Legal Research Pty Ltd trading as Modern English Language College of AUstralia v The Attorney-General of the Commonwealth of Australia

[1992] HCATrans 193

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B26 of 1992

B e t w e e n -

LEGAL RESEARCH PTY LTD trading

as MODERN ENGLISH LANGUAGE

COLLEGE OF AUSTRALIA

Applicant

and

THE ATTORNEY-GENERAL OF THE

COMMONWEALTH OF AUSTRALIA

Respondent

Application for special leave

to appeal

DEANE J
GAUDRON J

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McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON WEDNESDAY, 24 JUNE 1992, AT 3.32 PM

Copyright in the High Court of Australia

MR CHESTERMAN, OC:  May it please the Court, I appear with

my friend, MR G. MARTIN, for the applicant.

(instructed by Francis and McGregor)

MR P. HACK:  May it please the Court, I appear for the

respondent. (instructed by the Australian

Government Solicitor)

DEANE J:	Yes, Mr Chesterman.
MR CHESTERMAN:	May it please Your Honours, the questions of

law which, in our submission, arise in this

application, are identified in paragraph 10 of the

affidavit in support, which is found at page 34 of
the application book and, in general, we submit

that the first question is: what are the

principles which should be applied by a court when

asked to compel a compliance with a statute by

injunction, where that statute imposes a criminal

sanction by way of monetary penalty for

noncompliance.

Might I inform the Court that in this case the omission which was complained of by the respondent,

and which was the subject of the injunction, is an

omission which is merely, if I can use that term,

noncompliance with the statute. The injunction

does not have the effect of protecting or

perfecting a right, otherwise granting the

protection of a court of equity. In other words,

the injunction would not have been granted on

general equitable grounds. It is only because of

noncompliance with the statute that it was sought

and that it was granted.

In particular, we submit the question that

arises is whether the limitation expressed by

Lord Diplock in the House of Lords in Gouriet v The

Union of Post Office Workers, (1978) AC 435, should

be applied by courts in this country.	May I take
the Court to what Lord Diplock said.	We have

copies for the Court of all the cases to which we

might refer and of the Overseas Students (Refunds)

Act. Might I ask the Court to go to page 500 in

Gouriet in the judgment of Lord Diplock. Just below letter E, His Lordship said:

I do desire, however, to comment briefly upon

the exercise of the jurisdiction to grant a

remedy by injunction on the application of the

Attorney-General in cases where what makes conduct sought to be restrained unlawful as well as harmful is because it constitutes a

criminal offence. Resort to this jurisdiction

is of respectable antiquity. It was first

used in cases of public nuisance as a more

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effective and expeditious remedy than was

provided by indictment or criminal

information. Nevertheless the extension of

its use to statutory offences is modern, and

has hitherto been confined by the consistent

practice of successive Attorneys-General to
statutes whose objects are to promote the

health, the safety or the welfare of the

public and to particular cases under such

statutes either where the prescribed penalty

for the summary offence has proved to be

insufficient to deter the offender from

numerous repetitions of the offence or where

the defendant's disobedience to the statutory

prohibition may cause grave and irreparable

harm, as in Attorney-General v Chaudry. The

use of this procedure for the reasons I have
already given ought not in my view to be

extended beyond those limits.

Your Honours, the point we stress is His Lordship's

limitation of statutes which are suitable to be

enforced by injunction. Statutes, His Lordship

said:

whose objects are to promote the health, the

safety or the welfare of the public and to

particular cases under -

where it is appropriate to grant the injunction.

And the last sentence I read, at letter H:

the use of this procedure for the reasons I

have already given ought not in my view to be

extended beyond those limits.

May it please Your Honours, in a case to which

I make reference only, Commonwealth of Australia v

John Fairfax & Sons, 137 CLR 39, at page 50,

Chief Justice Mason referred with approval to

Lord Wilberforce's judgment in Gouriet and

referred, with apparent approval, to three other

passages in judgments of the House of Lords, in

particular the passage at pages 497 to 500, and at
page 500 contains the passage that I have read to

the Court. Now, I am not saying, with respect,

that this particular point was considered by

His Honour, but His Honour did give apparent

approval to the passage, part of which I have read.

It is our submission, with respect to

Your Honours, that the grant of an injunction to

enforce a statute, ought to be confined to statutes

of the categorization made by Lord Diplock. The

statute in question is outside those categories and

we submit an injunction ought not to have been

granted. We do submit that it is a matter of

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importance for this Court's attention whether that

limitation mentioned by Lord Diplock should have

general application.

DEANE J:  Mr Chesterman, I think you are advisedly directing

your primary argument to whether the judgment or

the decision below is attended by sufficient doubt.

Well now, I would think that is what you have to

worry about in terms of this application and could

I, while interrupting you, direct your attention to

Justice Derrington's comments by way of addendum

which seem to me to have a certain amount of force.

That is at page 26.

MR CHESTERMAN:  Yes. Your Honour, we would challenge, with

respect, the proposition that the imposition by the

statute of a penal sanction exists only as an

ancillary encouragement to the discharge of the

duty. We would submit, with respect, that the fact

that the statute itself, as to the subsection,

imposes a monetary penalty for noncompliance, is an

indication that no other remedy ought to be imposed

and, in particular, that an injunction ought not to

be granted, disobedience to which will expose, in

this case, the applicant to punishment which would

include imprisonment and perhaps a fine greater

than specified by Parliament. We would, with

respect, draw attention to the difference in the

penalty provisions in section 5(2) and (3). Your

Honours will have noted that for disobedience, or

contravention of subsection (3), imprisonment is

imposed by the statute, whereas for contravention

or noncompliance with subsection (2) a fine only is

imposed.

We would submit that the construction that

qught to be put on the statute is that Parliament

intended that noncompliance with subsection (2) not

result in imprisonment, but if an injunction is

granted and there is disobedience to it then the

consequence may well be imprisonment. And we

submit that - - -

DEANE J: Yes. There is a slight problem with that

argument, in that it almost asks the Court to

assume that if an injunction is granted it will not

be obeyed, whereas a court normally acts on the

basis that if an injunction is granted it will be

obeyed.

MR CHESTERMAN:  Your Honour, with respect, of course, but

the consequence for disobedience of the injunction

is graver and in the discretion of the Court,

whereas Parliament has specified what the
consequences are of noncompliance with the section.

Now, if it were intended that noncompliance with subsection (2) be visited by something other than

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the fine and in the amount specified by Parliament,

it would have been easy enough for the Parliament

so to legislate. It did not do so. We submit that

is a fairly clear indication that injunction ought

not to be granted. It may be right, with respect,

to say that one would not normally categorize

subsection (5) of this Act as part of the criminal

law, yet it is a common enough enactment, imposing

a duty or prohibiting conduct and imposing a

sanction by way of monetary penalty and, of course,

the means by which that penalty is enforced is by

criminal proceedings in a summary court. So, to

that extent the proceedings are criminal, and what

is being enforced is conduct, the nonperformance of

which is criminal.

Your Honour, the cases are replete with

warnings that courts ought not to substitute

discretionary penalties for noncompliance with

statutes by granting an injunction. I will not go

into them all, it is sufficient if I refer to a

decision of the Court of Appeal of New South Wales,

which is referred to in our argument - - -

DEANE J: That is Peek v The Egg Corporation, is it not?

MR CHESTERMAN:  Peek v New South Wales Egg Corporation.

That was a case, Your Honours, in which two

injunctions were granted. One of them is in the category of the injunction here, that is, merely

one to enforce a statute. The other also had the

effect of enforcing proprietary rights because, in

relation to the eggs, which were the subject of one

injunction, they were the property by statute of

the Egg Corporation, so that the injunction had the

effect of enforcing a proprietary right that would

otherwise be enforceable. It was coincidental that
the injunction also enforced the statutory

provision.

There is a useful, if I may say so with

respect, summary of the cases in the judgment of

President Kirby, and he refers, at page 3, just

below letter D, to the consideration I have just

been mentioning. His Honour said:

Secondly, there is the consideration that

if, in a statutory offence, it had been

intended to provide, amongst the sanctions

enacted, the facility of injunctive relief,

the legislature could readily have done so.

By its omission it might be taken, ordinarily,

to have excluded such relief, in reliance upon

the criminal sanctions expressly provided by
law and having regard to the general principle

of construction by which criminal statutes are

strictly interpreted. Thirdly, there is the

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consideration that injunctions may, for their

breach, give rise to punishment, including by

way of imprisonment for contempt of the

court's order. Where the legislature has

provided nothing more than a fine, and has, by

inference, expressly omitted punishment by

imprisonment, the provision of injunctive

relief should not become the means of

introducing by the orders of a court that more

drastic punishment, which Parliament has

expressly failed or declined to provide -

and he referred to what the House of Lords said in

Patents Agents Institute v Lockwood.

Your Honours, in our submission, the Court of

Appeal erred in treating the appeal to it as though

it were simply an appeal against exercise of

discretion because, in our submission, the case

involves a point of law and of principle, namely

whether the statute was of a type which the Court

should enforce by injunction. In our submission,

the answer to that question should have been no,

and we would submit that the categorization of

statute, which is amenable to enforcement by

injunction, is that limited by Lord Diplock in the

passage I read from Gouriet.

The House of Lords in Gouriet said, in the

passage in the judgment to which

Chief Justice Mason referred, that the grant of an

injunction to enforce a statute is rightly seen as

special or exceptional and the grant of the

injunction should be hedged about by great caution.

Now, the approach of the Court of Appeal here is

rather different. The Court approaches it purely

as a matter of discretion and says that, in effect,

any statute may be enforced by injunction where, in

the discretion of the judge - properly exercised of

course - it is proper to do so.	Now, we would
challenge that on two grounds.

We would submit that it is clear from the

House of Lords in Gouriet that the statute must be

of a particular type, the sort I have indicated,

and secondly, that something more must be shown

than mere noncompliance with the statute. There

must be some feature in the case additional to

noncompliance. Now, there was nothing in this case

other than noncompliance and, we submit, as I have
said already, it was not a statute of the requisite

type.

For the second submission I have been making

that there must be something other than

noncompliance, can I refer the Court to another

decision of the House of Lords, Stoke-on-Trent City

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Council v B & Q Ltd, (1984) 1 AC 755. It was a

case involving noncompliance with the statute that

limited trading hours. It prevented trading on

Sundays, effectively, and the respondent, in

defiance of the law, traded, but in so doing it

gained a commercial advantage for itself. It was

that feature which led the House to consider that

the grant of the injunction was appropriate.

May I take the Court to page 767 of the

report in the speech of Lord Fraser, in the second

sentence. Their Lordships agreed with the speech
of Lord Templeman, but Lord Fraser said:

I wish particularly to associate myself with his view that something more than infringement

of the criminal law must be shown before the

assistance of civil proceedings, by way of

injunction, can be invoked by the local

authority. That something more is required in

order to establish that the offender is not

merely infringing the law but that he is

"deliberately and flagrantly flouting it".

Can I then ask the Court to go to page 776 in the

judgment of Lord Templeman, with which the other

members of the House agreed, where His Lordship

dealt with this point. Just between letters A and

B, four lines from the top, His Lordship said:

Where Parliament imposes a penalty for an

offence, Parliament must consider the penalty

is adequate and Parliament can increase the

penalty if it proves to be inadequate. It

follows that a local authority should be

reluctant to seek and the court should be reluctant to grant an injunction which if

disobeyed may involve the infringer in

sanctions far more onerous than the penalty

imposed for the offence.

Now, can I go down to letter C, His Lordship goes

on: 

In my view there must certainly be something

more than infringement before the assistance

of civil proceedings can be invoked and

accorded for the protection or promotion of

with what appeared to be a proliferation of

the interests of the inhabitants of the area.

illegal Sunday trading.

If I can omit the next sentence:

The council received letters from traders

complaining of infringements of the Sunday

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trading legislation by other shops and

intimating that the complainants would

themselves feel obliged to open on Sundays in

order to preserve their trade unless the Act

was generally observed. The council could not

treat some traders differently from others.

The council wrote to warn infringing traders

some of whom ceased to trade on Sundays as a

result of the warnings. In one case where an

ignored warning was followed by the issue of a

writ the proceedings resulted in an

undertaking to desist.

Now, in our submission, that is the sort of

requirement that is necessary before a court ought

to lend its assistance by enforcing a statute by

injunction. There must be some financial or

commercial advantage being gained by the infringer,

or some detriment being caused to his rivals or

trade competitors. There is nothing of the sort in

this case.

McHUGH J: Well, what about Lord Fraser's statement that

what is required is that the defendant is

"deliberately and flagrantly flouting" the law?

You have had four notices in this case with which your client has failed to comply and your client

has been convicted in relation to two of its

failures.

MR CHESTERMAN:  We would say, in respect to that, that the

speech of Lord Templeman is that really of the

House and His Lordship made it clear there should

be something other than disobedience to the

statute, even persistent disobedience to the
statute. There must be some other factor which

must be identified, and in that case it was, as I

say, the advantage which the respondent had by

opening on Sunday and the consequent disadvantage

its competitors suffered.

The other point I would make in answer to

Your Honour's observation is the judgment of

Chief Justice Latham, in a case to which we refer,

Ramsay v Aberfoyle, 54 CLR 230. That is an old case and it is of a category which would now itself, one

suspects, be decided differently, but His Honour's

remarks, we submit, are still apposite and perhaps

we should submit that it is a question for this

Court whether His Honour's remarks are still

apposite. His Honour took exception to the

proposition that there is a general equity to

enforce the criminal law or the statute law.	Can I
take the Court to page 239? In the third line,
His Honour said:

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A court of equity has no general duty to

"enforce the law," either at the suit of the

Attorney-General or of private persons.

Criminal Courts exist for the purpose of

enforcing the criminal law and magistrates'

Courts have the function of enforcing many

laws which create offences.

His Honour then referred to Lord Herschell's judgment in Institute of Patents Agents v Lockwood,

and at page 240 His Honour said, at about point 6,

the second paragraph to begin on that page:

This case -

that is Lockwood's case

has often been followed and applied and I am aware of no subsequent decision which in any degree diminishes the authority and weight of

these important general principles.

The major premise in Lord Herschell's judgment was

that courts ought not to enforce statutes by

injunction, thereby increasing the potential

penalty or punishment to an infringer. Then at

page 241, about point 8, having referred to

Attorney General v Sharp, Chief Justice Latham goes

on, I think seven lines from the bottom:

The defendant had been fined for this offence

sixty times. It was held that this fact

showed that the remedies provided by the act

were ineffective and that the Court had

jurisdiction to grant an injunction

restraining the defendant from causing or

permitting any of his motor omnibuses to ply

for hire in breach of the statute. Lawyers

are familiar with the principles relating to

the inadequacy of a common law remedy in

damages which in particular cases provide a

foundation for the application of the

equitable remedy by way of injunction. It

appears to me that those principles are given

a new application when a Court decides that a

penalty imposed by a statute is inadequate
because it has not proved to be a deterrent in

a particular case, with the result that an

injunction is granted so that a further breach

of the law will involve a contempt of Court

with consequent imprisonment.

His Honour then referred to Sharp's case which

followed the earlier one and then said, at 243,

five lines from the top:

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Upon this principle a Court of equity

would, in cases where the Attorney-General is

a party, have a most extensive and hitherto

and unprecedented field of authority in

securing observance of the law. Obedience to

any ordinary public statute is a matter of

concern to the public, but in my opinion the

general interest of the public in the

observance of the law is not in itself

sufficient to justify the Court in granting an

injunction at the suit of the

Attorney-General.

And if I omit the next sentence:

Prima facie it is for Parliament to see that the remedies for breach of a statute are

adequate to secure observance of the law, and

it is not for any Court of law or of equity to assume a general supervision, even at the suit of the Attorney-General, for the purpose of

remedying what it regards as the defective

machinery of a statute.

Now, we would rely upon those remarks in

particular, and submit that they ought still to be

given currency. As I think I said to Your Honours

earlier, there is nothing in this case other than

noncompliance with the statute. There is nothing

of the sort of commercial advantage over rivals,

and it is not a statute in the category identified

by Lord Diplock.

DEANE J: What would you say the power to obtain information

and documents conferred by section 5 was directed

to?. To enabling overseas students to get refunds,

or to enable the Commonwealth to recover money

after it itself has made the refund and accepted an

assignment?

MR CHESTERMAN:  I would have thought the former,

Your Honour.

DEANE J: Well then, if the purpose of section 5 is to

enable overseas students to get refunds, is it not

the very type of statutory provision that

considerations of justice require to be enforced by

injunction?

MR CHESTERMAN:  We submit not, for two reasons: one is the

one that I have just been endeavouring to discuss,

that it is not part of a court of equity's general

concern with justice to enforce such statutes - - -

DEANE J: Yes, except I would have thought a modern court's

concern with justice would extend to the overseas

Legal 10 24/6/92

student who is precluded from coming here more

readily than to the commercial competitor.

MR CHESTERMAN:  We would submit not, but also submit

that - - -

DEANE J:  I suppose it is a matter of perceptions,

Mr Chesterman.

MR CHESTERMAN:  Yes, indeed, Your Honour. We would submit

also, with respect to Your Honours, that it

really has to b~ a case in the limited category

identified by Lord Diplock before it is appropriate

to substitute the discretionary penalty that is a

result of disobedience to an injunction.

DEANE J: Well, I think you have indicated the argument very

well, if I might say so.

MR CHESTERMAN:  Thank you, Your Honour. Can I just finish

on this note? The trial judge dealt with the

matter on the basis that Gouriet correctly applied

the law - or at least, Gouriet properly set the

principles, and that a court should only grant

injunctions and enforce a statute where
circumstances were special, or it was an

exceptional case. His Honour thought it was

exceptional or special because what was sought was

a mandatory rather than a prohibitory injunction.

Can I just give the Court the page reference? It

really goes from page 15 to 16 of the application

book, where that point emerges as the basis on

which His Honour acted.

The Court of Appeal dealt with the matter

on ·the basis it was simply an appeal against

discretion. We submit that the trial judge was

wrong in acting as he did and thinking it was

exceptional simply because a mandatory injunction

was sought and, secondly, we submit that the Court

of Appeal was wrong in not recognizing the

submissions which we have put to the Court.

GAUDRON J: But there is a difference, is there not, as

recognized by the learned trial judge? I mean, it

may be somewhat more refined than His Honour put

it, but you are talking in the one case about a

positive duty to do something and you are talking

in the other case about restraining an act which

may or may not occur and which, if it does occur,

is a breach of the criminal law.

MR CHESTERMAN:  We would submit, with respect, Your Honour,

that it is a distinction without a difference; that

in each case what a statute does is to impose a

penalty, or a liability to a penalty for a breach

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of the obligation, where the obligation is to do

something - - -

GAUDRON J: Or to not do something.

MR CHESTERMAN:  - - - or to refrain from doing something,

and there is no relevant distinction in the two

sorts of injunction or the act or the omission; in

both is a duty, imposed by statute, either to do

something or not to do something, a breach of which

a punishment is prescribed. The question whether

an injunction should go to enforce compliance with

the statute is the same principle, whether it

is an omission or act.

Your Honours, I do not know that I can say anything else useful.

DEANE J: Thank you, Mr Chesterman. The Court need not

trouble you, Mr Hack.

The Court is of the view that the decision of the Court of Appeal is not attended by sufficient

doubt to justify a grant of special leave to

appeal. Accordingly the application is refused.

MR HACK:	I ask for costs, Your Honours.
DEANE J:	Mr Chesterman.
MR CHESTERMAN:	I cannot oppose it, Your Honour.

DEANE J: The application is refused with costs.

AT 4.02 PM THE MATTER WAS ADJOURNED SINE DIE

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