Incentive Dynamics Pty. Ltd. v Robins

[2000] NSWSC 34

Reported Decision: [2000] 169 ALR 536
[2000] 159 FLR 112

New South Wales

Supreme Court

CITATION:	Incentive Dynamics Pty. Ltd. v. Robins & Ors. [2000] NSWSC 34
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 3728/99
HEARING DATE(S):	3 & 4 February 2000
JUDGMENT DATE:	11 February 2000
PARTIES :	Incentive Dynamics Pty. Limited (In Liquidation) - Plaintiff Douglas Robert McNeill Robins - 1st defendant John Haig Robins - 2nd defendant Jonathan Michael Miessner - 3rd defendant Coldwick Pty. Limited - 4th defendant Robins Haig McNeill Pty. Limited - 5th defendant Pagby Pty. Limited - 6th defendant Cheryl Anne Chang - 7th defendant
JUDGMENT OF:	Hodgson CJinEq at 1

COUNSEL :	S. Whelan QC/J. Chippindall - plaintiff B. Walker SC/J. Johnson - 1, 2, 4, 5, 6 & 7D. Submitting Appearance for 3D. M. Sexton SC for NSWA-G (Intervening) H. Burmester QC for Cth.A-G (Intervening)
SOLICITORS:	Marshalls & Dent, Melbourne for plaintiff English Kearns, Sydney for 1, 2, 4, 5, 6 & 7D Burton & Allen, Blakehurst for 3D I.V. Knight, Solicitor, for NSWA-G Australian Government Solicitor, Barton, ACT for CthA-G
CATCHWORDS:	Constitutional Law (Cth) - Invalid judgments of Federal courts - Rights and liabilities of parties declared by NSW legislation to be the same as if the judgments had been made by the Surpeme Court of NSW - Validity. Statutes - Interpretation - Ineffective judgment of the Federal Court set aside for want of jurisdiction by Full Court of Federal Court - Whether still an 'effective judgment' within s.4 of the Federal Courts (State Jurisdiction) Act.
LEGISLATION CITED:	Australian Constitution ss.73, 77 Federal Courts (State Jurisdiciton) Act 1999 (NSW) ss.4, 6, 7, 14.
CASES CITED:	R v. Humby (1973) 129 CLR 231 Re Wakim (1999) 73 ALJR 839 Kable v. Director of Public Prosecutions (NSW) (1996) 189 CLR 51 Mellifont v. Attorney-General(Qld) (1991) 173 CLR 289
DECISION:	See p.35 of judgment

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

CORAM: HODGSON, CJ in Eq.

Friday 11th February 2000

NO. 3728 OF 1999
INCENTIVE DYNAMICS PTY. LTD. V. ROBINS & ORS.

JUDGMENT

1 On 16th June 1999, Mansfield, J. in the Federal Court of Australia gave judgment in favour of Incentive Dynamics Pty. Limited (In Liquidation) ("Incentive Dynamics") and its liquidator in proceedings brought by them in the Federal Court against certain directors of Incentive Dynamics and other persons and companies. The Federal Court's jurisdiction to decide that case depended upon jurisdiction it was the assumed to have to exercise State judicial power in relation to matters under the Corporations Law. 2 The next day, the High Court gave judgment in Re Wakim (1999) 73 ALJR 839, establishing that the Federal Court did not have jurisdiction to exercise State judicial power in relation to matters under the Corporations Law. 3 On 6th July 1999, the New South Wales Parliament passed the Federal Courts (State Jurisdiction) Act ("State Jurisdiction Act") which purported to give effect to judgments of the Federal Court made without jurisdiction, in ways which I will explain. This Act was proclaimed to commence on 9th July 1999. 4 In these proceedings, commenced on 27th August 1999 against most of the defendants in the Federal Court proceedings, Incentive Dynamics and its liquidator Mr. Morton claim a declaration that the rights and liabilities of the parties to the Federal Court proceedings are and always have been the same as if the judgment of Mansfield, J. on 16th June 1999 had been a valid judgment of the Supreme Court of New South Wales in the Equity Division constituted by a judge of the Supreme Court, and also certain alternative and ancillary orders.

OUTLINE OF FACTS

5 I will commence with an outline of the facts, which are not in dispute. 6 On 14th May 1987, Incentive Dynamics was incorporated in New South Wales under the Companies (New South Wales) Code. 7 On 15th February 1996, proceedings were commenced in the Federal Court of Australia for the winding up of Incentive Dynamics. On 15th April 1996, Incentive Dynamics was wound up by order of the Federal Court of Australia, and Mr. Morton was appointed its liquidator. These orders have not been set aside. 8 On 21st February 1997, Incentive Dynamics and Mr. Morton commenced the Federal Court proceedings against directors of Incentive Dynamics and other companies and persons, on the basis of breaches of duties under the Corporations Law and (apparently pursuant to accrued jurisdiction) for debts at general law. 9 On 29th April 1998, the hearing of these proceedings commenced before Mansfield, J. The hearing was concluded on 13th October 1998, after 22 actual hearing days. 10 Judgment in these proceedings was delivered by Mansfield, J. on 16th June 1999. Judgment was given against Douglas Robins (the first defendant in these proceedings) for $72,244.50; against John Robins (the second defendant in these proceedings) for $292,140.68; against Jonathan Meissner (the third defendant in these proceedings) for $9,552.77; against Coldwick Pty. Limited (the fourth defendant in these proceedings) for $375,064.63; against Robins Haigh McNeill Pty. Limited (the fifth defendant in these proceedings) for $52,000.00; and against Pagby Pty. Limited (the sixth defendant in these proceedings) for $402,163.12. The claims made against John Hudson (not a defendant in these proceedings) and Cheryl Chang (the seventh defendant in these proceedings) were dismissed. 11 These orders were entered on 12th July 1999. As entered, they included a judgment that the persons against whom money judgments had been given were to pay 80% of the applicants' costs of the action, with the liability of Mr. Meissner limited to 25% of that amount, and the liability of Pagby Pty. Limited Limited to 33.3% of that amount. 12 On 13th July 1999, a Notice of Appeal against this judgment was lodged in the Federal Court by Pagby Pty. Limited. On 14th July 1999, a Notice of Appeal was lodged in the Federal Court by Douglas Robins, John Robins, Coldwick Pty. Limited, Robins Haigh McNeill Pty. Limited, and Cheryl Chang. Although no order had been made against Cheryl Chang, she appealed on the basis that an order for costs should have been made in her favour. No appeal has at any time been lodged by Mr. Meissner. 13 On 30th July 1999, a cross-appeal was lodged in the Federal Court by Incentive Dynamics and Mr. Morton. 14 As noted earlier, these proceedings were commenced on 27th August 1999. 15 On 15th November 1999, the appeals against Mansfield, J's judgment was heard by the Full Court of the Federal Court. Although initially the appeals and the cross-appeal had been brought on the merits, the only matter pursued before the Federal Court was an amended appeal on the ground of want of jurisdiction. 16 Judgment was delivered by the Full Court of the Federal Court on 26th November 1999. The appeals were allowed, the orders of Mansfield, J. were set aside, and the proceedings were dismissed for want of jurisdiction. No order was made concerning the costs at first instance, but the respondents were ordered to pay the appellants' costs of the appeal. 17 Since it appeared that the dispute in these proceedings would involve constitutional questions, notices were given to the Commonwealth, State and Territories Attorneys-General under s.78 of the Judiciary Act. When the case was argued before me, there were appearances on behalf of the plaintiffs and of all defendants apart from Mr. Meissner, and also by the Attorney-General for the State of New South Wales and the Attorney-General for the Commonwealth. It was indicated on behalf of Mr. Meissner that a submitting appearance would be filed.

ISSUES

18 The issues debated before me involved the consideration of the effect and validity of certain provisions of the State Jurisdiction Act. This Act was plainly passed as a response to the High Court decision in Re Wakim. Similar legislation has been enacted in other States. 19 As noted by the Full Court of the Federal Court in its decision of 26th November 1999, two key concepts in the State Jurisdiction Act are "State matter" and "ineffective judgment". "State matter" is defined in s.3 of the Act as follows:

"State matter" means a matter:
(a) in which the Supreme Court has jurisdiction otherwise than by reason of a law of the Commonwealth or of another State or a Territory, or
(b) which has been removed to the Supreme Court under section 8 of the Jurisdiction of Courts (Cross-vesting) Act 1987, or
(c) in respect of which a relevant State Act purports or purported to confer jurisdiction on a federal court, or
(d) arising under or in respect of an applied administrative law.

It is common ground that the Federal Court proceedings before Mansfield, J. were a State matter.

20 Section 4 of the Act provides the meaning of "ineffective judgment". It is in the following terms:

(1) A reference in this Act to an "ineffective judgment" is a reference to a judgment of a federal court in a State matter given or recorded, before the commencement of this section, in the purported exercise of jurisdiction purporting to have been conferred on the federal court by a relevant State Act.

(2) If:
(a) a Full Court of the Federal Court of Australia in its appellate jurisdiction has purported to affirm, reverse or vary an ineffective judgment, or
(b) a Full Court of the Family Court of Australia has purported to affirm, reverse or vary an ineffective judgment, a reference in this Act to the ineffective judgment is a reference to the ineffective judgment in the form in which, and to the extent to which, it purports or purported to have effect from time to time.

21 "relevant State Act" is defined in s.3 of the Act to mean any of a number of Acts, including the Corporations (New South Wales) Act 1990, and the Jurisdiction of Courts (Cross-vesting) Act 1987. It is common ground that Mansfield, J's judgment was given in the purported exercise of a jurisdiction purporting to have been conferred by one or both of those Acts. 22 The operative provisions of the State Jurisdiction Act relevant to this case are s.6 to 11 and 14. They are in the following terms:

6. The rights and liabilities of all persons are, by force of this Act, declared to be, and always to have been, the same as if:
(a) each ineffective judgment of:
(i) the Federal Court of Australia, otherwise than as a Full Court of the Federal Court of Australia, or
(ii) the Family Court of Australia, otherwise than as a Full Court of the Family Court of Australia,
had been a valid judgment of the Supreme Court in a Division constituted by a Judge of the Supreme Court, and
(b) each ineffective judgment of:
(i) a Full Court of the Federal Court of Australia, or
(ii) a Full Court of the Family Court of Australia,

had been a valid judgment of the Supreme Court in the Court of Appeal.

7(1) A right or liability conferred, imposed or affected by section 6:
(a) is exercisable or enforceable, and
(b) is to be regarded as always having been exercisable or enforceable,
as if it were a right or liability conferred, imposed or affected by a judgment of the Supreme Court.
(2) Without limiting section 6 or subsection (1) of this section, the rights and liabilities conferred, imposed or affected by section 6 include the right of a person who was a party to the proceeding or purported proceeding in which the ineffective judgment was given or recorded to appeal against that judgment.
(3) For the purposes of subsection (2), each ineffective judgment of:
(a) the Federal Court of Australia, otherwise than as a Full Court of the Federal Court of Australia, or
(b) the Family Court of Australia, otherwise than as a Full Court of the Family Court of Australia,
is deemed to be a judgment of the Supreme Court in a Division constituted by a Judge of the Supreme Court.

8(1) Any act or thing done or omitted to be done before or after the commencement of this section under or in relation to a right or liability conferred, imposed or affected by section 6:
(a) has the same effect, and gives rise to the same consequences, for the purposes of any written or other law, and
(b) is to be regarded as always having had the same effect, and given rise to the same consequences, for the purposes of any written or other law,
as if it were done, or omitted to be done, to give effect to, or under the authority of, or in reliance on, a judgment of the Supreme Court.
(2) For the purposes of an enforcement law, any act or thing done or omitted to be done before or after the commencement of this section gives rise to the same consequences, and is to be regarded as always having given rise to the same consequences, as if each ineffective judgment were a valid judgment of the Supreme Court given in or in relation to the proceeding in or in relation to which the ineffective judgment was given or recorded.

(3) In this section:
"enforcement law" means a provision of a law (other than a law relating to contempt of court) that sets out a consequence for a person if the person:
(a) contravenes, or
(b) acts in a specified way while there is in force,
a judgment, or a particular kind of judgment, given by a court.

9(1) If:
(a) before the commencement of this section, a court gave or recorded an ineffective judgment ("the new judgment") on the basis that an earlier ineffective judgment ("the earlier judgment") was or might be of no effect, and
(b) the new judgment replaced the earlier judgment,
section 6 has no effect in respect of the earlier judgment.
(2) For the purposes of subsection (1) (b), the new judgment replaced the earlier judgment if the new judgment:
(a) purportedly conferred or imposed rights or liabilities similar to or different from those purportedly conferred or imposed by the earlier judgment, or
(b) purportedly affected rights or liabilities in a way similar to or different from the way in which they were purportedly affected by the earlier judgment.

10(1) The Supreme Court may vary, revoke, set aside, revive or suspend a right or liability conferred, imposed or affected by section 6 as if it were a right or liability conferred, imposed or affected by the Supreme Court in or in relation to proceedings of the kind in or in relation to which the ineffective judgment was given or recorded.
(2) In addition to its powers under subsection (1), the Supreme Court also has power to give a judgment achieving any other result that could have been achieved if:
(a) the ineffective judgment had been a valid judgment of the Supreme Court given in or in relation to proceedings of the kind in or in relation to which the ineffective judgment was given or recorded, and
(b) the Supreme Court had been considering whether:
(i) to vary, revoke, set aside, revive or suspend that judgment, or
(ii) to extend the time for the doing of any thing, or
(iii) to grant a stay of proceedings.


11(1) In this section:
"limitation law" means:
(a) the Limitation Act 1969, or
(b) any other law that provides for the limitation of liability or the barring of a right of action in respect of a claim by reference to the time when a proceeding on, or the arbitration of, the claim is commenced.
"relevant order" means:
(a) an order of a federal court, whether made before or after the commencement of this section, dismissing, striking out or staying a proceeding relating to a State matter for want of jurisdiction, or
(b) a declaration by a federal court, whether made before or after the commencement of this section, that it has no jurisdiction to hear and determine a proceeding relating to a State matter, or
(c) any other decision or determination by a federal court, whether made before or after the commencement of this section, that it has no jurisdiction to hear and determine a proceeding relating to a State matter.
(2) A person who was a party to a proceeding in which a relevant order is made may apply to the Supreme Court for an order that the proceeding be treated as a proceeding in the Supreme Court, and the Supreme Court may make such an order.
(3) If the Supreme Court makes an order under subsection (2), the proceeding, despite the relevant order:
(a) becomes, and must be recorded by the Supreme Court as, a proceeding in the Supreme Court, and
(b) for the purposes of any limitation law and for all other purposes, is deemed to have been brought in the Supreme Court on the day on which the proceeding was first recorded as a proceeding in the federal court.
(4) The Supreme Court may make such ancillary orders in relation to an order under subsection (2) as it considers necessary for the purposes of the proceeding being treated as, becoming and being recorded as, a proceeding in the Supreme Court.

14. Nothing in this Act applies to:
(a) a judgment given or recorded by the Federal Court of Australia that has been declared to be invalid, or has been quashed or overruled, by a Full Court of the Federal Court of Australia before the commencement of this section (otherwise than on the ground that the Court had no jurisdiction), or
(b) a judgment given or recorded by the Family Court of Australia that has been declared to be invalid, or has been quashed or overruled, by a Full Court of the Family Court of Australia before the commencement of this section (otherwise than on the ground that the Court had no jurisdiction).

23 Two broad issues have been argued. 24 First, an issue of interpretation: in circumstances where the Full Court of the Federal Court has set aside Mansfield, J's orders, is there still an "ineffective judgment" to which s.6 can apply, having regard especially to the terms of s.4(2)? If not, plainly the plaintiffs are not entitled to the rights set out in s.6 and 7; although it is common ground that they could then have relief under s.11, leading to a new trial of the proceedings in the Supreme Court. 25 If Mansfield, J's judgment is still an ineffective judgment within the meaning of s.4, then it is necessary to consider the second question: is s.6 of the Act valid, at least in relation to its application to this case? Mr. Walker SC for the defendants other than Mr. Meissner argued that it is not valid on two grounds: firstly because it would taint the Supreme Court as a potential recipient of Federal jurisdiction, thereby offending principles discussed in Kable v. Director of Public Prosecutions (NSW) (1996) 189 CLR 51; and secondly because it would be repugnant to the appellate hierarchy established by Chapter III of the Australian Constitution, especially s.73.

INTERPRETATION
Submissions

26 Mr. Walker, and also Mr. Whelan QC for the plaintiffs and Mr. Burmester QC for the Commonwealth Attorney-General, have provided written submissions which I will leave with the papers. I will be brief in outlining the submissions of the parties. 27 Mr. Walker submitted that in this case, the Full Court of the Federal Court has purported to reverse Mansfield, J's judgment. In contrast to the position in s.4(1), the purported reversal referred to in s.4(2)(a) does not have to be before the commencement of the section. And whereas s.14(a) excludes from its operation an action by the Full Court on the ground that the Court had no jurisdiction, this is not excluded in s.4(2)(a). 28 Furthermore, Mr. Walker submitted, the result of the act of the Full Court in this case was that the ineffective judgment of Mansfield, J. was now in the form to which it was altered by the Full Court, namely that the proceedings be dismissed. That is, it was not the judgment of the Full Court itself which was now an ineffective judgment, but rather it was the judgment of Mansfield, J. as affected by the Full Court's judgment. 29 This was further confirmed by s.11. The presence of s.11 would be odd if his argument was incorrect. This was particularly so, having regard to par.(a) of the definition of "relevant order" in s.11(1), including as it does an order of a Federal Court dismissing a proceeding for want of jurisdiction whether this order is made before or after the commencement of the section. 30 Mr. Whelan submitted that s.4(2) was plainly intended to get rid of the possibility of two different ineffective judgments, so should be read as merely a qualification or amplification of s.4(1). Mr. Whelan submitted that the words "affirm, reverse or vary" were not apt to include setting aside altogether for want of jurisdiction: he contrasted the words "quashed or overruled" in s.14(a). He submitted that s.14(a) in fact suggested that the legislation did apply to a judgment set aside by a Full Court on the ground of want of jurisdiction. He submitted that the use of the past tense "has purported" in s.4(2) supported the view that this was something that had to happen before the commencement of the Act. He submitted that s.4(2) could not apply in this case, because there was no ineffective judgment left, following the order of the Federal Court. 31 Mr. Sexton SC, Solicitor-General for the State of New South Wales, adopted Mr. Whelan's submissions, and also referred to The King (Conway) v. Justices of Tyrone (1906) 2 Irish Reports 164 and Serrell v. Bryant (Commissioner of State Revenue) (Parker, J., Supreme Court of Western Australia, 7/4/98) on the meaning of "reverse". 32   Mr. Burmester QC, for the Attorney-General for the Commonwealth, adopted Mr. Whelan's and Mr. Sexton's submissions, and submitted further that it was plain that the words "ineffective judgment" were intended to pick up judgments on the merits, and not judgments on the basis of want of jurisdiction.

Decision

33 I would note at the outset that, although Mr. Walker somewhat faintly suggested that the arguments concerning validity favoured the construction he supported, I do not think this is so: it seems to me that the validity arguments apply in precisely the same way, whichever interpretation is adopted. I would also note that, again despite faint suggestions to the contrary, I do not think any assistance is given in this case either by the explanatory memorandum concerning the State Jurisdiction Act nor the second reading speeches. 34 I accept Mr. Walker's submission that there is no express time limit in s.4(2), whereas there are express time limits in s.4(1) and s.14. I also accept that what the Full Court did in this case could possibly fall within the words "affirm, reverse or vary", particularly the word "reverse". I also accept that there is no significance in the use of the past tense "has purported": I accept that this relates to the time of consideration of the problem, not the time of commencement of the Act. 35 However, in my opinion, s.4(2) plainly contemplates that what is left after the intervention of the Full Court will itself be an "ineffective judgment", and in my opinion that means that it must be something given or recorded before the commencement of the section; so that, despite the Full Court's order, Mansfield, J's judgment is still an ineffective judgment within s.4. 36 Mr. Walker submitted that where the Full Court has purported to affirm, reverse or vary a judgment of a single judge, the judgment of the single judge continues to have effect as so modified; and that in this case, the Full Court's valid and effective dismissal of the proceedings is the present form of Mansfield, J's ineffective judgment. However, s.4(1) says that the ineffective judgment is given or recorded "in the purported exercise of jurisdiction purporting to have been conferred on the federal court by a relevant State Act"; so in my opinion, it is quite contrary to the terms of s.4(1) to say that the Full Court's valid dismissal of proceedings, based on its undoubted jurisdiction to determine the Federal Court's own jurisdiction, is the "present form" of an "ineffective judgment". 37 My interpretation does not make it essential to imply in s.4(2) a time limit on the intervention of the Full Court. Conceivably, if a Full Court after the commencement of the section were to set aside part of a pre-commencement judgment (for example, for denial of natural justice), and leave the remainder in effect and unaltered, it could be that that remainder would still be an ineffective judgment of the first instance judge. However, that would be because the post-commencement activity of the Full Court still left operative that part of the ineffective judgment precisely as given before the commencement by the first instance judge. 38 In my opinion, this approach is confirmed by three further factors. First, while the wording "purported to affirm, reverse or vary" could possibly apply to a valid setting aside of a first instance judgment, it more readily applies to a modification of that judgment which may itself be without jurisdiction. Secondly, this is confirmed by the wording of s.14, which contemplates that a quashing or overruling of a judgment, on the ground that the Federal Court had no jurisdiction, should not take that judgment away from the operation of the Act, in circumstances where the only real operation on a judgment that the Act can have is through s.4. Thirdly, this approach has support from two decisions of the Full Court of the Federal Court itself: a rather tentative view expressed in the decision in this case, Robins v. Incentive Dynamics Pty. Limited (1999) FCA 1651, and a stronger view expressed in Turner v. Official Trustee in Bankruptcy (1999) FCA 1817.

VALIDITY

39 The question of validity requires consideration of Chapter III of the Australian Constitution, especially ss.73 and 77, which are in the following terms:

73. The High Court shall have jurisdiction, with such exceptions and subject to such regulations as the Parliament prescribes, to hear and determine appeals from all judgments, decrees, orders, and sentences-
(i) Of any Justice or Justices exercising the original jurisdiction of the High Court:
(ii) Of any other federal court, or court exercising federal jurisdiction; or of the Supreme Court of any State, or of any other court of any State from which at the establishment of the Commonwealth an appeal lies to the Queen in Council:
(iii) Of the Inter-State Commission, but as to questions of law only: and the judgment of the High Court in all such cases shall be final and conclusive.
But no exception or regulation prescribed by the Parliament shall prevent the High Court from hearing and determining any appeal from the Supreme Court of a State in any matter in which at the establishment of the Commonwealth an appeal lies from such Supreme Court to the Queen in Council.
Until the Parliament otherwise provides, the conditions of and restrictions on appeals to the Queen in Council from the Supreme Courts of the several States shall be applicable to appeals from them to the High Court.
77. With respect to any of the matters mentioned in the last two sections the Parliament may make laws-
(i) Defining the jurisdiction of any federal court other than the High Court:
(ii) Defining the extent to which the jurisdiction of any federal court shall be exclusive of that which belongs to or is invested in the courts of the States:
(iii) Investing any court of a State with federal jurisdiction.

40   The question also requires consideration of two High Court cases in particular, namely The Queen v. Humby (1973) 129 CLR 231 and Kable v. Director of Public Prosecutions (NSW) (1996) 189 CLR 51. I will briefly outline the facts and decisions in those cases. 41 Humby concerned legislation which was passed following the decisions of the High Court in Kotsis v. Kotsis (1970) 122 CLR 69 and Knight v. Knight (1971) 122 CLR 114, which held that the jurisdiction to hear and determine matrimonial causes invested in the Supreme Courts of the States by s.23(2) of the Matrimonial Causes Act 1959-1966 (Cth) could not be exercised by an officer of a Supreme Court of a State who was not a constituent member of the Court. In the former case, it had been held that a Deputy Registrar of the Supreme Court of New South Wales had no jurisdiction to hear an application for the payment of interim costs in a matrimonial cause; and in the latter, it had been held that the Master of the Supreme Court of South Australia had no jurisdiction to hear an application for maintenance pending the hearing of proceedings for dissolution of marriage. 42 The remedial legislation, namely s.5 of the Matrimonial Causes Act 1971, after providing in subsection (1) that it applied in any case in which an officer or a commissioner of a State Supreme Court had in the past purported to make a decree, judgment or order (referred to as "the purported decree") in proceedings under the Matrimonial Causes Act of 1959, provided by subsections (3) and (4) as follows:

(3) The rights, liabilities, obligations and status of all persons are, by force of this Act, declared to be, and always to have been, the same as if:
(a) in the case of a purported decree made by an officer of the Supreme Court of a State other than a purported decree to which the next succeeding paragraph applies---the purported decree had been made by the Supreme Court of that State constituted by a single Judge;
(b) in the case of a purported decree made by an officer of a Supreme Court of a State, being a decree that was varied on appeal by the Supreme Court of that State constituted by a single Judge---the purported decree as so varied had been made by the Supreme Court of that State as so constituted; and
(c) in the case of a purported decree made by a commissioner referred to in paragraph (b) of subsection (1) of this section---the purported decree had been made by the Supreme Court of South Australia constituted by a single Judge.

(4) All proceedings, matters, decrees, acts and things taken, made or done, or purporting to have been taken, made or done, under the Matrimonial Causes Act or any other law (whether of the Commonwealth or of a State or Territory) in relation to a party to the proceedings in which the purported decree was made are, by force of this Act, declared to have the same force and effect after the commencement of this Act, and to have had the same force and effect before the commencement of this Act, as they would have, or would have had, if the purported decree had been made as mentioned in the last preceding subsection.

43   It was argued in Humby that these provisions were invalid, inter alia because they involved the legislature in an exercise of interference with the judicial power, and purported to effect an alteration in the actual composition of State Supreme Courts. The High Court held unanimously that the provisions were valid, essentially on the ground that they did not purport to validate the decrees in question but rather attached to them, retrospectively, the same force and effect as would had ensued had the purported decrees been made by a judge of a Supreme Court. Thus it was an establishment by the legislature of rights, liabilities, obligations and status of persons. The cases of Kotsis and Knight were subsequently held to have been wrongly decided, but that has not thrown any doubt on the decision in Humby, which has been referred to with approval by the High Court on a number of occasions since it was decided. 44   Kable concerned s.5(1) of the Community Protection Act 1994 (NSW), which purported to empower the Supreme Court to make an order for the detention of a specified person in prison for a specified period, if it were satisfied on reasonable grounds that the person was more likely than not to commit a serious act of violence and that it was appropriate, for the protection of a particular person or the community generally, that the person be held in custody. The maximum period for detention was six months, but more than one application could be made. The Act authorised the making of a detention order against a named individual and no other. 45 It was held by Toohey, Guadron, McHugh and Gummow, JJ, Brennan, CJ and Dawson, J dissenting, that the Act was invalid. The reasons given by the majority were not identical, but the essence of the decision was that ss.73 and 77 of the Constitution required that there should be in each State a Supreme Court, which was a body appropriate to be invested with federal jurisdiction; and that the function purportedly given to the Supreme Court by that Act was incompatible with the integrity, independence and impartiality of the Supreme Court, and thus incompatible with the Supreme Court being appropriate for the investiture of federal jurisdiction.

Submissions

46 Mr. Walker submitted that a requirement by the New South Wales Parliament that the Supreme Court rubber-stamp an invalid exercise of jurisdiction by another tribunal, as if it had been a judicial determination by the Supreme Court, is wholly incompatible with the place of the Supreme Court specified by Chapter III of the Constitution. Accordingly, on the basis of the principles discussed in the case of Kable, the relevant parts of this legislation, namely ss.6 and 7 (and perhaps ss.8, 9, 10 and 12) were invalid. 47 In addition, s.73 of the Constitution established an appellate hierarchy, guaranteeing appeals, subject to exceptions and regulations determined by the Commonwealth Parliament; and this in turn pre-supposed that there had been a genuine trial at first instance. This legislation deprived the parties of a valid trial, and accordingly was contrary to the appellate hierarchy required by s.73. 48 Mr. Whelan submitted that the case did not raise any question of separation of powers, or interference in the judicial process in such a way as to undermine public confidence. As shown by Humby, there was a distinction between legislation interfering with the judicial process of determining rights, and legislation declaring or creating rights and liabilities: legislation of the latter kind was valid even if it purported to give effect to the results of past litigation or intended to affect pending litigation. Mr. Whelan referred me to BLF v. Minister for Industrial Relations (1986) 7 NSWLR 372, Polyukhovich v. The Commonwealth (1991) 172 CLR 501, Chu Kheng Lim v. Minister for Immigration (1992) 176 CLR 1; Mutual Pools & Staff Pty. Limited v. The Commonwealth (1994) 68 ALJR 216; and Nicholas v. The Queen (1998) 72 ALJR 456. 49 Mr. Whelan submitted that Kable was a very different case, in which the Court was called on to implement the executive purpose of keeping a person in jail. Mr. Whelan referred me to H.A. Bachrach Pty. Limited v. Queensland (1998) 195 CLR 547 at 561-3, where it appears clearly that the High Court considered that Kable did not affect Humby. He also referred me to Ex parte Eastman (1999) 73 ALJR 1334. 50 Mr. Sexton submitted that one interpretation of Mr. Walker's submission was that the Federal Jurisdiction Act was invalid because it purported to conscript Federal Court judges as judges of the Supreme Court. This submission was rejected in Humby at p.234. Turning to Kable, and particularly the discussion by McHugh, J. at pp.116-8, none of the examples suggested there were anything like the situation in this case and in Humby. 51   In relation to a matter that came up in discussion between myself and Mr. Walker during Mr. Walker's submissions, namely the possible ineffectiveness of the Federal Jurisdiction Act in providing rights of appeal, Mr. Sexton submitted that this would not undermine public confidence in the courts and the judicial process in a way that offends against Chapter III: there is no absolute right of appeal. He referred to Mellifont v. Attorney-General (Qld) (1991) 173 CLR 289 as indicating one type of case where it had been thought there had been no appeal to the High Court, namely the hypothetical ruling of a full Supreme Court on a point of law which arose in a criminal trial in those cases where the accused was acquitted or discharged. It had previously been decided in Saffron v. The Queen (1953) 88CLR 523 that there was no appeal in such a case: Saffron was overruled by Mellifont, but the point remained that the absence of an appeal to the High Court did not suggest that such proceedings in the Supreme Court offended against Chapter III of the Constitution. At most, an absence of appeal to the High Court meant that, in limited respects, s.6 of the Federal Jurisdiction Act could not take effect according to its terms. Under s.31 of the Interpretation Act 1987 (NSW), the Act should be construed as operating to the full extent of the legislative power of the New South Wales Parliament: see Peters v. Attorney-General for NSW (1988) 16 NSWLR 24 at 30. The vast majority of cases would not in any event involve any question of appeal. 52 Mr. Burmester adopted the submissions of Mr. Whelan and Mr. Sexton. He also submitted that under the Federal Jurisdiction Act, the Supreme Court could not correctly be described as just a "rubber stamp" for the Federal Court, and he referred me particularly to s.10 of the Federal Jurisdiction Act. 53 In reply, Mr. Walker submitted that the provisions of s.10 do not ameliorate the "rubber stamp" point; because s.10 would only permit alteration of an order in the most limited class of cases. The position remained that the legislation required the Supreme Court to treat as its own judgment, resulting from a proper judicial process in the Supreme Court, something which was nothing of the sort, but merely an order made without jurisdiction by the Federal Court after a hearing which the Federal Court had no jurisdiction to conduct. What determined the rights of the parties was the legislature at the State level: relevantly, there was no trial, no judicial process which had ascertained and determined these rights. 54 Mr. Walker further submitted that what s.7(2) of the Federal Jurisdiction Act called an "appeal" was not an appeal from a trial. If the Federal Court decision was that of a single judge, an appeal brought to the Court of Appeal would require the Court of Appeal to pretend that this was really an appeal from a first instance judge of the Supreme Court. The High Court could not hear a further appeal from the determination of the Court of Appeal on such an appeal: there had never been any trial, and "appeal" in s.73 of the Constitution pre-supposes that at some stage there has been a trial. 55 Furthermore, s.35 of the Judiciary Act left open the possibility of appeal to the High Court by special leave from a first instance judgment. Mr. Walker referred me to the statement by Barwick, CJ in Kotsis at p.77 to the effect that the entrenchment of the right of appeal from the Supreme Court to the High Court was a significant concomitant of the provision for investiture of Federal jurisdiction in the Supreme Courts. The absence of any possibility of an appeal to the High Court was a very significant difference from the rights which the New South Wales Parliament could deliver under s.6, and the rights which they purported to deliver: to rely on s.31 of the Interpretation Act to give effect to what could be delivered would do violence to the intent of the New South Wales Parliament and this should not be done. On its face, the Federal Jurisdiction Act misled the populace as to what the law is. It was passed in circumstances where the Interpretation Act existed; but this was not enough to indicate that the intention of Parliament was to give effect to whatever could validly be given effect to, no matter how different this was from the manifest intention.

Decision

56 In my opinion, it is helpful to outline first how it seems to me that the Federal Jurisdiction Act would operate, if it actually achieved what it purported to achieve. I will then note certain respects in which it seems to me that this Act plainly cannot and does not achieve what it purports to achieve, and I will consider whether this involves any invalidity relevant to the present case. Finally, I will go on to consider the broader Constitutional arguments put by Mr. Walker. 57 The Federal Jurisdiction Act purports to give the parties the same rights and liabilities as they would have had if the Federal Court (or Family Court) judgment was a judgment of the Supreme Court of New South Wales. This raises questions as to what would be the rights and liabilities of the parties under the ineffective judgment apart from the Act, what would be the rights and liabilities of the parties if the judgment was a judgment of the Supreme Court, and how these two fit together. I will discuss a number of different classes of case. I cannot hope to be exhaustive, but I hope this discussion gives a fair conspectus of the kinds of cases that may arise. 58 Firstly, there are cases of money judgments, or orders that a person do something once and for all, where the money in question has been paid, or the thing in question has been done, and the time for any appeal has passed before the commencement of the Federal Jurisdiction Act. In those cases, apart from the effect of the Act, the judgment in question is effective and binding, and the only outstanding rights and obligations would appear to be those associated with the possibility of an application for prohibition for want of jurisdiction, or a right to apply for extension of time for an appeal on the basis of want of jurisdiction. It seems unlikely in the extreme that any such application would be successful, except in most unusual circumstances. If the judgment in question were a judgment of the Supreme Court, the only outstanding rights and obligations would be those associated with the possibility of an application for extension of time to appeal on the merits; and again, there would generally be little chance that such an application would be granted. In this class of case, it appears that there will be little, if any, occasion for the operation of the State Jurisdiction Act. 59 A second class of case is those in which an order has been made winding up a corporation, where the winding up has not been completed, but the time for appeal from the winding up order has passed. In Amann Aviation Pty. Limited v. Continental Venture Capital Limited (1999) NSWSC 1212, I held that in this situation, quite apart from any effect of the State Jurisdiction Act, the winding up order and appointment of liquidator are effective and binding, and that the Supreme Court of the State in which the company in question was incorporated can take over supervision of the winding up. I adhere to that view. There could be an application for prohibition or leave to appeal out of time. One would expect that a strong case would be required for any necessary extension of time. Had the order in question been an order of the Supreme Court, there could be an application for leave to appeal on the merits out of time; but again one would expect that a strong case would be required. It seems unlikely that the Act will have significant application in cases of this kind. 60 Next, there are cases where there has been a judgment for money which has not been satisfied, or an order that something be done which has not been done, or an order that something not be done either permanently or for a period that had not passed before the commencement of the Act; these being judgments in respect of which the time for appeal had passed before the commencement of the Act. Leaving aside the effect of the Act, it seems clear that, if enforcement of the judgment required any further exercise of jurisdiction by the Federal Court (for example, if it turned out that an act ordered to be done could not be done exactly as ordered, and a party sought an alternative order to achieve substantially the same result), it seems clear that the Federal Court could not enforce such an order in those circumstances. On the other hand, if all that was required was enforcement pure and simple of an existing order, I am inclined to think that, since the order is effective and binding until set aside, the Federal Court could enforce it. I would mention that Mr. Walker argued to the contrary, referring to some passages in Wakim; but those passages were referring to further action being taken by the Federal Court, not merely in enforcing an existing judgment, but involving further exercises of jurisdiction under the Corporations Law. 61 Plainly, if the judgment in question was a judgment of the Supreme Court of New South Wales, it could be enforced by the Supreme Court, and the Supreme Court could also make any adjustments to the judgment necessary for enforcement. If attempts were made to enforce the judgment in both courts, it might be expected that the Federal Court would stay its order, because it was made without jurisdiction and because the Supreme Court would have full jurisdiction, including jurisdiction to make adjustments. In relation to the Federal Court judgment, there could be an application for prohibition or to appeal out of time on the ground of want of jurisdiction; and in the case of a Supreme Court judgment there could be an application to appeal on the merits out of time. In either case, it would probably be difficult to obtain an extension of time; but since there were still matters remaining to be dealt with under the judgment, it might be thought that an extension of time would be granted a little more readily than in the first two classes of case. 62 There would also be a fourth class of case, namely those where an appeal had already been brought before the commencement of the Federal Jurisdiction Act, or where the time for appeal had not expired before the commencement of that Act. The situation in relation to the continuing effect of the Federal Court judgment would be the same as discussed under the previous headings. However, the availability or otherwise of an appeal would be much more significant than in those classes of case. Apart from the effect of the Act, there would be no appeal on the merits from the Federal Court judgment, only the availability of prohibition or an appeal for want of jurisdiction. If it were a Supreme Court judgment, there would be an appeal on the merits, to the Court of Appeal if the judgment was of a single judge, and by special leave to the High Court if the judgment was one of the Court of Appeal. Plainly, if the judgments were Supreme Court judgments, these rights of appeal would be important. Also, I note that it is probably in this fourth class of case where the State Jurisdiction Act would have the clearest and greatest impact. 63 In my opinion, it is plain that there would in fact be no possibility of appeal, by special leave, to the High Court to alter the rights and liabilities purportedly established by a judgment of the Full Court of the Federal Court (or Family Court), as if these rights and liabilities had been established by a judgment of the Court of Appeal of New South Wales. Section 73 of the Constitution gives the High Court jurisdiction to hear appeals from decisions of the Supreme Court of New South Wales; but there would not in fact be any decision of the Supreme Court of New South Wales. Thus, although the Federal Jurisdiction Act says that the parties are to have the same rights and liabilities as if the decision in question was a decision of the Court of Appeal, it is plain in my opinion that they would not have the rights and liabilities associated with the possibility of appeal to the High Court. Certainly, this is not provided by the Constitution. If it were suggested that the Commonwealth Parliament could provide for an appeal, my view would be that this could not be done; but in any event, the Commonwealth Parliament has not purported to do so. Certainly, in my opinion, the New South Wales Parliament could not provide for such an appeal, when it is not provided for by the Constitution. Accordingly, in relation to Full Court judgments, in the fourth class of case which I have discussed, where the Federal Jurisdiction Act is perhaps of most significance, the Federal Jurisdiction Act fails, in a very significant way, to give the parties the same rights and liabilities as they would have had if the judgment had been a judgment of the Court of Appeal, although it purports to do so. 64 Turning to the position where, as in this case, is the judgment of that of a single judge, there would in my opinion be an appeal to the Court of Appeal of New South Wales. The New South Wales Parliament has jurisdiction to provide for appeals to the Court of Appeal and for the determination of questions by the Court of Appeal. In this case, a provision that the rights and liabilities of parties, in proceedings giving rise to a judgment of a single Federal Court judge, are to be the same as if that judgment had been the judgment of a single judge of the Supreme Court of New South Wales, carries with it the requirement that the rights and liabilities are to include those associated with the possibility of appeal from the judgment of a single judge of the Supreme Court of New South Wales to the Court of Appeal. Whether on ultimate analysis the application to the Court of Appeal in such a case would be an application for a first instance decision by the Court of Appeal on hypothetical facts, or a true appeal or a quasi-appeal also based on hypothetical facts, does not seem to me to matter. The questions which would arise for determination by the Court of Appeal would be the same in both cases, and essentially the same as if it had been a true appeal from a decision of a single judge of the Supreme Court. The Act plainly implies that, when considering the Federal Court judgment as if it were a judgment of a single judge of the Supreme Court, the Court of Appeal should assume that the hypothetical Supreme Court judgement was given upon the basis of the evidence, submissions, and conduct of the hearing as it took place before the Federal Court. 65 In my opinion also, there would be an appeal by special leave to the High Court from the decision of the Court of Appeal in such a case. The decision would in my opinion plainly be a decision of the Supreme Court within s.73 of the Constitution, and there would be nothing in the nature of that decision which in my opinion would prevent it being the appropriate subject of such an appeal. In particular, the hypothetical element in what the Court of Appeal would have to decide would not in my opinion preclude an appeal to the High Court: this is shown by Mellifont. 66 However, there would be no possibility of appeal by special leave to the High Court from what is in effect deemed to be a judgment of a single judge of the Supreme Court, for the same reason as discussed in relation to the appeal to the High Court from what is in effect deemed to be a judgment of the Court of Appeal. However, although there is the possibility of such an appeal from an actual judgment of a single judge of the Supreme Court, as a practical matter this is of little consequence: the normal route of appeal is to the Court of Appeal, and as I have indicated, that route would be available from the "deemed" judgment; and the likelihood of special leave being granted for a direct appeal is extremely remote. 67 As pointed out by Mr. Walker, the remoteness of the chance of a direct appeal does not mean that the New South Wales Parliament could abolish such an appeal, but that is not the question here: the question here is the extent to which the New South Wales Parliament can make the rights and obligations of the parties to Federal Court proceedings "the same" as they would have been if there had been a judgment of the Supreme Court. 68 The upshot of this discussion is that, in my opinion, the difference between what s.6(b) purports to do and what it can validly do is significant in some of the cases in respect of which s.6 is likely to be important. The significance of the difference is such that there could be a question whether s.6(b) should have effect to the extent to which it is within power, or fail completely because what is achieved is so different from what was intended to be achieved. However, even if s.6(b) were to be held invalid, in my opinion s.6(a) would not be rendered invalid by the considerations I have discussed. Any difference between the rights and liabilities purportedly given and those actually given is not in my opinion sufficiently material to raise a question about invalidity of s.6(a), particularly having regard to s.31 of the Interpretation Act. 69 Turning now to the broader Constitutional arguments advanced by Mr. Walker, in my opinion the argument based on the Kable principle should be rejected, substantially for the reasons advanced by Senior Counsel for the plaintiffs and for the Attorneys-General. It is true that the State Jurisdiction Act purports to establish rights and liabilities as if there had been a valid and effective trial on the merits, whereas in truth there has been no such thing; and it requires the Supreme Court, without question, to give effect to those rights and liabilities. In certain circumstances, that could conceivably be a function inconsistent with the Supreme Court's role as a possible repository of Federal jurisdiction under Chapter III of the Constitution. However, the fact is that the Act applies only where there has been a trial on the merits, by a tribunal of the highest integrity, competence, and reputation, in which, subject to any points that could be raised in an ordinary appeal on the merits, both parties have had a fair opportunity to put their cases. It is now established that that tribunal had no jurisdiction, but that in no way affects the fairness and competence and judicial nature of the determination that was made. In my opinion, for the Supreme Court to be directed to give effect, without question, to rights and liabilities as determined by such a process is not inconsistent with the Supreme Court's exercise of Federal jurisdiction, particularly where rights of appeal are in substance preserved. In my opinion, this is confirmed by the decision in Humby, which has not been questioned and is still binding on me. 70 As regards Mr. Walker's more general point in relation to the appellate hierarchy established by s.73 of the Constitution, I do not accept that s.73 requires that there must in all cases in which an appeal could go to the High Court have been a trial at first instance conducted by a tribunal with jurisdiction. Again, in my opinion, Humby shows that there is no fundamental Constitutional objection, in terms of the appellate structure provided in the Constitution, to legislation such as this.

CONCLUSION

71   For those reasons, in my opinion the plaintiffs are entitled to relief substantially in accordance with that sought in paragraph 1 of the Summons and appropriate consequential orders. I will direct the plaintiffs to bring in Short Minutes to give effect to these reasons.

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REMARKS ON DELIVERING JUDGMENT

72   HIS HONOUR: I have said that the plaintiffs are entitled to relief substantially in accordance with that sought in par.1 of the Summons. I think it follows from my reasons that a declaration along the lines of par.1 should be qualified, perhaps by reference to relevant paragraphs in my judgment. In particular, I have found that the rights and liabilities of the parties are not exactly the same as if the Federal Court judgment had been a judgment of the Supreme Court, in that they do not include those associated with the possibility of a direct appeal by special leave to the High Court. The parties should consider the best way of dealing with this in the Short Minutes of Order. 73   It was not argued before me in this case, or in Amann Aviation (1999) NSWSC 1212, that s.6 of the Federal Jurisdiction Act would take away any rights and liabilities associated with the continued existence of any Federal Court judgment as a judgment of a superior court of record which has not been set aside. I think it is plain that the New South Wales legislature could not do that, because it would detract from the effect of Commonwealth legislation constituting the Federal Court as a superior court of record. 74 Having regard to what seems to me to be a clear lack of competence, I would construe s.6 as providing that the parties would have the rights and liabilities set out in that section, without detracting from any rights and liabilities associated with the continued existence of any relevant Federal Court judgment. Even if that construction were not correct, in my opinion s.31 of the Interpretation Act would leave s.6 operating to the extent of New South Wales legislative power in that respect. 75 In conclusion, I will offer for consideration by the relevant authorities a possible way of dealing with the problems I have identified in the judgment, assuming my analysis is correct. 76 The intention of the legislature could be made clearer by qualifying s.6 with words such as "except for those associated with the possibility of appeal to the High Court of Australia". Then special provision could be made for Full Court judgments along the following lines: if any party to proceedings, in which an ineffective judgment of the Full Court has been given, wishes to appeal against the effect of that judgment, then such party should apply to the New South Wales Court of Appeal, and in the event of such application being made, the rights and liabilities of the parties are to be the same as if the judgment from which appeal had been brought to the Full Court had been the judgment of a single judge of the Supreme Court, and the appeal had been brought to and heard by the New South Wales Court of Appeal, but not yet decided by the Court of Appeal. The Court of Appeal could then itself decide the issues raised before the Full Court, and there would be an appeal from that decision by special leave to the High Court. 77 This matter was not the subject of submissions, and there may be objections to that proposal which I have overlooked. However, I simply offer it as a possibility. 78 I stand this matter over to 23rd February 2000 at 9.30am for Short Minutes.

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Last Modified: 09/25/2000