

MR BLEBY:   I believe that is the case, your Honour.

HIS HONOUR:   In New South Wales, although proceedings on leave applications are by the rules ex parte, the practice is to give notice but you tell me that the practice in the High Court is not to give notice in ex parte applications?

MR BLEBY:   I understand that is correct, your Honour.

HIS HONOUR:   Have they in fact been informed or not?

MR BLEBY:   They have been informed.  In fact, the matter came before his Honour Justice von Doussa in the Industrial Relations Court for mention and his Honour made an order vacating the sitting days which had been fixed for the matter.

HIS HONOUR:   They were 4 April, I think.  Early in April.

MR BLEBY:   Yes, they were in April.  The reason was for the purpose of making this application and the respondents were represented.  At least, the second respondent was represented in those proceedings.

HIS HONOUR:   There are three matters I need your assistance on.  The first is whether it would not be more convenient to the Court - that is to say, this Court - if the matter went to trial upon the basis that if it went to trial and the charge was dismissed on the merits, then we would not need to be troubled.  The second is whether it would not be more helpful to the Court to have the course followed that the proceedings go to trial and you exhaust any rights of appeal that you have to the Full Court of the Industrial Relations Court of Australia.  The third question is this:  following the recent Federal election there has been some public speculation about major amendments to the industrial relations legislation.  Whether those amendments would be retrospective or not is not at all clear at this stage but presumably, that having been a major issue in the new government’s programme, it would be revealed before too long and it might relieve the Court of the necessity to deal with the matter; it might relieve the Industrial Relations Court of the necessity to deal with the matter.

Those three questions are reasons that lead me to ask whether it is not, at this stage at least, a reason to pause before granting the order nisi that you seek.

MR BLEBY:   As to the last matter, your Honour, I am conscious of, in very general terms, what I understand the present government’s intention to be and, of course, I cannot speculate as to whether such legislation would be retrospective.  I would suspect that it would be unlikely to be.  It is not just a procedural matter which would take effect, of course.  It may have some retrospective effect, but a substantive matter.  It is most unusual, of course, that legislation of that nature is made retrospective, although I cannot overlook that possibility.

HIS HONOUR:   I also cannot speculate about the matter and we do not really know but, I think, for example, upon the election of the Whitlam Government, steps were taken immediately to vacate prosecutions under legislation which was an important plank in the election contest in 1972.  This legislation was undoubtedly an important issue in the recent election and a lot of criticism and defence was targeted at the particular provisions under which your client was prosecuted.  It is just a question of whether it would not be more convenient to wait and see what the new legislation, if any, provides, or whether that is something that can take its course, and if it is solves the problem, then that can be announced to the Court and the matter can be disposed of at that stage.

MR BLEBY:   That is a possibility.  The other possibility, of course, is to adjourn this application until we know what the form of that legislation might take.

HIS HONOUR:   Would you say something about the first two steps, that is to say, that you should run the gauntlet of the trial and any appeal?

MR BLEBY:   Yes.

HIS HONOUR:   I am not sure whether an appeal lies in such a case.  I assume it does.  The appeal provisions in the Industrial Relations Act are rather unusual.

MR BLEBY:   They are rather unusual.  There would have to be an appeal from a single judge to the Full Court of the Industrial Relations Court and then an appeal by leave from that court to this Court.  It is ordinary leave, not special leave.  So there would need to be at least two hearings before the matter got back to this Court.  I can only say perhaps in relation to the convenience of the parties and the resources that might necessarily be involved in that that the trial of the facts could take several days, but so far as the validity of the sections are concerned, the facts are in a very small compass, and that is that my client is a constitutional corporation for the purposes of the Act.  It trades solely within the State of South Australia, so there is no interstate trade element on which jurisdiction might otherwise be founded.  It is a matter which relies solely on the corporations power.

The second respondent is an individual.  The contract is not in dispute, or at least the existence of a contract is not in dispute, and given that, the constitutionality or the validity of the two sections in question comes down, as I say, to facts in a rather small compass, and my client took the view that it was reluctant to be required to plead to a section which might be otherwise invalid and could be determined without any further hearing on the facts.

HIS HONOUR:   I understand that, but experience in another place teaches that it is usually better to deal with legal arguments after facts have been found, and then you avoid the late discovery of facts that are alleged to be crucial to the resolution of the legal rights of the parties.  There is also a doctrine which is, it is probably fair to say, stronger in the United States of America than it is in this country, that one should embark on a constitutional challenge at the end of the line and deal with matters within the ordinary legal parameters, assuming constitutional validity until it is necessary to broach the question of whether a statute is unconstitutional.  Justice Murphy said various things supporting that view in this Court.

MR BLEBY:   I appreciate that, your Honour, and I appreciate the strength of what your Honour is putting to me.  I can only say that, on the other hand, the question of validity is a relatively point ‑ short in the sense of facts ‑ and can be disposed of relatively quickly in a hearing, probably, of a day or so, and that may, if successful of course, put an end to all the proceedings; if unsuccessful, well then, the matter would proceed.  But I appreciate the difficulties that can be seen to emerge on occasions when different facts come to light which may render that question unnecessary to dispose of in some other way.  I can only urge upon your Honour that there is a desire in my client to challenge the validity of those two sections, which can be done in the context of these proceedings and probably more economically in the long run, perhaps, than going through a hearing on the facts and a series of appeals before it can get to this Court, because the validity of the section would, I think, have to be accepted at least by the court at first instance and probably the Full Court of the Industrial Relations Court.

HIS HONOUR: Is that so? You would be entitled at first instance to challenge the validity. You will remember that many section 92 cases came up before magistrates and were dealt with at first instance, and then on appeal and then on further appeal to this Court. So that it is not at all unusual to have these legal arguments. Indeed, it is one of the strengths of our constitutional arrangements that the Constitution permeates the law throughout the nation and can be the subject of submissions in the lowest, as well as the highest courts.

MR BLEBY:   I appreciate ‑ ‑ ‑

HIS HONOUR:   Tell me, what is the distinction between the point that was determined in Re Dingjan and this case?  Is it the subsection or the paragraph of the Act that was dealt with in that case?  Is that the point?

MR BLEBY:   Re Dingjan relied on section 127C(1)(b). That is, it was in relation to a contract relating to the business of a constitutional corporation, and that was the only paragraph which could support the action that was being taken in that case. Our case is different in that the contract would come within paragraphs (a) and or (c) as well, and so far as the application seeks to challenge the validity of 127A, or that group of sections, it would be seeking to go further than Dingjan’s Case and, in particular, some of the submissions of the State of Victoria that were made in that case, which were not necessary for the decision in Dingjan’s Case as it turns out, we would want to put. But I think the primary question would be the validity of section 334(1)(ba), which is the section which gives rise to these actual proceedings.

HIS HONOUR:   Was that a matter that came before the Court in Dingjan?

MR BLEBY:   No, it is not.

HIS HONOUR:   That is the retaliation section, is it, the alleged retaliation?

MR BLEBY:   I would call it victimisation section, yes.  That is the subject of these proceedings, of course ‑ ‑ ‑

HIS HONOUR:   But that is in turn posited upon what one might call the offence provision and it gets no better or lesser validity than the provisions in section 127A.

MR BLEBY:   Certainly if 127A is invalid, that part of 334(1) would have no application.  We would want to put an independent argument that even assuming the validity of 127A so far as it affects the contract to which my client was a party, there can be no support from the corporations power or anywhere else for that particular paragraph in section 334 and it is by parity of reasoning, I suppose, of the majority in Dingjan’s Case where the section was invalid because it could have sufficient connection in some cases, it may not in others. Likewise in this case one can imagine, if I might just give an example perhaps, of a contractor as an individual who engages a bricklayer contractor who terminates the contract because the bricklayer contractor says to him, “The last company I worked for terminated my contract or injured me and I am taking proceedings in the Industrial Relations Commission under section 127A,” whereupon the second contractor says, “In that case I’m terminating your contract.”

Now, there is no connection in that sort of situation with the corporations power at all and it would be our argument that, although in some cases section 334 might have a valid application, in others it will not and it would fall for the same reason as in Dingjan’s Case, even assuming, as I say, the validity of 127A because this is one step removed from the actual coalface, as it were, of the corporations power.

HIS HONOUR:   Yes.  One course that is open to a Justice in this circumstance is to direct that the proceedings be returned before a Full Court.  I am referring to Order 55 rule 2:

When application is made to a Justice in Court or in Chambers, or otherwise, he may, if he thinks fit, direct that the application be made by notice of motion to a Justice in Court or to a Full Court, and may adjourn the application so that notice of the application may be given accordingly.

That would be an alternative to simply adjourning the proceedings to await any legislative development or to rejecting the application and sending the matter back to the first instance for trial and, if necessary, appeal.

MR BLEBY:   Yes.

HIS HONOUR:   It is possible that the Court might, if examining the papers it considered that it was appropriate to have the matter argued, return the whole proceeding before the Full Court at that time on the return of your motion.

MR BLEBY:   “The Full Court” is the Full Court of this Court?

HIS HONOUR:   Yes.  These are the High Court Rules.

MR BLEBY:   Yes, I appreciate that, your Honour.

HIS HONOUR:   That would necessarily not happen for a little time, but that would permit the ‑ ‑ ‑

MR BLEBY:   Give a bit more time to see what happens.

HIS HONOUR:   ‑ ‑ ‑ opportunity to see what happens in relation to the industrial relations legislation.  Of course it is always possible that legislative amendments are introduced but do not pass the Parliament, so that it may be that that is not a matter that would delay the Court because the Court would normally just deal with the matter on the basis of the law as it stands.  Do you have anything to say if I were to take that course and simply return the matter before the Court so that the application could be made to the Full Court?

MR BLEBY:   As I understand it, it returns this application to the Industrial Relations Court.

HIS HONOUR:   I do not think so.  I think it says, “or to a Full Court”, and that is this Court:

When application is made to a Justice he may, if he thinks fit, direct that the application be made by notice of motion to a Full Court, and may adjourn the application so that notice of the application may be given accordingly.

MR BLEBY:   Yes.  That would, presumably, then come on at some time convenient to the Full Court, some suitable time down the track, as it were.

HIS HONOUR:   Yes, but it would mean that you might then face contention on the part of your opponents that the preferable course is to have the matter go to trial, have all facts found, exhaust rights of appeal, provide this Court with the benefit of the appellate decision of the Industrial Relations Court, take the normal course that the law provides, rather than jumping the queue and getting into the Court earlier on what is, in effect, a demurrer or a constitutional demurrer point.

MR BLEBY:   Yes.  I would not see this application as seeking to jump any queue and I would imagine it would take its course in the list of matters which will come ‑ ‑ ‑

HIS HONOUR:   You are jumping a queue in the sense that it brings the matter up before the trial and the finding of facts which is the normal way matters are dealt with before they come to this Court.

MR BLEBY:   Yes.  Yes, I was thinking of the actual jumping of any queue in the hearing ‑ ‑ ‑

HIS HONOUR:   I am not thinking of expedition.

MR BLEBY:   No, I am not asking for expedition.

HIS HONOUR:   This matter seems to have meandered at a snail pace whilst waiting for Dingjan to be decided.

MR BLEBY:   It has.  That is right, yes.

HIS HONOUR:   It does appear that the parties are dealing with it on the footing that it represents something in the nature of a test case.

MR BLEBY:   Yes.  I do not think I can comment on that, your Honour.  I can appreciate ‑ ‑ ‑

HIS HONOUR:   As far as I am concerned, it is either that or it is refusal of the application.

MR BLEBY:   I think I would take the former choice in that case.

HIS HONOUR:   Very well.  Would you please formally read the affidavits and put on the record the material that you have asked me to rely upon.

MR BLEBY:   Yes, your Honour.

HIS HONOUR:   I have on the file an affidavit of Stephen Palyga.

MR BLEBY:   I formally read that affidavit, your Honour.

HIS HONOUR:   The Court reads the affidavit of Stephen Michael Palyga, solicitor, which is sworn 20 March 1996.  I also have an information for the offence that has been sworn against your client.  Do you tender that before me?

MR BLEBY:   Yes, I tender that.  That was an exhibit, actually, to Mr Palyga’s affidavit, and I tender that.

HIS HONOUR:   I see.  They are the only documents save for the orders that I have?

MR BLEBY:   Yes, they are, your Honour.

HIS HONOUR:   Before the Court is an application for an order that a judge of the Industrial Relations Court of Australia (Madgwick J) and an informant prosecutor, Mr Dennis Turner, in proceedings in that court, show cause before a Full Court why a writ of prohibition should not issue out of the High Court directed to the judge, prohibiting him from proceeding further in the prosecution commenced in the Industrial Relations Court by the prosecutor. 

The facts are deposed to in an affidavit sworn by the solicitor for Homestead Award Winning Homes Pty Ltd, which is the prosecutor in this Court, the respondent below and which I shall call “the applicant”. Shortly, the facts are that the applicant is a company incorporated in the State of South Australia pursuant to the Corporations Law. It carries on business solely in that State. Its business is that of a building company. Mr Turner is a partner in a firm, D.P. & V.M. Turner. That firms carries on business as a bricklaying contractor, also in the State of South Australia.

During the period alleged in the summons which was issued by Mr Turner, his firm allegedly provided bricklaying services to the applicant. It did so in the course of, and for the purposes of, its business. On 18 November 1993, Mr Turner caused an information to be issued out of the Industrial Division of the Federal Court of Australia alleging against the applicant an offence against section 334(1)(ba) of the Industrial Relations Act 1988 (Cth).

The applicant subsequently, on 19 April 1994, filed an appearance to the information and summons.  Because proceedings were, at that time, in this Court affecting other parties, namely, A.J. and S.L. Dingjan and M.K. and M.U. Ryan, and because those proceedings were thought to have possible consequences for these, it was agreed between the solicitors for the parties in the Federal Court that the prosecution affecting Mr Turner and the applicant should be adjourned to await the outcome of the Court’s decision in Dingjan. This was agreed upon the footing that, if this Court held that section 127A of the Industrial Relations Act were wholly invalid, an argument would be presented that the information proceedings could not succeed against the applicant.

The information proceedings continued to be adjourned from time to time by consent to await the outcome of the Dingjan litigation.  On 16 March 1995, this Court pronounced its orders and delivered its reasons in Dingjan.  The case is reported: Re Dingjan; Ex parte Wagner (1995) 183 CLR 323. Subsequently, Mr Turner’s information was returned for hearing. However, it was returned before the Industrial Relations Court of Australia, that court having been established in the interval between the commencement of the prosecution and the conclusion of the Dingjan Case and having assumed the jurisdiction formerly exercised by the Federal Court of Australia - Industrial Division.

The first such return of the proceedings was in May 1995.  However, the proceedings were again adjourned for an indefinite time because of the unavailability of a judge of the Industrial Relations Court to hear the matter.  Subsequently, however, a judge became available.  The matter was then listed to be heard on 2 and 3 April 1996 before the judge who is named in the present proceedings.

On behalf of the applicant, it is admitted that it is a “constitutional corporation”, as that expression is used in section 127C of the Industrial Relations Act 1988. For the purposes of the proceedings the applicant also admits that the contract referred to in the information and summons was a contract relating to the business of the applicant and was for purposes of the business of the applicant. It is contended that pars 127C(1)(d), (e) and (f)) of the Industrial Relations Act have no application to the applicant or to the contract.

Put shortly, the applicant’s assertion is that section 127A and section 334(1)(ba) of the Industrial Relations Act, upon which Mr Turner’s information depends, are void being invalid under the Constitution. It is this point which the applicant wishes to argue before this Court. It is to argue that point that the order nisi has been presented to me today in these proceedings which have been heard ex parte.

Examination of the decision in Re Dingjan appears to indicate that that decision did not deal with the precise point which is now sought to be argued.  That point is therefore still an open one.

Three reasons for possible delay in the provision of the relief sought were canvassed with counsel appearing for the applicant. 

The first was that experience teaches that it is frequently useful to have the determination of all factual matters before a court proceeds to deal with legal questions in controversy, including constitutional questions.  This is because it is inconvenient to discover, in the midst of an argument on a legal or constitutional point, that some factual issue needs to be resolved and is in contest between the parties, or said to be in contest.  In such a circumstance, all that the court can do is to remit the matter for determination of that contested point of fact.  A great deal of cost and delay is occasioned when this occurs.

A second possible reason for delay is that within the Industrial Relations Court itself facilities exist for appellate review of decisions.  I assume that such appellate review would be available to the applicant in the event that it were convicted of the offence alleged in Mr Turner’s information.  It would be open to the applicant, both before the single judge and in any such appeal, to raise the legal and constitutional points that it seeks to raise now by its application to this Court.  This Court would then have the advantage of the reasons of the judge at first instance and of a Full Court of the Industrial Relations Court.

Although where a constitutional issue is involved it is often convenient, to avoid the delays of litigation and to resolve the issue, to bring such matters directly to the Court, it is sometimes convenient to let the trial take its course.  That upholds a principle that the constitutional validity of legislation will ordinarily be assumed until it is demonstrated that such validity is absent.  In the present case two days only were set aside for the hearing of the trial.  However, it must be kept in mind that other prosecutions may be pending based upon the provisions of the Industrial Relations Act which are impugned.  Certainly delay and expense involving the immediate parties in the resolution of their legal position would be saved if this Court were to proceed directly to hear and determine the constitutional challenge.

A third possible reason for delay arises out of the fact, as can be noticed, that the Industrial Relations Act, in the provisions which are here impugned, was the subject of much public discussion during the recent federal election.  It has been foreshadowed that the new Government of the Commonwealth intends to propose amendments to the Parliament to change provisions such as those which are here under scrutiny.  It is a matter of speculation as to whether such amendments would include the precise paragraphs that are challenged in this case, whether any such amendments would have retrospective operation (which would, as counsel rightly observed, be unusual), and whether, in any case, such amendments proposed by the Government would be enacted by the Parliament.

I cannot determine any of these points now, on the information that I have.  I do no more than notice the public debate about these issues.  However, if the legislation were amended with retrospective operation to relieve a party, such as the applicant, of liability under the information issued by Mr Turner, that would obviate the necessity of this Court’s dealing with the issue at all, or certainly as a matter of urgency.

Having considered these possible reasons for delay, it nonetheless appears to me that the issue which is raised by the applicant, as I understand it at this time, is one of some importance.  It, therefore, appears to be one which should have early consideration by this Court.  However, in the absence of Mr Turner, who might wish to contest the course which has been urged for the applicant, the correct course to be adopted is that which Order 55 rule 2 of the High Court Rules permits.  That sub-rule reads, relevantly:

2  When application is made to a Justice in Court or in Chambers.....he may, if he thinks fit, direct that the application be made by notice of motion.....to a Full Court, and may adjourn the application so that notice of the application may be given accordingly.

Having read the material that has been placed before me, having considered the arguments of counsel for the applicant and having reflected upon the possible reasons for delay in bringing the matter immediately to this Court, it seems to me that this is the course that is appropriate.  By the time the motion is returned, the Full Court will probably have the advantage of knowing more about the future of the industrial relations legislation.  It will also have the advantage of hearing from the other party most affected, Mr Turner, as to whether reasons of convenience or disputes as to relevant facts are such that the prosecution should take its course in the courts below before this Court passes upon the constitutional validity of the legislation relied upon.

The orders which I make, therefore, are that the application herein be made by notice of motion to a Full Court.  The hearing of the application is adjourned so that notice of the application may be given accordingly to all parties affected.  The application will be returned before a Full Court, upon a day to be fixed by the Registrar.  The application shall be filed and notice shall be given to the other parties affected.  Having regard to the provisions of the Industrial Relations Act, it is not necessary to make any provision for the costs of the application this morning.

Is there anything you wish to say on those reasons or orders?

MR BLEBY:   No, thank you, your Honour.

HIS HONOUR:   Thank you for your assistance this morning, Mr Bleby.  The Court will now adjourn.

AT 10.30 AM THE MATTER WAS ADJOURNED