Judges of Federal Court & Anor v McNally & Anor, ex parte Darvall
[1998] HCATrans 302
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S74 of 1998
In the matter of -
An application for a Writ of Prohibition against THE JUDGES OF THE FEDERAL COURT OF AUSTRALIA and GEORGE WAKIM
Respondents
Ex parte -
PETER J. McNALLY and TERENCE McNALLY
Prosecutors
Office of the Registry
Sydney No S107 of 1998
In the matter of -
An application for a Writ of Prohibition against THE JUDGES OF THE FEDERAL COURT OF AUSTRALIA and GEORGE WAKIM
Respondents
Ex parte -
CHOLMONDELEY DARVALL QC
Prosecutor
GAUDRON J
(In Chambers)
TRANSCRIPT OF PROCEEDINGS
AT SYDNEY ON TUESDAY, 25 AUGUST 1998, AT 9.30 AM
Copyright in the High Court of Australia
__________________________
MR N. PERRAM: May it please the Court, I appear for the prosecutors in each matter. (instructed by Mallesons Stephen Jaques) and (instructed by Moray & Agnew)
MR P.J. COOK: If it please the Court, I appear on behalf of Mr Wakim in both matters. (instructed by Vaughan Barnes)
HER HONOUR: I hold a certificate from the Deputy Registrar to the effect that he has been informed by the first respondents in these matters that they do not wish to be represented at the hearing of these applications and will submit to any order of the Court save as to costs. Yes, Mr Perram.
MR PERRAM: The application is for the issue of an order nisi for the reasons which are set out in the written submissions.
HER HONOUR: Yes. Well, I am bound by that decision, so we can start with that.
MR PERRAM: It is the position as a result of what this Court said in DCT - - -
HER HONOUR: Yes, but I am bound by the decision.
MR PERRAM: In the Deputy Commissioner of Taxation Case or by Gould v Brown?
HER HONOUR: Yes, in Gould v Brown. If I were to issue an order nisi today that would be to disregard the decision.
MR PERRAM: With respect, the effect of the St Helen's Farm Case is the case is without precedential effect in this Court.
HER HONOUR: It may have no precedential value but the order stands.
MR PERRAM: It would be binding if this was an application in the Gould v Brown proceeding itself because the effect of section 24 would be a res judicata but as between other parties, with respect, that is not so.
HER HONOUR: Was there not a declaration made in that case?
MR PERRAM: In Gould v Brown?
HER HONOUR: Yes.
MR PERRAM: There was a declaration, yes, but that does not affect the parties' rights - - -
HER HONOUR: What was the declaration?
MR PERRAM: Sorry, there were no declarations. There were questions answered and the questions were answered in the negative but, although the order in that case was an order in rem, it only affects the parties who may well have been parties in that ‑ ‑ ‑
HER HONOUR: Well, you say that. That is an interesting view of the decisions of this Court. The decision stands. It has effect, and the effect of the decision was to uphold the validity of the cross-vesting legislation.
MR PERRAM: And, at the moment, there is no doubt that every other court in the country is bound by Gould v Brown and, indeed, that has been done on a number of occasions.
HER HONOUR: And as am I.
MR PERRAM: With respect, the effect of the St Helen's Farm Case is that your Honour is not but, in any event, the granting of an order nisi does not result in the proposition that Gould v Brown is wrongly decided. It simply resolves an issue of an order calling for somebody to come before the Court to justify the making of the orders. If it were the case that the issuing of an order nisi under Order 55, in effect, ruled that the law was invalid, it would be quite proper to refuse the application but that is not the basis upon which the order nisi is granted, with respect. It is sufficient to justify the grant of the order nisi but the question which seeks to be articulated is one which is arguable.
HER HONOUR: I do not know that that is right.
MR PERRAM: That is what was said - - -
HER HONOUR: In relation to prohibition?
MR PERRAM: Those two applications which are referred to in the written submissions are in relation to certiorari, that is so, but, in my submission, there is no reason in principle to distinguish the attitude which ought to be taken.
HER HONOUR: You say that but here you are faced with a decision of this Court to the effect that the legislation in question is valid. It follows from that that the Court has jurisdiction.
MR PERRAM: And that is why the order could be made absolute, absolutely. But that is not what the applicants seek to do in these two matters. They do not seek to have your Honour say that the law is invalid. That function is clearly vested solely in the Full Court of this Court.
HER HONOUR: They seek to have me at least do this: they seek to have me form a view that the matters are so sufficiently arguable that it should be referred to a Full Court. Thereby, in effect, bypassing what is standard procedure in these matters, namely that in the case of a recent decision you obtain the leave of the Court to challenge it. It also does something which is possible but which is not done lightly in this Court: it seeks prohibition directed to a superior court.
MR PERRAM: The answer to the first question lies in what this Court said in Commissioner of Taxation v St Helen's Farm. This is not a case, as has been the case in the past, where you have a 4:3 split one way and the Bench has been reconfigured. That is not the case. It is the case where there was a split 3:3, and the passages that I refer to at page 2 of my written submissions are quite clear authority for the proposition but, as a result, that case, Gould v Brown, is without any precedential effect.
HER HONOUR: It may be without any precedential effect. It does not mean the decision is wrong.
MR PERRAM: No, and it is not necessary to establish for the purpose of this application that the decision is wrong. It is only necessary to establish that the argument put by the prosecutors has strong or possible prospects of success. Now, if it had precedential effect, then the application would be hopeless but, with respect, the Commissioner of Taxation Case is direct authority for the proposition that that is the one effect that it does not have.
Now, this application, were it a stay application before the Full Court Federal Court or before a single justice of the Federal Court, would be doomed, in my submission.
HER HONOUR: Yes, but there are other steps you could have taken. You could have sought removal so that at least you would have to argue the question whether the Court should entertain the application and - - -
MR PERRAM: But the same question would arise on a removal application.
HER HONOUR: Yes, but it would not be by a single Judge and it would also leave open the question on the further return whether or not the matter was to be argued, whether or not leave was to be granted to reconsider the matter.
MR PERRAM: But, with respect, it is not a question of granting leave to reconsider the matter. It would only be a question - - -
HER HONOUR: I am not too sure about that.
MR PERRAM: If it were a case where it had been decided 4:3 or 5:2 and it was, as in St Helen's Farm itself, sought to - - -
HER HONOUR: Well, I have said what I have said. The Judiciary Act is not there just to amuse counsel. It says what the decision is. The decision stands.
MR PERRAM: The passages which I refer to in St Helen's Farm say that it has no precedential effect and it does not bind any Justice of this Court. It binds the Full Federal Court and that is why an application to the Full Federal Court could not proceed and that is why an application could not be made in that case. The position of a Full Bench of this Court on a removal application or the position of a single Justice of this Court for an application for an order nisi are identical because of that case. There is no procedural shortcut which the applicants are seeking to take here.
HER HONOUR: Well, it looks to me like there is one. It also looks to me like the oddest set of documents I have seen in this Court in a long time.
MR PERRAM: They have been drafted pursuant to Order 55. I am sorry if they are defective in any way.
HER HONOUR: I have never before seen the application attached as an exhibit note to an affidavit.
MR PERRAM: The practice note of Order 55 - and it can certainly be tendered on the application - says that it is to be attached to the affidavit.
HER HONOUR: As an exhibit note?
MR PERRAM: In the Butterworths Service at page 18,104, it says:
The affidavit should be carefully structured.....Exhibited to the affidavit should be:
(a) the reasons for judgment.....
(b) such other documents -
and -
(c) a draft order nisi.
HER HONOUR: I have never seen it before in this form.
MR PERRAM: I apologise if I have caused any embarrassment. We were simply following the format which is referred to in the Butterworths Service.
HER HONOUR: Well, theoretically, I have no application before me. All I have is an exhibit to an affidavit which application is for a referral to a Full Court and not for an order nisi, that I have, in the matter of McNally.
MR PERRAM: Order 55 rule 1 says that:
An application for -
(a) a writ -
such as the current one -
may.....be made to the Court or a Justice ex parte and shall be supported by affidavit.
And then the notes in the Butterworths Service at paragraph 16,625.10 say:
Subrule (1) assumes proceedings on all writs progress on the basis of affidavit evidence -
There is no originating process on one of these application. The originating process is the affidavit and if the orders are made then that is why it is a draft order nisi. The draft order nisi is not an originating process, it is a proposed originating process.
HER HONOUR: All right. Well, the one I have seeks as a first order, “The referral of this matter to a Full Court”.
MR PERRAM: Which simply seeks to make the order nisi returnable before the Full Court. The order nisi can be returnable before a single Justice which, for the reasons of the underlying importance of the matter, will be quite inappropriate in this matter or, alternatively, to make it returnable before the Full Court.
The other procedure which could be used is to make the application direct under rule 10 that it be done by notice of motion, to make the notice of motion returnable before the Full Court. That happened yesterday in the Abebe matter. The originating process in the proceeding is the affidavit. There is no other originating process.
HER HONOUR: I must say, hitherto, I have always seen a draft order nisi unattached.
MR PERRAM: I can hand up one unattached if that assists.
HER HONOUR: It does not matter.
MR PERRAM: Those are the submissions. The short point is that St Helen's Farm means that the question is open.
HER HONOUR: Now, what do you say about the issue of prohibition to Federal Court judges which, as I have said, can be done but is by no means usually the case?
MR PERRAM: The first thing which has to be said it is not lightly done because it is a superior court of record. The second thing is, as your Honour says, it can be done. The third thing is there is simply no other way to proceed in this matter.
HER HONOUR: There is.
MR PERRAM: The removal application is one way of proceeding and that would have the advantage of bringing - - -
HER HONOUR: Yes. So, you have an alternative procedure which you have elected not to pursue.
MR PERRAM: Yes, but the procedure is not, in my submission, necessarily preferable one way or the other.
HER HONOUR: To some extent you seek the exercise of a discretion. Ordinarily prerogative writs will not issue if there is an alternative procedure available.
MR PERRAM: What the cases say is that if there is an appellate mechanism below which has not been ventilated, then that is a relevant factor to be taken into account in the exercise of a discretion. So, for example, if Gould v Brown had not been handed down at all and the question had not been decided, an application to this Court would be pointless because it would be necessary, first, for the point to be argued before the Federal Court, it having jurisdiction to determine whether it has jurisdiction, and then for whatever appeal rights to be sorted out in that case, and that is what happened in Gould v Brown. There are no appeal rights ‑ ‑ ‑
HER HONOUR: No, but there is an alternative procedure. The principle is not limited to appellate rights if there is an alternative procedure.
MR PERRAM: As I understand it, the rational underlying the doctrine, the principle outlined, is to prevent this Court being troubled by unnecessary applications when there are other courts who are perfectly able to sort it out. A reason which could be advanced on a section 40 removal application against it would be that there existed the alternative procedure of an application for an order nisi. It cannot be the case to concede it both ways. One can see force in the point, when it relates to invoking appellate mechanisms which do not interfere with this Court but that is not so. Indeed, the alternate mechanism of appeal, the section 40 removal application, if it be an appeal at all and if removal be valid, in any event involves more Justices of the Court than this application does and, therefore, if the rationale underlying the doctrine is one of convenience, this is a more convenient procedure.
HER HONOUR: In one respect it may be more convenient because it will at least give an indication whether the Court is prepared to reconsider, that being a matter which is not normally decided by a single Judge and what you virtually seek to effect by this application.
MR PERRAM: With respect, reconsideration has nothing to do with this case because it is not a reconsideration situation. It would be reconsideration if Gould v Brown had any effect in this Court but it has no effect. It is without effect.
HER HONOUR: It is not without effect. It may be without precedent value but it is not without effect.
MR PERRAM: It has decided Gould v Brown. There can be no doubt about that.
HER HONOUR: Yes.
MR PERRAM: And as between those parties - - -
HER HONOUR: And it answered certain questions.
MR PERRAM: The questions which were asked in that matter which related - well, no, because that only bound the parties in those proceedings. If it has any effect beyond binding the parties in those proceedings - and leaving to one side the in rem effect of the orders, and the other parties to the in rem order - then that is to give it a precedential effect which St Helen's Farm says it does not have. There is no middle ground between binding the parties and having some effect outside. If it has effect outside binding the parties, that is to give it precedential value which, with respect, is exactly what St Helen's Farm says it does not have. For that reason, it is not a reconsideration situation. With respect, the passages in the case which I have referred make that quite clear.
HER HONOUR: Read me exactly the passage you rely on.
MR PERRAM: I have not brought the case with me. It was not one of the authorities which I was expecting to have to take your Honour to. It is important and I would like the opportunity to read it to your Honour. Perhaps if I could have a five minute adjournment. I know it is a most unusual application but the passages are very clear.
HER HONOUR: It is a most unusual application all round and I would like you to see somewhere where it says a single Judge sitting in chambers can ignore decisions of this Court. I would like you to point to the practice where a single Judge has been invited to proceed on the basis which ignores ‑ ‑ ‑
MR PERRAM: Justice Kirby did that in the Merribee Case.
HER HONOUR: I see, yes.
MR PERRAM: That is one case and that is one example where it happened. But I would make that application because it was perhaps remiss of me to leave it off the list of authorities but I just rather assumed that it was not an issue in dispute and I did not want to clog the list up with unnecessary authorities. But I make that application, recognising how extraordinary it is and recognising the blame lies entirely in my camp. Could I make the application for a five minute adjournment for the purpose of getting 146 CLR so that the clarity of the passages can be demonstrated to your Honour?
HER HONOUR: Very well, five minutes and no more.
AT 9.46 AM SHORT ADJOURNMENT
UPON RESUMING AT 9.54 AM:
MR PERRAM: I thank your Honour for that indulgence. Could I hand up volume 146 - - -
HER HONOUR: I do not think you need hand it up. That is a case where the matter was already before the Court. You see, what I have been trying to impress upon you is that your application seeks, so far as it seeks the grant of an immediate order nisi, to force the Court to consider a question; whereas, ordinarily, you would have to take other steps. Ordinarily, you have to ask the Court for leave to reargue a matter.
MR PERRAM: The views of Justices have always been divided on that, as I understand it, but assuming that is so, that is only so - - -
HER HONOUR: Ordinarily, also, if you are proceeding on appeal, you have to get leave or special leave - - -
MR PERRAM: There can be no appeal in this matter because it has not happened yet.
HER HONOUR: Exactly, and ordinarily, if you were proceeding on a removal, except on an Attorney-General's application, you have to get leave. Now, the procedure you have adopted really seeks to force the hand of the Court and it seeks to force the hand of the Court in circumstances where you are asking a single Judge, not the court on appeal, as was the case in St Helen's Farm or - I am not too sure what it was in Tasmania v Victoria, whether it was on appeal or not, but the application came before the whole Court. Certainly, when you have the matter before the whole Court, it has no precedent value. What I am putting to you is that it is by no means obvious that that same situation obtains where it is before a single Judge and the procedure you have chosen, if acquiesced in, takes it outside the control of the Court to determine whether or not it wants to embark afresh on the issue.
MR PERRAM: There are three ways in the current proceedings how the question could come before the Court. The first, hypothetically, is an appeal. That cannot be the case here because, no orders having been made that would not be allowed to take place. The second is by way of a section 40 removal application to which similar questions of principle would apply in the exercise of discretion as that which obtains on a special leave application. The third, on the papers, is the possibility of an application for prerogative relief. One asks this question: a party confronted with a proceedings, by which it is asserted there is to be litigation which they say is beyond jurisdiction, has three options. They can forget the point altogether; they can take the point in the proceeding at the end of a three-week trial and, if they are successful, the expense of a three‑week trial is wasted or, alternatively, they can seek, by some mechanism, to prevent the proceeding from taking place.
Now, that left the applicants/prosecutors or proposed prosecutors in these two matters with only one or two options. One was the removal application which would bring it before, not a Full Bench who would decide in the St Helen's Farm sense of the word the Gould v Brown point, but another Full Bench who would exercise a discretion as to whether to bring the matter up or, alternatively, to bring the matter before a single Justice. Now, if the view be taken that it not be appropriate for a single Justice to decide whether the Court ought to consider the matter, then the appropriate thing to do would be to direct that this application be made by notice of motion before a Full Court.
HER HONOUR: Yes, that is what I was hoping you would come to.
MR PERRAM: I am slow but I think I have got there eventually, and if that be so then the removal application procedure and the order nisi procedure before your Honour would not disable the Court in any sense because it would still be up to the three Justices or two Justices as to whether the Gould v Brown adventure should be reopened. In that sense, if there were thought to be any lack of isomorphism between this application and that which would obtain under a section 40 removal, well then, that path which in my written submissions I have exhorted your Honour not to take would solve the problem.
If your Honour were of the view that a single Justice either could not take the course which I urge or, alternatively, ought not to take the course, then, if driven, I would make the submission that, in fact, it should be made by notice of motion to a Full Court, contrary to that which is in my written submissions. Although the authorities to which I have referred refer to a number of discretionary matters when applications are made by notice of motion, this may be yet another discretionary situation where, in situations where you have an evenly divided Court, the application should be directed made by notice of motion before a Full Court.
That does leave a small procedural problem if that course were to be adopted which is what is the status of the proceedings before Mr Justice Einfeld which are to commence in a couple of weeks. That application could be made to the Full Court as well, one imagines.
HER HONOUR: Well, it is a very rare day when a stay application is given even on the grant of an order nisi. Ordinarily the matter is left in the hands of the court or the tribunal to whom the writ is - - -
MR PERRAM: The difficulty with that course is that the Full Federal Court recently indicated that it regarded itself - it may have indicated. It is hard to say what it indicated. It declined to grant a stay in a cross‑vesting matter on the basis of Gould v Brown bound it not to do so. So, I mean, in one sense the stay application is procedurally - that attitude may not be right, of course, but at least at the moment the position in that court is ‑ ‑ ‑
HER HONOUR: But had you taken any other step? Had any other step been taken in the court?
MR PERRAM: In that proceeding?
HER HONOUR: Yes.
MR PERRAM: Or in this proceeding?
HER HONOUR: In that proceeding.
MR PERRAM: The winding up order had, in fact, been made and it was not so much a stay of proceedings, it was a stay of an order, so it was not an Order 55 rule 10 kind of application but the Full Court overturned the stay on the basis that the discretionary considerations were against it.
If I could just say this: if the Court were minded to refer the matter into the Full Court, it would be my submission the case I referred to and a copy which was provided to your Honour which is the Full Court decision, does make the application for a stay in the Federal Court very difficult and if it were possible to have that notice of motion returnable prior to the commencement of the trial so at least the stay application could be pursued, that, at least would not prejudice the rights of the parties.
As I apprehended, the position of the respondent is it does not oppose the stay, for reasons which my learned friend can outline but - - -
HER HONOUR: If you do not oppose the stay, that can be made clear. You have some little time in the Federal Court, have you not, before it is listed? You see, one of the considerations, these days at least, is loss of court time. I am not familiar with the matter but, in any event, it may be capable of decision on some basis other than the point you take.
MR PERRAM: Absolutely. It is a complex law. It is a complex professional negligence suit.
HER HONOUR: The Federal Court may have some case management system in place to deal with the problem.
MR PERRAM: The proceeding is well advanced. On the face of the pleadings, I think my friend would agree with me, it is a complicated professional negligence suit against a number of professionals and against the Official Trustee. The material for the case is, effectively, on. It is ready to go. It is in for directions, I think, this Friday before his Honour Mr Justice Einfeld. It was meant to be on last Friday but those directions were moved for a week pending the outcome of this application.
No doubt an application for a stay can be made to him but I think it would be said his Honour would probably consider himself bound by what the Full Federal Court has now said in the Merribee Case not to grant such a stay because of what this Court has said in Gould v Brown.
HER HONOUR: It may not feel itself in exactly the same position once proceedings are on foot in this Court.
MR PERRAM: One of the criticisms in the Merribee Case which the Full Court made was that it appeared to look like an application for certiorari but there was a grave deficiency in the proceeding in that the court, against whom the quashing order was to be directed, did not seem to be joined as a party and that may well have been one of the factors which bore upon the mind.
However, in a practical sense, if the position of the respondent, although it may not be formally announced, is that it does not oppose the stay for its own reasons, then it may be possible that that application could be made before Mr Justice Einfeld this Friday. Perhaps if that application fails then the application can be renewed in another place, but this is a matter for the parties between them. But those would be the submissions, shortly, contrary to the my written submissions, that the matter should proceed by notice of motion before a Full Court.
HER HONOUR: Very well, thank you. Yes, Mr Cook. I take it you do not oppose anything in that?
MR COOK: Thank you, your Honour. We find ourselves in a difficult position. Unlike the prosecutors who describe themselves as “depocketed defendants”, the plaintiff, or the applicant in the Federal Court proceedings, Mr Wakim, is not in such a luxurious position.
The basis upon which we did not oppose the applications today was that we did not enjoy the proposition of having this matter argued at a number of levels through the court at great expense to legal aid ultimately. That is why we are not opposing the matter and probably should have enjoyed what your Honour has debated with Mr Perram but that may be more appropriate for another time.
I cannot say to the Court that if the matter goes before his Honour Justice Einfeld that we will necessarily support a stay at that point. The three matters - and your Honour has been appraised of two of those, the third involving the Official Trustee in Bankruptcy - briefly, the two prosecutors in today's matter were the legal advisers to the trustee and it is our proposition that the trustee acted on that, what we say was negligent advice. So, those three matters are inextricably linked with each other. We would be most reluctant - - -
HER HONOUR: But they are not the one proceeding, are they?
MR COOK: No. The rationale for that pre-dates my involvement and I do not want to comment on those who did what they did many years ago. It is a practical difficulty rather than, as it were, a legal difficulty. We do not
wish to go ahead and run the matter twice or three times. But having said that, I should tell the Court that what we perceive the approach of the prosecutors is that if they were to be successful here, they would be looking towards a limitation argument if the matters were to go into the New South Wales Supreme Court. So, we are in the process of filing statements of claim in the New South Wales Supreme Court and we will deal with the limitation argument when and if it is raised in that court.
The only other matter that I wish to bring to the Court's attention is Mr Wakim obtained the original judgment which led to a seemingly never‑ending set of problems in 1985. It is now 1998, some 13-and-a-bit years since the judgment of Justice Yeldham, and he has not received most of the benefit; perhaps not even half of the benefit of the very original trial judge's determination and we are just anxious to get the matter on and over and done with, preferably not taking another 13-odd years to get the matter dealt with.
So, whichever approach the Court feels minded to adopt or has persuaded my friend to adopt, our real position is that we seek to have the matter brought on as quickly as possibly and as finally as possible. If it please your Honour.
HER HONOUR: Well, that is in the parties' hands. It is really a question of how quickly you prepare your books.
MR PERRAM: I think they can be prepared very quickly.
HER HONOUR: Yes. Mr Perram, I am minded to refer the application to a Full Bench. On that basis, there would be no stay. However, I should indicate that the parties should tell Justice Einfeld that the matter has been referred to a Full Bench. How quickly it comes on really is to some large extent, at least, in the parties' hands. If the application books are prepared, then it will be placed in the list for hearing at the first available date, I imagine.
MR PERRAM: There are some hearings, I think, in Sydney in two weeks time, your Honour.
HER HONOUR: No, that is special leaves. The effect of an order referring it to the Full Bench will be that the whole matter will come on for argument before a Full Bench on the legal issue which you have identified, unless the Full Bench says, “We decline to reconsider the matter.”
MR PERRAM: I understand.
HER HONOUR: You need to file application books, that is all, is it not?
THE DEPUTY REGISTRAR: That is right, your Honour. The earliest sitting day will be in November in Canberra.
HER HONOUR: Yes. It might be an idea - - -
MR PERRAM: There are sittings on 10 November, I think, the next set of sittings are in Canberra.
HER HONOUR: Yes. It might be an idea to give some consideration to whether you require further material than is presently available to me by which I mean the pleadings or, at least, the statements of claim, I imagine.
MR PERRAM: They are in the material.
HER HONOUR: They are there. Has there been any point taken in the Federal Court by way of defence to jurisdiction or anything of that nature?
MR PERRAM: No.
HER HONOUR: Very well. Well, if the pleadings are there then that, I am sure, will be sufficient but I will leave it to the parties. I simply certify for the attendance of counsel. I do not think there is any occasion to consider costs, is there?
MR PERRAM: No, there is not.
HER HONOUR: They will simply be costs of the application. I certify for the attendance of counsel. I think it is not necessary to do anything, is there?
MR PERRAM: No, your Honour.
HER HONOUR: We will adjourn until 12.15.
AT 10.11 AM THE MATTER WAS CONCLUDED
Key Legal Topics
Areas of Law
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Administrative Law
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Civil Procedure
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Judicial Review
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Standing
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Procedural Fairness
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Natural Justice
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Jurisdiction
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