IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Melbourne No M141 of 2000
B e t w e e n -
MOBIL OIL AUSTRALIA PTY LTD
Plaintiff
and
THE STATE OF VICTORIA
First Defendant
TASFAST AIR FREIGHT PTY LTD
Second Defendant
Demurrer
GLEESON CJ
GAUDRON J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON TUESDAY, 5 FEBRUARY 2002, AT 10.18 AM
Copyright in the High Court of Australia
MR D.F. JACKSON, QC: If the Court pleases, I appear with my learned friend, MR G.R. KENNETT, for the plaintiff. (instructed by Blake Dawson Waldron)
MR D. GRAHAM, QC, Solicitor General for the State of Victoria: May it please the Court, I appear with my learned friend, MS C.M. KENNY, for the first‑named defendant. (instructed by the Victorian Government Solicitor)
MR J.B.R. BEACH, QC: If the Court pleases, I appear for the second defendant with MR B.F. QUINN and MS L.M. NICHOLS. (instructed by Slater & Gordon)
MR D.M.J. BENNETT, QC, Solicitor‑General of the Commonwealth: If the Court pleases, I appear with my learned friends, MS K.L. EASTMAN and MR G.A. HILL, for the Attorney‑General of the Commonwealth intervening in the interests of the defendants. I have agreed with the other Solicitors‑General that I will address last, subject to the views of the Court. (instructed by the Australian Government Solicitor)
MR B.M. SELWAY, QC, Solicitor‑General for the State of South Australia: If it please the Court, I appear with my learned friend, MR P.S. PSALTIS, for the Attorney‑General for South Australia intervening in support of the defendants. (instructed by the Crown Solicitor for the State of South Australia)
MR M.G. SEXTON, SC, Solicitor‑General for the State of New South Wales: If the Court pleases, I appear with my learned friend, MR M.J. LEEMING, for the Attorney‑General for New South Wales who intervenes in the proceedings. (instructed by the Crown Solicitor for the State of New South Wales)
MR R.M. MITCHELL: May it please the Court, I appear for the Attorney‑General for Western Australia intervening in support of the defendants. (instructed by the Crown Solicitor for the State of Western Australia)
GLEESON CJ: Yes, Mr Jackson.
MR JACKSON: Thank you, your Honours. As the Court will have seen, the defendants have demurred to the statement of claim, which appears at page 4 of the record.
GUMMOW J: Does it appear, Mr Jackson, that, looking at page 5 of the statement of claim, which is a secondary document, as it were, these features of contract referred to in paragraph 6, do we know what is said to be the proper law of those contracts?
MR JACKSON: Your Honour, it does not appear in the material. Your Honours, could I just say, in relation to the statement of claim, that the argument foreshadowed an amendment to it, to delete a separate claim, which appears in paragraph 2 of the prayer for relief on page 7. A document incorporating the amendments to effect that has been filed; your Honours should have copies of it, and I seek leave to amend the statement of claim in that fashion.
GLEESON CJ: Is that opposed?
MR GRAHAM: No, your Honour.
GLEESON CJ: Yes, thank you.
MR JACKSON: Your Honours, the provisions in question in the proceedings are the provisions of Part 4A of the Supreme Court Act 1986 of Victoria. Those provisions were inserted by section 13 of the Courts and Tribunals Legislation (Miscellaneous Amendments) Act 2000. The essence of the amendment is, relevantly, that they empower the Supreme Court to entertain and to determine what are described as “group proceedings”. Your Honours, I will come to the provisions of them in just a moment, but, in essence, persons, within or without Victoria, who may have claims which are no more than similar – in the sense that they involve a similar issue of fact or law – have their claims determined by the court in Victoria, sometimes whether they know of it or not, and, indeed, whether they wish to make a claim at all or at that point. There are provisions for opting out, but I will come to those in a moment. Opting out in some circumstances.
The actual subject matter of the claims may or may not have any connection with Victoria. I will come to this again a little later but, in our submission, the legislation provides no basis for reading it down to matters that otherwise would have a connection with Victoria.
HAYNE J: Connection of what with Victoria – the claimant and the claim, is that right?
MR JACKSON: Yes, your Honour.
HAYNE J: In what other personal action has a connection between either the claimant or the claim been of any significance to whether a court will exercise jurisdiction over a defendant regularly served within the jurisdiction?
MR JACKSON: Could I say this. First of all, there is the question of service in the jurisdiction and leaving aside for the moment the extension of that provided for by the Service and Execution of Process Act. One has a situation where, absent any extension of the ability to serve, the way in which service may be effected and jurisdiction thus attracted depends on fundamentally two things. One thing of course is service within the jurisdiction. I accept what your Honour says, that if there is service within the jurisdiction, that then does not impose a secondary limit upon the nature of the claim that might be the subject of it.
HAYNE J: Whereas here you have a defendant incorporated within the jurisdiction served within the jurisdiction, why is it not the business of the State to settle a claim made against such a defendant, wherever the claimant may be, wherever the subject matter of the claim may have arisen?
MR JACKSON: Your Honour, because what one has is legislation which brings to the Victorian court claims which may or may not be sought to be made by persons who themselves may have no connection with Victoria and then the only connection with Victoria is the fact that one has a defendant who is in Victoria. Now, in relation to that, the point we would seek to make is that one is dealing with a case where there are other States in the Federation, not just Victoria, and the legislation of Victoria, to the extent to which it would have the effect of compelling those claims to be dealt with in Victoria, is legislation which lacks the relevant connection.
GLEESON CJ: Was this aviation fuel all manufactured in the one place?
MR JACKSON: I am sorry, your Honour, I just cannot give your Honour an answer to that. Yes, your Honour, all manufactured in Victoria, as I understand.
GLEESON CJ: So this is a product liability claim against a company incorporated in Victoria, the product being manufactured in Victoria?
MR JACKSON: Yes, your Honour.
KIRBY J: You do not dispute the jurisdiction of the court in respect of persons in Victoria, or perhaps even wider than that. What you say is that the legislation involves an overreach to permit the State court to make orders in respect of persons beyond Victoria, elsewhere in the Commonwealth.
MR JACKSON: Yes, your Honour.
HAYNE J: Do you say, therefore, that a New South Welsh resident cannot institute a proceeding in the courts of Victoria? That is a startling proposition.
MR JACKSON: No, I do not say that, your Honour.
HAYNE J: Then what is the difference between the proposition and this asserted overreach?
MR JACKSON: Your Honour, what we seek to say is this – and one is speaking, of course, about legislative power. We do not suggest that Victoria or any of the States cannot legislate in a number of ways to cover much of the subject matter of the legislation in question here. What we do say, however, is that in so far as the legislation has the effect of requiring claims by persons whose claims have no other connection with the jurisdiction to be determined by the procedure of the Victorian court, then that is the extent of overreach.
HAYNE J: Can I ‑ ‑ ‑
MR JACKSON: I am sorry, your Honour, may I say one other thing?
HAYNE J: Please.
MR JACKSON: They are not people, in a number of cases – in some cases they are but in a number of cases not – persons voluntarily invoking the jurisdiction of Victoria. One tends to think of the position of the defendant, but one is, after all, speaking about litigation that involves the position of someone who is brought into the jurisdiction, as, in effect, a plaintiff.
HAYNE J: The proposition that seems to me to underpin your contentions is one that denies the sufficiency of service on a Victorian incorporated defendant within Victoria ‑ ‑ ‑
MR JACKSON: Your Honour, we ‑ ‑ ‑
HAYNE J: And that that is not, of itself, without more, a complete answer to the question of connection.
MR JACKSON: Your Honour, we do not, if I may put it this way, deny that service in Victoria on a Victorian company both attracts the jurisdiction of Victoria. Your Honour, we do not question that at all. That is very well established, of course, apart from anything else. Your Honour, what we do seek to say is that one is speaking in that connection, leaving aside the unusual case, of circumstances where a person institutes proceedings in Victoria seeking to attract the jurisdiction of the court. Your Honour, the point which we would depart from what your Honour was putting to me I think, was that these are cases where the jurisdiction of Victoria is sought to be attracted by the legislation, not by a person who is to be bound by the judgment seeking to attract the jurisdiction, except for the plaintiff, of course. The jurisdiction is then attracted in respect of persons who have no connection with the litigation apart from the fact that they have a claim which is similar against the same person, similar or has some relevant similarity. It is the addition of those things, those persons, that fundamentally gives rise to the aspect of the case which we seek to agitate.
HAYNE J: So that a State legislature cannot take as its criterion of operation, to personalise it, claims against “our” citizens. It can look only at claims by, or claims having some connection with, “our” jurisdiction. It cannot say, “You want to sue someone in our State who has a connection with our State, we will regulate it in this way”.
MR JACKSON: Your Honour, a difficulty which does arise in doing that is that it may be possible to do that in relation to persons who are not, for example, residents of a State or Territory, but in relation to persons who are – and it would then be a question for other jurisdictions to see whether that would be enforced by those jurisdictions. But if one is talking about the position in the States, for example, of Australia, what you have is persons whose claims may well arise under the laws of those States, they are entitled to seek to invoke the jurisdiction of a number of places, and for Victoria to say, “You can only invoke the jurisdiction of Victoria subject to our licence” ‑ ‑ ‑
GAUDRON J: That is something of an over‑generalisation, is it not? There is nothing in the legislation which stops people, even if they are included in the representative action, from commencing proceedings in the State in which they suffered damage.
MR JACKSON: Your Honour, there is nothing to stop them commencing proceedings, I accept that.
GAUDRON J: Then what would happen is that that would be determined in proceedings in one or other of those courts without any great difficulty, would it not? This is not uncommon. Something similar happened in CSR v Cigna, did it not?
MR JACKSON: Yes, your Honour, of course, in relation to anti‑suit injunctions. Your Honour, could I say in relation to what your Honour has put to me, at the heart of the legislation lies the fact that what emerges from the proceedings is a judgment of the court, and it is a judgment which is one which, of its nature, is binding and is given effect in all other jurisdictions in Australia, apart from section 118, by the provisions of the Service and Execution of Process Act, section 109, without regard to any issue of private international law. Your Honour, could I say in relation to that ‑ ‑ ‑
GUMMOW J: You do not challenge the operation of the Service and Execution of Process Act, do you?
MR JACKSON: No, your Honour, that has not been challenged.
GUMMOW J: Upon this sort of judgment.
MR JACKSON: No, your Honour. Your Honour, could I say in relation to it, it would ‑ ‑ ‑
GUMMOW J: I am not sure what reliance you place on the Service and Execution of Process Act.
MR JACKSON: Your Honour, I was really just mentioning it to say that, relevantly, I suspect, it adds nothing to section 118 because if it is a judgment of the Victorian court then, as is the judgment of the court of any other State, it is to be recognised and given effect throughout Australia, throughout the Commonwealth. Your Honour, going back to your Honour Justice Gaudron’s question to me, what I am seeking to say about it is this: if you have a situation where one is brought into the proceedings by virtue of the similarity of the claims, brought into the Victorian proceedings, then they may well proceed – they are perfectly capable of proceeding to a judgment, and the object of them is to obtain judgment and, your Honours, once that is done the situation which obtains is that that judgment will be binding unless in some way it is itself set aside.
GUMMOW J: But does the presence of 118 in some way in your argument support some constriction of the State jurisdiction?
MR JACKSON: Yes, it does, your Honour, in the sense that the State is empowered to legislate, to use the expression one finds in the Victorian Constitution, in and for Victoria. What one has is that the other States, although differently expressed, have legislative power which is power to legislate in relation to, in one way or another, the territory of the State. When one comes to ‑ ‑ ‑
KIRBY J: You work backwards, do you? You say section 118 requires recognition and enforcement of the orders of the court of the State and therefore, because a person ought not to be put to the inconvenience and possibly the impossibility of upsetting the order of the State, therefore you have to limit the power of the State to make orders of that kind?
MR JACKSON: Yes, your Honour, because recognition has to be given by virtue of section 118 to the laws of each State. If the situation is one whereby the law of one State says claims must be determined unless you opt out, in effect, or are permitted out or the judgment is set aside, that, in our submission, is something which affects the laws of the other States which (a) confer jurisdiction; (b) provide for the law to be a law applicable in determining the claim; and ‑ ‑ ‑
KIRBY J: Does the Act purport to apply to overseas plaintiffs?
MR JACKSON: Yes, your Honour, it does.
KIRBY J: So it applies to the whole world?
MR JACKSON: Yes.
KIRBY J: Could you just help me with Flaherty v Girgis? I recall it dimly from Court of Appeal days, but that was a case where the defendant was not in the jurisdiction, is that correct, and the link to the jurisdiction was the damage happening to the plaintiff in the jurisdiction?
MR JACKSON: Yes, I think so, your Honour.
KIRBY J: So it is a different problem to this case.
MR JACKSON: Yes.
KIRBY J: As Justice Hayne has pointed out here, we have the defendant in the jurisdiction and served in the jurisdiction in respect of something it did in the jurisdiction.
MR JACKSON: Yes. I am sorry, is your Honour talking about Flaherty v Girgis in the last thing your Honour said?
KIRBY J: Yes, the New South Wales rule that said it is enough if part of the plaintiff’s damage happened in the jurisdiction. That seemed to some a very tenuous territorial connection.
MR JACKSON: Indeed, your Honour.
KIRBY J: But it was upheld by this Court.
MR JACKSON: Yes. I am sorry, I just thought I had misheard the last thing your Honour said to me.
KIRBY J: No, Flaherty v Girgis.
MR JACKSON: No, your Honour, that is right. But of course, there was something that happened in the jurisdiction.
KIRBY J: Here there was something that happened in the jurisdiction; it just did not happen to the particular plaintiff. The theory is that it did not happen to the particular plaintiff who, as you point out, may not even know that it is happening, especially if he or she is overseas.
MR JACKSON: That is so, your Honour. In cases where there is no claim for damages, the court may dispense with the giving of notice altogether.
KIRBY J: But there must be many cases where judgment is entered against a person or entered affecting a person where the defendant is in the jurisdiction and a person potentially affected is overseas or is beyond the particular State jurisdiction.
MR JACKSON: Your Honour, that would usually only occur in cases where that other person – where one is speaking about defendants – and, normally speaking, where the defendant is a person who is a necessary or proper party to proceedings otherwise within jurisdiction. But, your Honour, one is really speaking here of invoking jurisdiction in respect of persons who may have no desire to invoke it and no other connection with it.
GUMMOW J: Now, Mr Jackson, I think we really better have the statement of claim in the primary proceeding.
MR JACKSON: Yes, your Honour, I will endeavour to ‑ ‑ ‑
GUMMOW J: In a way, the statement of claim here is embarrassing without it.
MR JACKSON: Well, your Honour, we do not ‑ ‑ ‑
GUMMOW J: And Order 26 rule 6 provides a specific footing for it I think.
MR JACKSON: Your Honour, I think that would be for the other sides to do, but we have no objection to that course being followed.
GUMMOW J: Yes, that is right, yes.
GAUDRON J: Do I understand this correctly: so far as territorial connection is concerned, your complaint hones in on it being an opt‑out procedure rather than an opt in? If it were opt in, you would not have any complaints about territorial connection?
MR JACKSON: No.
GAUDRON J: No, so it is opt out. At bottom, does it come down to this ‑ ‑ ‑
MR JACKSON: Your Honour, may I say opt out and roped in, as it were. It has two aspects to it really.
GAUDRON J: It comes down to this, does it, that at some stage there may be a conflict of the laws of different States; there may at some stage be operational inconsistency as we understand that word in a 109 context?
MR JACKSON: Your Honour, it goes beyond that and it goes beyond that ‑ ‑ ‑
GAUDRON J: To what extent does it go beyond that?
MR JACKSON: If I could put it this way in two respects: one is that it is not really possible, in our submission, to find any discrimen or test within the statutory provisions by which one could read them down to bring them within what, in our submission, is the State legislative power.
GAUDRON J: Surely that is to reverse the order of analysis – well, I hope it is – because what one has to find is the reason for the limitation on State legislative power before one can find out what the limitation is. Now, does the reason why you assert there is a limitation on State legislative power at bottom come to the possibility of operational inconsistency between the laws of different States and a State and a Territory?
MR JACKSON: Your Honour, it comes, really, I suppose, to two things. What your Honour has put to me is one; it is the possibility of inconsistency, in effect. But, on the other hand, one is speaking about legislatures which themselves are of limited power in some respects. What I mean by that ‑ leaving aside, of course, other constitutional limitations – is that they are legislating for Victoria. I do not mean that in any narrow sense, but legislation which requires a connection with Victoria or Queensland or wherever it might be.
GAUDRON J: Well, we have one. We have a connection with Victoria, but you say it is not sufficient.
MR JACKSON: The connection with Victoria that is provided for by the statute is a connection which fundamentally relates to the fact that the court is a court in Victoria, but, your Honour ‑ ‑ ‑
GAUDRON J: I would have thought that was sufficient connection for there to be a connection, but you want a more precise connection.
MR JACKSON: Well, your Honour, could I just say, if that is sufficient, then there would not seem to be any reason why, for example – if I just give one example – a case between two neighbours who are Omaha cattle breeders, in a case of cattle trespass between the two of them, where neither of them is resident in the jurisdiction or in the jurisdiction.
HAYNE J: And that is common enough, is it not? Where there is a dispute in the courts of the State between traders who have no permanent connection with the State at all, if there is a submission to jurisdiction by the defendant, the court hears it.
MR JACKSON: Your Honour, that is because the submission to jurisdiction is something, I suppose, which is treated as an acceptance of the jurisdiction. The issue does not arise.
HAYNE J: And here, your client is not in a position to choose whether to submit to jurisdiction, because it is incorporated in Victoria and served within.
MR JACKSON: Indeed, your Honour. If the proceedings were proceedings by the plaintiff individually, we would not be in a position to do anything about it, of course. Your Honour, I would accept that. But what we say is that these are not proceedings that are of that kind. What one has is that they proceed as group proceedings under Part 4A; they are dealt with entirely, in a sense, by that part; and, in relation to that, the provisions of Part 4A, by the addition of any other person who might be a plaintiff, who might have the relevant similarity, in our submission, makes the proceedings ones where it is impossible to say that they should be read down to fit only with this case, or that class of case, or the other one. What we say is they go beyond power ‑ ‑ ‑
GAUDRON J: Before you can come to that reading down, do we not have to know what is the limit that you say attaches to the legislative power of Victoria?
MR JACKSON: Your Honour, the limit is, if I can put it – I would need to put it generally, of course.
GAUDRON J: I do not know that you should. Can you? Either you tell us the principle that limits it or you tell us the precise limitation, must you not?
KIRBY J: This Court has not been very helpful in defining the principle. It has said it is very hard to state what it is.
MR JACKSON: Your Honour, I suppose one can say that the principle is, for example, that stated by Sir Owen Dixon in the passage in the Broken Hill Case to which our learned friends refer in their written submissions. There has to be ‑ and it is put in a number of ways ‑ some connection with the territory of the State. Now, in relation to that, if I could go back for a moment to the various connections, one sees in provisions such as Order 7 of the Victorian Rules which the provisions for service out of the jurisdiction overseas, as it is now, various connections that have been relied upon to give jurisdiction in cases other than service within the jurisdiction.
GLEESON CJ: Is not the court the connection?
MR JACKSON: In our submission, no, your Honour.
GLEESON CJ: Suppose the Parliament of Victoria decided, as a matter of policy, to promote Victoria as a centre for commercial dispute resolution for the Asia‑Pacific region and expanded the jurisdiction of the commercial division of the Supreme Court of Victoria in some way that encouraged resort to that court by people from within Australia and from neighbouring countries in the region, would that not attract legislative power?
MR JACKSON: Your Honour, it may well in various respects. Various aspects of it may, but if there were no connection with Victoria, other than the provision of Victoria - Victorian courts – then, in our submission, it would go outside the Victorian legislative power.
KIRBY J: You have to have a theory that derived from the Constitution is a territorial system where the States have to work together within the one Commonwealth and that anything that goes beyond something which is peripheral, yet to be defined, is an overreach which the Constitution forbids.
MR JACKSON: Yes, your Honour.
KIRBY J: That is the heart of your submission.
MR JACKSON: We do, your Honour, because ‑ ‑ ‑
HAYNE J: How is that consistent with the existence of the well‑established and elaborate body of conflict of laws rules that the State courts routinely apply?
MR JACKSON: Your Honour, it is consistent because one does have – your Honour, could I say that conflict of laws rules cover a number of different things.
HAYNE J: Commonly where the claim has no relevant territorial connection with the State concerned, so, for example, a contact is made elsewhere governed elsewhere.
MR JACKSON: Your Honour, that will arise, primarily at least, in cases where the connection with the State is the fact of service of a person within the jurisdiction.
HAYNE J: Just so.
MR JACKSON: Your Honour, in those circumstances the substantive law being applied is the law of Victoria, but the law of Victoria is law which will apply by its own private international law, the law of somewhere else or absent some evidence, I suppose, to show it is different, then the law of Victoria would be applied to it.
HAYNE J: Just so, and the basal connection is the connection of jurisdiction over the defendant.
MR JACKSON: Yes.
HAYNE J: A claim is made against the defendant and it is a controversy that then is quelled.
MR JACKSON: Your Honour, a claim is made against the defendant and there is a controversy which is quelled and if one looks, for example, at Laurie v Carrol, one sees that derives originally from the fact that the person of the defendant was within the jurisdiction, the sovereign could deal with it. Your Honour, that is in a case where one has a controversy. Undoubtedly, in group proceedings there is at least one person, the plaintiff, who is the person with whom there is a controversy on the party that has been served. The point we would seek to make about it is there may no controversy at all between other persons and the defendant, and those persons may be persons whose claims are ones which relevantly are governed entirely by other laws.
GAUDRON J: Again, it is only “maybe” on your proposition. It is not that their claims are governed by other laws.
MR JACKSON: Your Honour, I accept that.
GAUDRON J: In a context, at least in an Australian context, having regard to the full faith and credit clause, why should it matter?
MR JACKSON: Your Honour, it should matter for these reasons. First of all, in relation to the full faith and credit aspect of it, one of the aspects to which full faith and credit should be given, in our submission, is found in the provisions of laws of other Australian jurisdictions which apply to cases and which provide for the other courts to have jurisdiction. An aspect of that is that a person who seeks to make a claim will, in the ordinary course of events, pursuant to those laws have an ability to do so in particular courts and an ability to do so at a time, subject to time limits, of that person’s own choosing. The effect of the present law, the law presently in question, is that what it does is compel people to be bound, subject to the ability to be excluded in some cases - compel people to go to a particular court.
In terms of practicality, your Honours, if your Honour is speaking about possible underlying reasons, what you have is a situation where the persons who are bound by the decision and who, bound by the conduct of the case, are persons who themselves (a) may not know of the proceeding, (b) may be able to play no effective part in the conduct of the proceedings, and, your Honours, in those circumstances, the way in which their particular claims are dealt with, maybe ways with which they do not assent or are not very happy.
GLEESON CJ: But what you just said applies to people who are residents of Victoria as well as people who are residents of New South Wales. What is the difference between their respective positions?
MR JACKSON: The difference is this, your Honour. So far as the people in Victoria are concerned, their presence in Victoria would be perfectly adequate to enable Victoria to legislate about them, but one is speaking about persons who are not.
HAYNE J: Can I understand something about the way in which Part 4A operates, Mr Jackson, particularly section 33C. Am I right in understanding 33C as confining those with whom it deals to persons who have claims, in this case against Mobil, and that, therefore, central to the operation of Part 4A is the recognition that a number of persons, known or unknown at any particular point, have claims against Mobil? At the end of this process, Mobil will know how much, if anything, it owes in total in respect of all claims made arising out of this substantial common question of law or fact; is that right?
MR JACKSON: There will be a judgment which would bind all the persons who satisfy the test in 33C(1), your Honour, yes.
HAYNE J: And those persons in 33C(1) are necessarily persons who have a claim against Mobil?
MR JACKSON: All persons who have a claim, yes.
GLEESON CJ: Is the word “claim” defined?
MR JACKSON: No, your Honour.
GLEESON CJ: Does it mean “right of action”?
MR JACKSON: Well, your Honour, a claim to a right of action, it would seem to be.
GLEESON CJ: I mean by that, do you have to be asserting a right to have a claim?
MR JACKSON: No, your Honour, it does not seem to suggest ‑ ‑ ‑
GLEESON CJ: So you might have a claim whether you know it or not?
MR JACKSON: Yes.
GLEESON CJ: And whether you wish to pursue it or not?
MR JACKSON: Pursue it or not, yes.
KIRBY J: Would the State Interpretation Act require that you interpret “person” as being a person in Victoria?
MR JACKSON: Your Honour, it would seem not. Could I just say, the reason why I say that is, if your Honour goes, for example, to 33KA(2) ‑ ‑ ‑
KIRBY J: I am thinking of the precondition to get the case off the ground, that there must be the seven persons.
MR JACKSON: Well, your Honour, may I come back to the provision in a moment, but 33KA(2)(a) I was going to refer your Honour to.
KIRBY J: It is not quite the same.
MR JACKSON: No, your Honour. The point I am seeking to make about it though is that persons who are group members, 33KA(2) makes it apparent that they need not be persons who are in Victoria.
Your Honours, may I go for a moment to the provisions. One really starts from section ‑ ‑ ‑
KIRBY J: Just before you do that, whilst we are giving you these helpful preliminary thoughts of the Court on the matter before you really present your argument, what happened to the case of Schutt? Special leave was sought, but was it granted or ‑ ‑ ‑
MR JACKSON: Your Honour, what happened was ‑ ‑ ‑
KIRBY J: I realise that they were waiting for Parliament to do it – Justice Brooking explains it – and then Parliament did not do it so the judges did it under Order 18A or whatever it is; then Schutt challenged that and the validity of the order; then the court, by majority, held that it was valid; then there was an application to this Court for special leave. Has that just been stood over pending this challenge of the legislation?
MR JACKSON: It depends on the result of this case, your Honour. It has actually been discontinued, your Honour.
KIRBY J: I see. The special leave application has been discontinued.
MR JACKSON: Yes.
CALLINAN J: Mr Jackson, I know it is probably not for you, but I would very much like to get as soon as possible a copy of the statement of claim in the other proceedings.
MR JACKSON: Yes.
CALLINAN J: I think it certainly assists me to have it sooner rather than later. I know it is not for you but perhaps the second defendant ‑ ‑ ‑
MR JACKSON: Yes, your Honour. I will endeavour to get that done.
CALLINAN J: Thank you, Mr Jackson.
MR JACKSON: Your Honours, could I go for a moment to the provisions. In a sense the starting point, your Honours, is to be found in section 33ZB, which does two things. Your Honours will see that it says first that:
A judgment given in a group proceeding –
(a) must describe or otherwise identify the group members who will be affected by it; and
secondly, your Honours, it provides that the judgment in the group proceeding:
binds all persons who are such group members –
Your Honours, that does not, of course, prevent a group member later attempting to sue on a cause of action, but it would mean that the action would be doomed to failure because the cause of action would, of course, be merged in that judgment.
GUMMOW J: What about the opt‑out person? Would they have an Anshun estoppel problem if they sued?
MR JACKSON: I am sorry?
GUMMOW J: Would they have an Anshun estoppel problem if they had later sued, having themselves opted out of the earlier proceedings?
MR JACKSON: Your Honour, once they have opted out, I think the provision says that they are no longer treated as being a party to the proceeding, and it is possible that there would be a difficulty for them, but greater difficulty would be likely to arise in the case of a person who was a group member but had another claim that could have been brought in that proceeding but was not brought because that person was not conducting the proceeding.
Your Honours, if one goes back to the terms which give some meaning to 33ZB, a “group proceeding” is defined by section 33A to mean a proceeding which is properly commenced under Part 4A and a “group member” is defined by section 33A as meaning:
a member of a group of persons on whose behalf a group proceeding has been commenced;
Your Honours, the words “on behalf of” might suggest consent or acquiescence, but it would be erroneous because of the terms of section 33E(1) which says that:
the consent of a person –
except in specified circumstances –
to be a group member is not required.
If one goes then to 33C(1), your Honours will see that it provides that a group proceeding may be commenced by one or more of the persons referred to in section 33C(1), and your Honours will see that it requires first that:
seven or more persons have claims against the same person –
and the connecting factors are then referred to as being two. The first is that they must be:
in respect of, or arise out of, the same, similar or related circumstances;
and, secondly, they must:
give rise to a substantial common question of law or fact.
Could I interpolate that the meaning of the concept “substantial” in the similar phrase in the Federal Court of Australia Act was dealt with by this Court in Wong v Silkfield Pty Ltd (1999) 199 CLR 255. The relevant passage is at page 267 and your Honours will see in paragraph 28 in the middle of page 267, what was held, to put it shortly, was that all that was required was that the issues be “real or of substance” rather than “large” or “of special significance” or issues which would “have a major impact on the . . . litigation”, the latter view having been the one taken, it was held erroneously, by the Full Court in the Federal Court.
So that a potentially very broad range of claims is contemplated, having only the connections just adverted to. That the connections may be relatively tenuous appears from the matters that one can see in a number of the provisions of section 33C(2). In that regard your Honours will see that section 33C(2)(a)(iii) says:
(2) A group proceeding may be commenced –
(a) whether or not the relief sought . . .
(iii) includes claims for damages that would require individual assessment; or
(iv) is the same for each person represented; and –
then in subparagraph (b), whether or not separate contracts are involved and whether or not separate acts or omissions are involved in relation to different group members. Any of the persons who satisfies the description in section 33C(1) may start the proceedings. Your Honours will see that referred to in section 33D(1). There is no requirement that the other six or more persons either consent to the institution of the proceedings or have any prior knowledge of it. My learned friend has given me copies of the statement of claim. Can I give your Honours copies of that.
GLEESON CJ: Yes, thank you.
MR JACKSON: Perhaps if I can go to that statement of claim for a moment. Your Honours will see from it that in paragraph 1 there is the reference to the place of incorporation. Your Honours will see the description of the group members in paragraph 3 of the statement of claim as:
all persons . . . who:
(a) owned . . . (“aircraft”) . . .
which aircraft refueled with . . . fuel) released from the defendant (“Mobil”) at Yarraville in the State of Victoria (the “fuel”) as follows –
Then your Honours will see a reference to various parts of Australia in which the refuelling took place. Then your Honours will see there are breach of contract claims commencing at paragraph 6.
GLEESON CJ: So the allegation is that Mobil manufactured contaminated aviation fuel in Victoria and then supplied it at various places in Australia?
MR JACKSON: Yes, your Honour.
CALLINAN J: It is a products liability case.
MR JACKSON: Yes, your Honour. Product liability, in the broad sense, but the claims made are not just in tort.
CALLINAN J: Well, what other claims are there against Mobil, apart from products liability?
MR JACKSON: Your Honour, I am sorry, it is just a question of what one means by “product liability”, that is all.
CALLINAN J: I was thinking of Grant v Australian Knitting Mills. Is it that sort of claim, or is it ‑ ‑ ‑
MR JACKSON: Yes, your Honour. First of all, there is a contract claim for breach of contract in terms of the quality of the fuel. Then one goes to paragraph 18 at page 6: there is a Grant v Australian Knitting Mills type of claim.
KIRBY J: Just pausing in respect of the contract claim, in respect of supply to, say, a carrier in Western Australia, where would that contract be made? It could be made entirely within Western Australia, could it not?
MR JACKSON: It could be, your Honour, yes. Made and performed.
GUMMOW J: The term seems to be pleaded under section 19 of the Victorian Sale of Goods Act where the section seems to be in the Queensland Act.
CALLINAN J: Mr Jackson, I have only just seen this, but the contract claims – is there any reason at all why they could not be brought under the legislation? Because they are Victorian contracts, are they?
MR JACKSON: Your Honour, I do not think that is so ‑ ‑ ‑
CALLINAN J: Not so?
MR JACKSON: What your Honour will see is that in paragraph 6 – I am sorry. I should start a couple of paragraphs earlier. The connection with Victoria is referred to, really, in paragraph 3, and that is that the fuel was released by us from Yarraville in Victoria “as follows”. And then your Honour will see in capital paragraph X:
at Bankstown, Albury, Hay or Griffith in New South Wales; or Essendon or Moorabbin in Victoria –
Then other places referred to in Y and Z.
GUMMOW J: X, Y and Z qualify refuel, do they not? Not “released”. In other words, it does not make sense.
MR JACKSON: I am sorry, your Honour. Yes, refuelled at those places.
GLEESON CJ: The point you make appears, does it not, from the particulars to paragraph 9, which appear on the top of page 4. The contractual terms are implied under Victorian legislation, New South Wales legislation and Queensland legislation.
MR JACKSON: Yes.
GLEESON CJ: Which assumes that the proper law of the contract was at least on either Victoria or New South Wales or Queensland.
MR JACKSON: That is so, yes.
CALLINAN J: It is not your statement of claim, I know, but what meaning do we attribute to the word “released”? Does that mean that the refining was done there, or some manufacturing process, or did it pass through there? I know I should not really be asking you, Mr Jackson, it is not your statement of claim, but I am having trouble giving a meaning to the word “released”.
MR JACKSON: Well, your Honour, presumably, it is intended to say the Australian or principal Australian depot from which this fuel was provided around Australia was in Victoria and ‑ ‑ ‑
HAYNE J: Though there are then a lot of subsequent complaints about the refining process apparently undertaken at the Yarraville plant, see page 9, paragraph 23(b) and surrounding paragraphs.
MR JACKSON: Yes. Your Honour, so it really is saying the connection with Victoria is no doubt what was done in Victoria or done or not done in Victoria, that is what is said. Your Honour, it may well be that in relevant respects many of the claims, leaving aside the question altogether of service on us in Victoria, would be ones that would have a sufficient connection. But the point we are seeking to make, your Honours, is that the Act itself goes beyond that and provides no basis for reading down.
KIRBY J: Is that last statement to be taken to imply that your real case is that you cannot read down the statute? Are you suggesting that the statute in its entirety is constitutionally invalid because of the defects that you point to or is your real case that the statute should be read down, or was that the alternative way you put the matter?
MR JACKSON: No, I am sorry, your Honour. What we are saying is that it is outside power because it is too generally expressed and there is not a criterion provided by which it could be read down to be within power or perhaps too many possible criteria exist by which it could be read down.
Now, your Honours, I was dealing with the provisions of the legislation. The group must be described or otherwise identified that the members need not be named nor need the number of them be specified. Your Honours will see that from section 33H(3). Now, your Honours, there is a possibility of a group member opting out. A number of provisions deal with that. Could I go first to section 33J(1):
The Court must fix a date before which a group member may opt out of a group proceeding.
Your Honours, 33X(1)(a) then provides that:
Notice must be given to group members of the following matters in relation to a group proceeding –
(a) the commencement of the proceeding and the right of the group members to opt out of the proceeding before a specified date –
but that notice of a giving of such a notice can be dispensed with if the case is not one in which the claim is for damages. Your Honours will see that in of section 33X(2), so that it may be that there is no notice given at all in the case where no damages are claimed.
Your Honours, notices, prima facie, are not given individually. That appears from section 33Y(4) which says that:
The Court must not order that notice be given personally to each group member unless it is satisfied that it is reasonably practicable, an not unduly expensive, to do so.
But notice may be given via the media or otherwise. That is section 33Y(3)
Your Honours, the court may award an aggregate sum for damages. Your Honours will see that in section 33Z(1) and section 33Z(1)(f). The court is not to do that:
unless a reasonably accurate assessment can be made of the total amount to which group members will be entitled under the judgment.
That is provided for by 33Z(3). But the group member, “If the Court has made an award of damages”, may yet have to establish an entitlement to them. That is provided for by section 33Z(4).
Your Honours, the running of any limitation period is suspended until the claim is disposed of. That is provided for by section 33ZE(1). Could I come then to the remains, if I could put it that way, of what I was seeking to say about the first of our two points. I do not mean that in the sense of remnant but in the sense of what is remaining.
HAYNE J: You want to pick over the corpse, do you, Mr Jackson?
MR JACKSON: No, your Honour, I would rather examine the body but not unduly pore over the entrails.
GLEESON CJ: We are trying to discourage necrophilia.
MR JACKSON: Your Honours, the legislative power of Victoria is of course limited by a number of matters, subject, of course, to the constraints in the Constitution, some of which are the subject of exclusive Commonwealth power such as Commonwealth places or duties of Customs and Excise.
GLEESON CJ: Would the Parliament of Victoria have power to enact a law saying that nobody may sue Mobil as a result of claims arising out of contaminated aviation fuel produced at Yarraville?
MR JACKSON: In our submission, no, your Honour. It would have power, in our submission, to make a law saying no one may sue Mobil in Victoria because that would pick on – “pick on” I mean select, of course – select Mobil as someone in Victoria.
GLEESON CJ: Could it say, “No one may sue Mobil in respect of these claims after one year”? In other words, an act of special Limitations Act relating to the incident at Yarraville.
MR JACKSON: Your Honour, there seems no reason why it would not be able to do that or make a law dealing with the position of Mobil as a law applicable in Victoria. Now, the extent to which that law would be one applying in other jurisdictions would be a question for section 118 and it would be likely, in our submission, to be given effect, bearing in mind the approach taken by the Court in John Pfeiffer v Rogerson. Importantly, we submit, as I submitted earlier, the State is one of a number of States in the Federation, each of which has a similar legislative power and the existence of some limitations by virtue of the fact that one is talking about States in a Federation is adverted to in the three references in the decisions of the Court which we have given: your Honours will see in our written submissions, page 34 of the demurrer book, paragraphs 25 to 27. I will not take your Honours to the cases. Those references extract the relevant parts of it. There are, in our submissions, and would necessarily ‑ ‑ ‑
KIRBY J: Could I ask whether we are being referred to the offshore fisheries cases and the taxation cases and I think in the second respondent’s submission they classify them in three major categories?
MR JACKSON: Yes.
KIRBY J: Have there been cases where extraterritorial legislation of a State, vis-à-vis another State, has been struck down as beyond the power of State aid?
MR JACKSON: I think the answer is no, your Honour. I do not think the issue ‑ ‑ ‑
KIRBY J: The court has always said it is a very large power, it is very broad, but it has implied that there is a limit and I think you give the instance of the Parliament of Victoria enacting a law which dealt only with a traffic infringement on the streets of Brisbane connected only by the fact that the car was manufactured in Victoria.
MR JACKSON: Yes, or ‑ ‑ ‑
KIRBY J: Now, one would infer that there is a limitation. The question is: is the court, apart from saying it is very difficult and it is very broad, given any real clue as to what is the deciding point for the cut‑off point of power?
MR JACKSON: Your Honour, if one went to the various provisions of the Constitution, statutes of the States, they really say, in effect, what the limit is. What I mean by that is that if one took, for example, the provision in relation to Victoria, it says in section 16 of the Constitution Act, there is “power to make laws in and for Victoria”. Now, “for Victoria”, of course, is a wide concept but it is very difficult indeed to say that a law dealing with the side of the road on which cars should drive in Queensland is a law that one could describe as a law for Victoria.
KIRBY J: Yes, but in this case, if we come down to practicalities in this case, there is a connection and the statute postulates, I would think, some connection with the State of Victoria and, therefore, you are really in the realm of overreach. You have to really say that it has validity in so far as it applies only to Victorian matters but, in so far as it goes beyond that, it reaches into the forbidden territory of the Constitution.
MR JACKSON: Your Honour, what we say is really two things, really, in a sense, an expansion of what your Honour was putting to me then. What we say is that there is no doubt that some of the areas covered by the statutory provisions are ones in relation to which Victoria could legislate. But the difficulty is that no indication is provided by the statute as to the matters which are to - I am sorry, I am putting that badly. We would say it goes beyond the matters that could be matters that are laws for Victoria. Now, in doing that, it includes, of course, some matters that could be, but it is difficult, and in our submission, impossible, to identify, if one looks at the provisions, the test which would indicate which matters are and which matters are not within legislative power. In other words, the whole thing is too broad.
KIRBY J: But in a sense, that is merely putting back to us the proposition that you are asserting, it is saying in a characterisation sense, “You will not characterise it. Why won’t you characterise it as a law with respect to Victoria?” You do not identify what the desideratum is.
MR JACKSON: Your Honour, I can really only do it, I suppose, in a sense, by saying that aspects of it, in dealing with persons who are not residents in Victoria, who are persons who do not wish to bring proceedings in Victoria or be part of proceedings in Victoria, end up being either bound by the decision or having to take steps to exclude them, get themselves excluded from the provisions of the enactment.
GLEESON CJ: What is the provision of the Victorian statute that determines the scope of the jurisdiction of the Supreme Court of Victoria?
MR JACKSON: Apart from the particular ‑ yes, section 85, your Honour.
GLEESON CJ: Section 85.
MR JACKSON: Section 85(1) of the Constitution Act, which says that the Supreme Court has:
jurisdiction in or in relation to Victoria . . . in all matters whatsoever ‑ ‑ ‑
GLEESON CJ: What is the provision of the statute that deals with the actions that may be commenced in the Supreme Court of Victoria? Presumably personal service is one basis of jurisdiction, but is there a “long arm” jurisdiction, for example?
MR JACKSON: Your Honour, it is dealt with in two ways and I need to say something about the history of it. Before the Service and Execution of Process Act 1992, the provisions of, I think, then Order 10 of the Victorian Supreme Court Rules provided for service out of the jurisdiction and the usual category of cases where there might be service out of the jurisdiction was provided for. Your Honour, when the Service and Execution of Process Act provisions came in, the result was that apart from renumbering of that rule to be rule 7, it was then altered somewhat in content, but so that it applied only to service outside Australia, service inside Australia being dealt with by the Service and Execution of Process Act.
GLEESON CJ: Service on people within the jurisdiction meant, did it, service on people found within the jurisdiction at the time of service?
MR JACKSON: Yes.
GLEESON CJ: So a resident of New South Wales who was found at Melbourne Airport would be served within the jurisdiction?
MR JACKSON: Yes.
GLEESON CJ: And that would be a basis of the jurisdiction of the Supreme Court of Victoria?
MR JACKSON: Yes. In personal actions, yes, your Honour.
GUMMOW J: The Part 4A of the Supreme Court Act is an example, I think, of the operation of 85(4) of the Constitution Act.
MR JACKSON: Yes, but, your Honour, only in respect of a costs aspect. I think your Honour is referring to the provision of section 15 of the amending Act.
GUMMOW J: No, 85(4) of the Constitution Act. You have taken us to 85.
MR JACKSON: Yes. I am sorry, your Honour, I was thinking of the provision of subsection (5). Possibly so, your Honour, yes. Either it is section 85(1) or, if it goes beyond section 85(1), then it is section 85(4), but the question in either event would be the validity of the law.
GUMMOW J: Which law though? I am just puzzled at the moment at the interrelation between the Constitution Act and the Supreme Court Act and whether one controls the other in any way as a matter of internal Victorian constitutional law, as it were.
MR JACKSON: Your Honour, I suppose the starting point, in a sense, is to be found in ‑ and one always has the difficulty, of course, with McCawley’s Case in relation to the State Constitutions ‑ ‑ ‑
GUMMOW J: Yes, that is right.
MR JACKSON: ‑ ‑ ‑ but one sees section 16 which says that:
The Parliament shall have power to make laws in and for Victoria in cases whatsoever.
As a matter of construction of the Constitution Act, in our submission, one has to read the various provisions together. Undoubtedly, section 85(4) says “This Act”, which would apply both to section 16 and section 85(1):
does not limit or affect the power of the Parliament to confer additional jurisdiction or powers on the Court.
So that, your Honour, perhaps one really goes, in a sense, dehors the Act and says, “What powers does the Parliament have as Parliament of a State?” If it amends the terms of the Constitution Act by force of later inconsistent legislation, then so be it, but the question of the power to do so comes ultimately from section 106.
GUMMOW J: Yes.
KIRBY J: You told me that there is no case you can point to in which this Court has in a sense struck down a State statute as overreaching, but the written submissions say that in Canada and the United States there have been such cases. Is the foundation for the differentiation in the text of our Constitution or simply in a different approach to the territorial limitation of the States and provinces? If you can deal with that at some time, I would be interested to know why our constitutional elaboration took a different course to that of Canada and the United States if it did.
MR JACKSON: Your Honour, may I deal with that a little later and endeavour to give your Honour a reasonable answer to it. What we would submit is that when one goes to the federal system, one sees that each State may, of course subject to the laws of the Commonwealth, decide what laws are to apply within the State. Each State may decide what consequences to apply to conduct or events which have a connection with the State and each State may decide in what circumstances its courts may be called on to adjudicate claims. It can create new courts and give them particular jurisdiction in particular circumstances but what it cannot, in our submission, do is to say to persons not themselves in the jurisdiction and who have claims the subject matter of which has no connection with the jurisdiction, “Your claim is decided in this court unless you opt out in time or unless the court exercises its discretion to allow you out”.
KIRBY J: You say it has no connection with the jurisdiction but that begs the very question which really has to be determined, because it has this connection, that the defendant is within the jurisdiction, the petrol was manufactured or the defect arose, and some other parties – the distribution began. The failure of checks are alleged to have occurred. Some parties are within that jurisdiction.
MR JACKSON: Your Honour, if it be that the Act was framed in a way which made any one of those things a discrimen, so be it.
GLEESON CJ: That is why you reject the reading‑down approach. If anybody read this down, they would be reading it down to a case like this.
MR JACKSON: Your Honour, there would be no doubt one would seek to read it down by reference to “connections with the jurisdiction”, as the Court did in a different context – I do not mean reading down – in Lipohar to see whether South Australia had jurisdiction to entertain a case dealing with a common law conspiracy directed against a South Australian company.
What we seek to say in a sense is what is set out in paragraph 30 of our written submissions at page 36. No doubt in an appropriate case the Victorian court would apply the laws of another State in relation to some – perhaps all – of the group if the case had connection with another jurisdiction but it may not ever become aware that there was any circumstance requiring it to do so. Could we refer also to what we have set out in paragraphs 31 to 33 of our written submissions. I think I have already dealt with the substance of those.
Your Honours, could I come back to a matter raised by your Honour Justice Hayne – and I do not think I quite finished, really, what I wanted to say in relation to it. It relates to a suggestion raised in our learned friends’ submissions that the law is within power because it is dealing with courts in Victoria and courts entertaining cases in Victoria, and that is sufficient. Your Honours, so, too, on that basis – if I could go back to Omaha for a moment – would laws saying that an Omaha rancher might sue his Omaha neighbours for cattle trespass in Victoria, without there being any further connection of the matter with Victoria.
HAYNE J: With or without provisions for service, whether long‑arm or personal?
MR JACKSON: Without provisions for service, your Honour.
HAYNE J: Because the provisions with which we are now concerned assume, do they not, the existence and operation of the present provisions regulating service of the process?
MR JACKSON: They do, your Honour. I accept that.
HAYNE J: True, it is, 33C focuses on commencement, but the part as a whole is concerned with commencement and conduct, the necessary step in which is service on the defendant, whether personally within or under the existing long‑arm rules.
MR JACKSON: Yes, your Honour, but ‑ ‑ ‑
HAYNE J: And the connection, if it be a connection, between defendant and the jurisdiction, is found in the circumstances regulating service upon the defendant, are they not?
MR JACKSON: Your Honour, I accept that. However, what one sees in the legislation is this: that the legislation does not just deal with cases where one person, for example, or a number of people, seek to have the court in Victoria exercise jurisdiction that is attracted by service upon the defendant. Undoubtedly, there has to be some form of service to get the proceedings off the ground. The point of complaint really relates to the position of the other party, the other plaintiffs. The jurisdiction of the courts attract – it is the other person.
HAYNE J: And you, on behalf of the defendant to the suit, invite, most helpfully, attention to the difficulties created for the plaintiffs against you.
MR JACKSON: We do so, your Honour. The model litigant, as it were.
HAYNE J: And you say, most importantly, that the connection that your client has with the jurisdiction, of itself, is insufficient.
MR JACKSON: If individuals were to sue us, or sue us in Victoria, or any other place they could sue us, so be it. We would prefer to have litigation which proceeds on the basis of identified parties. It may be a traditional view, your Honour, but it is a view. I would just like to say one other thing, and that is in relation to the question of severance. I have referred already to that on a number of occasions, your Honours. Could we refer to paragraphs 36 and 37 of our written submissions, at pages 38 and 39.
A particular point I seek to make is simply this, in relation to paragraph 36. There are undoubtedly discretions in the Supreme Court which may have the result that a person does not participate, in the end, in the proceedings. But the fact that the scheme is one which gives the court a discretion to allow people out, as it were, does not mean that one can treat it as valid because it does just that. Your Honours, could I come then to the second argument which we seek to advance; that is the one that is referred to in our written submissions, paragraphs 38 and following, at page 37. That is the question of inconsistency with judicial power.
Now, your Honours, could I start with section 73 of the Commonwealth Constitution. Under section 73 this Court has jurisdiction to entertain appeals, “from all” - your Honours, it uses the word “all” -“judgments, decrees, orders and sentences” of the Supreme Court of each State. Your Honours, it is clear, if one goes to part 4A of the State enactment, from section 33ZB(b) and also from section 33Z(1) that the legislature intended the decision in a group proceeding to be a judgment. It uses the term specifically in those two provisions and in ZB(b), speaks of it being a judgment binding all persons, et cetera.
The subject matter being dealt with by the Supreme Court in respect of some members of the group, may be a subject in relation to which there is no controversy at all. The court engages in the matter because someone else has brought a similar case.
GLEESON CJ: You do not need a controversy for a matter, do you?
MR JACKSON: Your Honour, for something to be a – if one is speaking about “matter” in terms of, for example, section 75 or 76, the matter is the subject matter for decision but, your Honour, when one speaks of it in that way and uses the expression “for decision”, that contemplates that there is something which is a controversy which in one way or another is to be determined. Your Honour, section 73 is concerned with exercises of power which involve actual controversies, can be seen adverted to in the remarks of the members of the Court in Mellifont v Attorney‑General (Queensland) (1991) 173 CLR 289.
GLEESON CJ: You are not going to have an appeal unless there is a controversy, are you?
MR JACKSON: No, I appreciate that, your Honour. Your Honours, at page 304, the Court was dealing with the issue whether answers given to questions raised arising from criminal proceedings amounted to, “judgments, decrees, orders in s. 73.” Your Honours will see that referred to in the first new paragraph on page 304, and there is a discussion of that issue. When one comes to page 305, your Honours will see, commencing at the third line:
The Crown sough the reference in order to establish that the trial judge’s ruling was wrong in various respects. In this situation, the decision on the reference was made with respect to a “matter” which was the subject-matter of the legal proceedings at first instance and was not divorced from the ordinary administration of the law. The decision is therefore to be distinguished from . . . in In re Judiciary and Navigation Acts. That opinion was academic, in response to an abstract question, and hypothetical in the sense that it was unrelated to any actual controversy between parties.
Now, your Honours, what one sees is that there is, where the type of matter is one apposite to litigation inter partes, the concept of actual controversy between parties.
CALLINAN J: Mr Jackson, nonetheless, the Court decided that notwithstanding that the controversy was over, as between parties, this Court could entertain the appeal.
MR JACKSON: Yes, your Honour. It was almost over in the sense that your Honour will see, I think, in the statement of facts at the start of the report of the judgment there is a reference to the fact that notice had been given that it was proposed to put him up again, as it were, and that was ‑ ‑ ‑
CALLINAN J: Yes, that is right. I think the defendant wanted an acquittal but that was not, in fact, given. Perhaps it was a nolle, was it not?
MR JACKSON: Yes, I think it – your Honour, I was not concerned with the further conduct of it.
CALLINAN J: No.
MR JACKSON: I am sorry, the first one is. The first one did not proceed to any form of verdict one way or the other and that was why the proceedings remained alive and a question that arose was whether the hearing was something that followed from the first trial or was related to the possible second trial.
So what we would seek to submit is that one has a situation where what is treated as a judgment of the Supreme Court is, in our submission, something which involves or goes beyond any actual controversy, and in those circumstances ‑ ‑ ‑
HAYNE J: I do not understand that, Mr Jackson. In what sense does it go beyond any actual controversy?
MR JACKSON: Your Honour, I am speaking of those persons who do not wish to be parties to the proceedings or do not know of the proceedings and are persons who are bound by the decision, bound by the decision although they, themselves, have no present controversy with the defendant.
HAYNE J: Would it be accurate to describe that circumstance as being the circumstance that there are some issues or aspects of issues raised in the proceeding that are not controverted actually?
MR JACKSON: It would go beyond that, your Honour, because what you would have would be persons who may have, in a sense, claims against the defendant but they are persons who, for example, did not become aware of the proceedings. They are bound by the decision. The decision takes the form of it being a judgment. At the time when the proceedings were started or at the time when the decision was given they had a “no desire” at that point to institute proceedings.
GLEESON CJ: In proceedings in equity relating to the construction of a trust can unborn people be bound by that decision?
MR JACKSON: Your Honour, yes, they can but at that point, when born, they are persons who take under an instrument as construed, no doubt. If some later question arose about the construction of it, then they may be bound by those who at an earlier point ‑ ‑ ‑
GLEESON CJ: Represented them.
MR JACKSON: Well, represented them, your Honour, in the sense that they in a sense take through them.
KIRBY J: What is the difference? Is it that under the Act these people are made parties or - are they made parties under the Act? There is ‑ ‑ ‑
MR JACKSON: I am sorry, your Honour, I did not mean to interrupt you. The word “party”, your Honour, is not used in relation to them. They seem to be described as group members, the relevant party being the one or more persons who are the plaintiff and then the defendant, but they are - that is why the section to which I adverted before, section 33ZB uses the expression in paragraph (b), the judgment:
subject to section 33KA, binds all persons who are such group members ‑ ‑ ‑
HAYNE J: Can an order for costs be made against the group as a whole or can an order for costs be made only against the named persons who sue on behalf of the group?
MR JACKSON: The person who is plaintiff is the person who is liable for costs. The other persons are not liable for costs except to the extent to which a particular person, I think, your Honour, has been appointed to deal with an aspect of the case on their behalf. Section 33ZD are the provisions. Yes, your Honour will see 33ZD and then the qualification provided for by Q and R.
KIRBY J: Does that not mean that the group members, other than the actual plaintiffs, only stand to make a benefit under the group proceedings and not say that they lose any separate personal right by a final judgment that they might have wished to pursue? They cannot be worse off; they can only be better off.
MR JACKSON: Well, your Honour, that depends, of course, how the proceedings are conducted. What they lose is what one would normally have and that is the ability to conduct one’s own proceedings.
KIRBY J: Yes, but in the real world often such people will not have the means to commence them individually.
MR JACKSON: Well, your Honour, sometimes that is so, sometimes not, and sometimes persons are able to be assisted in the way they do it, but what I would seek to say about it is that the ability to conduct one’s own proceedings, even if one joins up with others in doing it in the end, is something that is a valuable right.
KIRBY J: I just did not understand what you got out of Mellifont which seemed to be against you in so far as it permitted an appeal from a decision which was, in a sense, an advisory opinion and therefore contradicts the notion that you can only appeal in the system against the ‑ ‑ ‑
MR JACKSON: I am sorry, your Honour, what I was seeking to get out of it was that one sees in the phrase to which I adverted at page 305, I think it was, where the In Re Judiciary and Navigation Acts provision or the situation was said to be academic in the sense that it was unrelated to any actual controversy between the parties. Now, your Honours, in Mellifont’s Case, it is right to say that there was an extension of the range of cases which would be treated as not academic. However, in the existence of the distinction…..application was maintained and what one sees in Mellifont is that the reason why it was regarded as being not academic was because of the possibility and the probability of, on the one hand, future proceedings between the same parties and, on the other hand, the existence of the earlier proceedings between the same parties.
GLEESON CJ: The effect you must be talking of is a direct legal effect. This Court regularly gives decisions in controversies between A and B that affect all manner of people who are not parties to the controversy.
MR JACKSON: Yes, your Honour, yes, of course, and, your Honour, I am speaking of that.
KIRBY J: I know that Wong was a case in federal jurisdiction and in the Federal Court, but can the decision of the court in that case stand with the propositions you are urging in that the group proceedings there, the federal legislation, really contemplated a similar reach of the federal law to persons who were not themselves parties to the controversy, and yet they are roped in? I do not remember whether the constitutionality was challenged in Wong.
MR JACKSON: No, it was not, your Honour, no. Wong v Silkfield was a pure case of construction on the provisions.
KIRBY J: But if your, as it were, more fundamental point which goes to the constitutionality of the lack of a matter or of a controversy is right, then Wong was wrongly decided because the legislation is invalid in federal jurisdiction as much as in State jurisdictions.
MR JACKSON: Well, your Honour, that may well be. We will just have to check, but I think there may be a distinction between the opting‑out provisions in the two, but may I check that? Your Honour, if they are the same, what your Honour says is right. I would not put it that Wong was wrong, what I would submit is that the issue did not arise in Wong. Your Honours, those are our submissions.
GLEESON CJ: Yes, thank you, Mr Jackson.
CALLINAN J: Mr Jackson, just before you sit down, can I ask you one question, and it arises out of 33F, which provides that “a person under disability may only take a step” with a “litigation guardian”, although “a person under disability” may be a member of “the group”. What about a person under a disability in another State, and bearing in mind also that section 33F(2) is put in very broad terms, “a person under disability” cannot “conduct part of the proceeding” without a “litigation guardian”, however, the court may embark upon a “group proceeding” even though individual assessments of damages may be required? Now, what about a person under a disability in another State whose damages would required individual assessment? Does that give rise to any problem?
MR JACKSON: Your Honour, one would need to check, and we will endeavour to do so, whether that phrase, “litigation guardian”, is defined for the purposes of the Act in such a way as to include persons from other States. It is possible, too, that legislation dealing with persons under disability may provide for a form of recognition. But subject to that, your Honour, it ‑ ‑ ‑
CALLINAN J: It tends to throw up, in a sense, a possible complication, an interstate complication, does it not?
MR JACKSON: Your Honour, there is a number of complications. One might have significant difficulty in a particular case with the operation of the provision suspending the limitation periods.
CALLINAN J: That was the other one I was going to mention also, particularly as it is now established in this Court that it is a matter of substantive law.
MR JACKSON: Your Honour, it is very difficult, with respect, to see how that provision can stand with section 118.
KIRBY J: Mr Jackson, you ‑ ‑ ‑
MR JACKSON: Sorry, your Honour. May I endeavour to give your Honour an answer to the other question, having looked at the material?
CALLINAN J: Yes.
KIRBY J: You have not mentioned in your oral submissions what might be called your Kable argument or your Pfeiffer argument. Does that mean that with your usual discernment you have abandoned the hearse or are we to be troubled by them or not? I think we ought to know whether they are seriously proposed ‑ ‑ ‑
MR JACKSON: As to the Kable argument, we have been given what, in the American detective stories, is sometimes called a “bum rap” by the submissions on the other side.
KIRBY J: I do not know that expression.
MR JACKSON: Your Honours will see the submission that we make on that issue as being one, which I think goes from pages 39 of the book to page 41, and that is the subject on which I really last addressed. That is the Kable argument, if one likes to call it that, but that is a name rather than anything else.
GUMMOW J: Can you just recapitulate what your submission was about section 73?
MR JACKSON: Yes, your Honour. What we would say is this: what is provided for by section 73 is that in all cases there is an ability, subject of course to there being special leave and so on, provided for by the Constitution to appeal to this Court from judgments, to put it shortly, of any Supreme Court.
GUMMOW J: Yes. Now, you say, do you, these sections in the State Act use the word “judgment” but they do not use it in the constitutional sense?
MR JACKSON: Yes, I say that, your Honour. What I would seek to say about it is this: it is plain that the legislation is seeking to give the decisions the status of judgments of the Supreme Court. However, they do not have the status of judgments of the Supreme Court in terms of section 73 because of the absence of a controversy, to put it shortly, and we would seek to say from that that it is, ultra vires, a State to treat as judgments of the Supreme Court decisions, to put it neutrally, which are in incapable of being the subject of appeal to this Court, decisions which purport to bind people as judgments of a court.
CALLINAN J: Mr Jackson, in relation to that, what about 33KA, an order of the Victorian Supreme Court of its own motion doing something? Does that give rise to a judgment, albeit perhaps only an interlocutory judgment, but nonetheless a judgment which could be taken on appeal under section 73? Anything that a court does of its own motion, does that involve a judgment of a constitutional kind, if I could put it that way?
MR JACKSON: I am sorry to be hesitating about it, but it must depend a bit on the subject matter of what is being done. Many things that may be done by the court of its own motion would be regarded as purely administrative matters not giving rise to a section 73 judgment decision.
GUMMOW J: Is that not what Holmes v Angwin decided, all those years ago?
MR JACKSON: Yes, I think it did, your Honour, but ‑ ‑ ‑
GUMMOW J: I think that arose in section 73 terms, did it not?
MR JACKSON: Yes.
GUMMOW J: I may be wrong.
MR JACKSON: Your Honour, one does see, however – if one took, for example ‑ ‑ ‑
GUMMOW J: It was not said in Holmes v Angwin that the State law was invalid, just that there was no appeal.
MR JACKSON: Your Honour, what we would say about it, though, is that in a case like this what you have is something that is clearly intended to be the subject matter of judicial decisions, affecting rights, and the State law, in purporting to give it that character, is one which goes outside the State’s power, because of the concept in section 73. If there is no appeal, then one has a situation where one could not treat it as a judgment, and the provision of the sections of the Act saying, there is to be a judgment binding on the parties, is a provision which is, I suppose, either invalid, or, if not invalid, it is inefficacious and valid by construction, as it were.
If I could just return to what your Honour Justice Callinan was putting to me about section 33KA(1). The decision that a person not be a group member would seem to be a decision which partakes of the nature of an interlocutory decision, which, prima facie, then, would be something in relation to which section 73 could operate, although it may well be that leave to appeal would never be given, of course.
CALLINAN J: I appreciate that, but a decision by a court of its own motion, not dealing with an issue in controversy between the parties. Is not anything that the court does of its own motion something that does not relate to a controversy between the parties? The parties have not moved for that relief; the court does. Why is that an inter partes controversy?
MR JACKSON: Well, your Honour, in the ordinary course of events, the actual decision may not be, but it may, in some cases, be regarded as an interlocutory part of a larger controversy. Now, if one took, for example, the case where a Justice of this Court directed that a matter started in the Court be remitted to another court. The Court can do that of its own motion. It does it not infrequently, sometimes against the wishes of ‑ ‑ ‑
CALLINAN J: Both parties.
MR JACKSON: ‑ ‑ ‑ all the parties, and sometimes without hearing a word about it.
KIRBY J: It is still part of the controversy. It is the way of resolving the controversy, inimical to them both.
MR JACKSON: It is part of resolving the controversy, and the point I was seeking to make, your Honour, is it is very difficult to say, across the board, in all cases, where the court does something of its own motion, that the decision that is given is not one that would satisfy section 73. Sometimes it will, sometimes it will not.
GLEESON CJ: Now, Mr Jackson, in relation to Kable, so that we can be clear about it, is your position that, although your passing reference to Kable in your written submissions appears to have caused some fluttering in the dovecotes, your argument does not depend upon an application of that case?
MR JACKSON: That is so, your Honour. Your Honours will see in our reply that what we said about it was contained in paragraphs 15 and 16 at pages 89 and 90 and the substantive argument that we seek to advance is the argument that I sought to advance orally and referred your Honours to the various paragraphs in our written submissions dealing with that.
KIRBY J: Does the same apply to your Pfeiffer argument?
MR JACKSON: Your Honour, I thought I would mention, with respect, the Pfeiffer – I had not referred to the particular paragraph. I thought I had really dealt with that in my oral submissions when I was dealing with the circumstances where contracts might be made in other jurisdictions and the law applicable to particular cases being the law of a jurisdiction other than Victoria or wherever it might be.
KIRBY J: It was unelaborated but it may be that all you want to say is in your written submissions.
MR JACKSON: In a sense it is, your Honour. We say that the law that relates to a particular transaction may well be the law of some jurisdiction other than the jurisdiction, say of Victoria, in this case and in those circumstances, whilst in an appropriate case where it is known the Victorian court would apply the law of the other place, first of all, in many cases, it may not be aware because of the nature of the proceedings that the other law is the relevant law but, secondly, the terms by which jurisdiction is conferred and the substantive law in other jurisdictions will offer a choice, in effect, to a plaintiff and the effect of the Victorian provisions is effectively to take away that choice.
GUMMOW J: But it comes to this though, Mr Jackson: the court does not rummage around to find choice of law problems; someone pleads them. I think what you are saying is that the silent party, as it were – the group member who does not know about it – if the group member had known about it, might have wished to plead some foreign law - using “foreign” to mean not the law of the forum - which would assist its case as a plaintiff but it loses that opportunity.
MR JACKSON: Yes. Your Honour, we refer to that in our submission in reply at page 88, paragraph 11 and the ‑ ‑ ‑
GUMMOW J: Otherwise one assumes it is the law of the forum. It is simple.
MR JACKSON: Yes. It is an issue that has to be raised. It may never be raised.
GUMMOW J: But in some way it may prejudice the party who would have raised it.
MR JACKSON: Yes, your Honour.
KIRBY J: You will not forget my request for assistance in relation to United States and Canadian – I am not asking for it now, but the States are all here lined up against your poor corporation and with enthusiasm have embraced the notion of the validity of the legislation, but at least for my part I would like to explore the limit because, though whilst they might be enthusiastic for this legislation, it has to be tested against what happens if jurisdiction is given in the extreme case of the motor accident in Brisbane with only a very tenuous connection with another State’s court. I think it has to be conceded that this Court, whilst accepting that there is some territorial limit, has not really made it very clear as to where the boundary of that limit is. Apparently in Canada and the United States they have marked out quite a firm boundary but no one seems to want to, as it were, protect their territory and yet it may be an important question behind this case, even if you lose, that it is an important issue that we ought to examine.
MR JACKSON: Your Honours, we will endeavour ‑ ‑ ‑
KIRBY J: - - - in this case, even if you lose, that it is an important issue that we ought to examine.
MR JACKSON: Your Honour, we will endeavour to do that.
GLEESON CJ: Yes, Mr Jackson. Mr Solicitor for Victoria.
MR GRAHAM: May it please the Court, before going into our oral submissions, may I just tidy up one small point in relation to the terms of Part 4 of the Supreme Court Act 1986 as it would be in the form before this Court.
There has been one very minor amendment to Part 4 since the reprint, which your Honours will probably have. The amendment is to section 33G which, as originally enacted, unwittingly referred to a “representative proceeding”, inconsistently with the terminology otherwise used in Part 4. That has been corrected ‑ ‑ ‑
GUMMOW J: We have Reprint No 4.
KIRBY J: Our reprint says, “group proceeding”.
MR GRAHAM: I do not take the Court’s time up with something that may have been rectified in that reprint. Yes it has been. If the Court pleases, we will seek largely to rely upon our written submissions, make some submissions in response to the plaintiff’s submissions in reply and to my learned friend’s submissions this morning, and deal with any particular matters which may be raised by members of the Court.
CALLINAN J: Mr Graham, could I ask you a question about 33KA(2) before you start. I just wonder why the reference there is to a “connection with Australia” rather than a connection with Victoria. That would be unnecessarily far reaching.
MR GRAHAM: Probably, your Honour, with an eye to the advantages conferred upon a plaintiff or judgment creditor by the Service and Execution of Process Act, which may not be available in the case of international litigation.
CALLINAN J: Why should the Supreme Court of Victoria have these powers, by reference to a connection with Australia rather than with Victoria?
MR GRAHAM: I think for no better reason than I have advanced, your Honour. It may have been put in ‑ ‑ ‑
GLEESON CJ: It was not copied from the federal legislation, was it?
MR GRAHAM: I beg your Honour’s pardon?
GLEESON CJ: That was not copied from the federal ‑ ‑ ‑
MR GRAHAM: No it was not, your Honour. It was a response to an argument advanced before the Court of Appeal in Victoria, the argument having been put in terms that subsection (2)(a) responds to. What your Honour Justice Callinan says is that it might have been more apt to have spoken of a connection with Victoria rather than with Australia.
CALLINAN J: Why should Victoria be entitled to confer a jurisdiction upon its courts by reference to a connection with Australia and not Victoria?
HAYNE J: Well, does it?
CALLINAN J: At the moment I am not convinced that Service and Execution of Process Act or its successor should be determinative of that, or should provide a basis for that.
HAYNE J: Does it confer a jurisdiction by reference to Australia?
MR GRAHAM: Subsection (2) does not, your Honour, no.
HAYNE J: Or at all?
MR GRAHAM: No, your Honour.
HAYNE J: Jurisdiction is confined, I would have thought, by the service provisions.
MR GRAHAM: By the jurisdiction of the Supreme Court over subject matter or parties.
HAYNE J: Just so, to whose resort anyone may go.
MR GRAHAM: Yes. In further answer to your Honour Justice Callinan, of course the “person” referred to in subsection (2) is a group member, a claimant, not to a defendant, because the power in subsection (1) is confirmed to the exclusion of persons from the group, that is to say, plaintiffs or claimants, so that the exclusion would relate to plaintiffs or claimants, not to anybody else.
CALLINAN J: What Justice Hayne has said is probably an answer anyway.
MR GRAHAM: Yes.
GLEESON CJ: There seems to be a degree of overlap between sections 33KA and 33N.
MR GRAHAM: Yes, there is, your Honour.
GLEESON CJ: But the explanation may be, as you said earlier, 33KA(2) was a response to something that was mentioned in earlier litigation.
MR GRAHAM: Yes. I perhaps might just pause to say that the numbering and lettering of these provisions was designedly in accordance with the same provisions in Part IVA of the Federal Court legislation and one can detect that there is a departure by reason of the numbering of section 33KA.
GLEESON CJ: It might have been thought that at least some of what is covered by 33KA(2) was already covered by 33N.
MR GRAHAM: Yes, your Honour. We would invite the Court to follow, with respect, the following basic approach to Part 4A. We say it confers powers upon the Supreme Court designed to enhance its ability to do justice, just as is the case with the Federal Court equivalent. Despite what appears particularly in the written submissions of Mobil, we say that questions concerning the validity of Part 4A and of the several provisions which comprise it should not be approached on the basis that the powers which it confers might be misused or abused or used in excess of constitutional power.
The fact that a power conferred by legislature may be used in a manner which is not authorised or which lies outside the competence of the relevant legislature, in our submission, does not render the grant of the power invalid. If I could content myself with a brief reference to one of the few authorities to which I desire to refer, in the Court of Appeal in Schutt Flying Academy v Mobil (1971) VR 545, which is No 6 on our list ‑ ‑ ‑
GLEESON CJ: Could you give that citation again please?
MR GRAHAM: I am sorry, your Honour, yes, (2001) 1 VR 545. That is part of the new series of the Victorian Reports commencing, as some might say, upon the beginning of the new millennium. At page 564, Justice of Appeal Phillips, in agreeing with Justice Ormiston, said this, and I will just read a short passage:
In many respects the argument which was presented to us on behalf of the defendant turned on what might one day be attempted (whether soundly based or not) in purported reliance upon O 18A, as distinct from what the new rules, in terms, do authorise or require.
His Honour gives an example:
a general rule conferring a power of amendment is not invalid because an amendment is attempted going beyond what may lawfully be done in a particular case. The rule will be presumed, very properly, to authorise only that which is within power. The rule will not be then invalid, only its purported application. That distinction was to my mind often ignored in the defendant’s argument.
That observation still seems to apply, with respect to our opponents, in the present litigation. We say that questions concerning possible overreach of the legislation extraterritorially, and possible adverse effects upon the rights or claims or interests of group members resident outside Victoria do not lead to the conclusion that Part 4A is invalid. We would respectfully say that the solicitude of Mobil for the interest of such claimants is notable but misplaced.
We say there can be no doubt about the fact that the Supreme Court of Victoria has jurisdiction over claims wherever arising if the defendant is subject to the court’s jurisdiction. Mobil accepts that in its submissions, paragraph 11.
GUMMOW J: If one just looks at page of the demurrer book which is the relief claimed here by Mobil, the second prayer has two parts to it, a declaration that 33ZK is “invalid in its application to” specified “proceeding”.
GLEESON CJ: That has gone out, has it not?
MR GRAHAM: That has gone out, your Honour.
GUMMOW J: That is gone?
MR GRAHAM: Yes.
GUMMOW J: But is that not the issue that would have to be tendered to accommodate what you say about power and validity? In other words, their complaint would really have to be, in this particular case and these particular proceedings, the power has been exceeded but the power itself is valid?
MR GRAHAM: In part, your Honour, but 33ZK was, in effect, a retrospective proceeding to make Part 4A apply to proceedings commenced under Order 18A.
GUMMOW J: Yes, but what I am trying to get at is, on your submission, there is nothing here for a demurrer. We have no subject matter of a demurrer really because the complaint, if there is to be a complaint, is a different sort of complaint. It is not a complaint about anything being invalid in terms of any legislation being invalid. The proper complaint, you are saying, would merely have to be that in some particular case, and Mobil would say this case, the power has been exceeded.
MR GRAHAM: Yes, your Honour, if one could imagine perhaps not even the facts of this case being adapted, but a case wholly outside Victoria so far as plaintiff and defendant and group members were concerned not falling within Order 7 of the Supreme Court Rules of the State of Victoria, therefore no jurisdiction and any attempt to bring that case before the Supreme Court must fail.
KIRBY J: But would that not leave the complaint that what is invalid is the law of Victoria that permits this to happen?
GUMMOW J: But the law has not permitted it.
MR GRAHAM: But the law does not permit it to happen, your Honour.
GUMMOW J: That is what Justice Phillips is saying.
MR GRAHAM: Yes, and really there are two stages to this: the law does not contemplate that it will happen and it confers powers which, properly exercised, would not enable it to happen.
KIRBY J: But there is a bit of a bootstraps about that because it is, as it were, saying that because courts operate in a very proper and cautious and appropriate way, that therefore questions of invalidity will not, cannot, arise, whereas when you look at the statute and construe it and then measure it by the Constitution, the fact that it can arise may present a question of invalidity.
MR GRAHAM: Well, your Honour, I am harking back to what Justice Phillips said. The power to grant an amendment might, on its face, enable an amendment to be granted which was not competent such as, for example, an amendment which enabled a statute-barred cause of action to be litigated. That is not authorised by the powers of amendments of the Court, but the possibility that that power might be overused does not mean that the power itself is invalidly granted and that is the point that we were seeking to make at the outset.
Now, I had said that jurisdiction over the claims, wherever the plaintiffs may be, is possessed by the Supreme Court of Victoria and that is put in Mobil’s submissions, paragraph 11. Mobil is, as member of the Court have observed, clearly subject to the jurisdiction of the Supreme Court of Victoria. It is alleged to be incorporated in Victoria in paragraph 2 of the statement of claim and perhaps interestingly at page 3 of the appeal book, the endorsement on the writ, it is alleged that it is a resident of Melbourne. We, for ourselves, and I believe the second defendant takes the same position, accept that to qualify as a group member, every member must be able to be an actual plaintiff and be capable of bringing a separate action in the Supreme Court of Victoria in relation to his, her or its separate cause of action and we accept that in paragraph 7 of our submissions. The second defendant accepts it in paragraph 35.
GLEESON CJ: The Part 4A proceeds upon the assumption, does it not, that the Supreme Court of Victoria has in a way exercised jurisdiction over the defendant in respect of the subject matter of the claim?
MR GRAHAM: Yes, I agree with your Honour, perhaps with the qualification, each and every one of the claims that each group member may have and whether they be arising out of contract or in tort. This, we say, necessarily follows in order to launch a valid group proceeding from the terms of section 33C of Part 4A to which my learned friend, Mr Jackson, has referred. What one needs in order to commence a competent group proceeding is that there be – this is paragraph (b):
the claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances; and
(c) the claims of all those persons give rise to a substantial common question of law –
and it goes on to conclude, and these words are important:
a proceeding may be commenced by one or more of those persons as representing some or all of them.
So section 33C(1) presupposes the capacity of each group member to bring a separate action and it goes on to allow one member of the group to be named as plaintiff or more than one member of the group to be named as plaintiff, and for that person to represent some or all of the other group members. I might say that even takes account of the possibility of a claimant who has already launched proceedings in their own name not being included in the original group, not even requiring opting out or exclusion.
So we say that all requirements for a sufficient connection with the law of Victoria and the jurisdiction of the Supreme Court of Victoria are met in this case by virtue of the need to satisfy the requirements of section 33C(1), and that is not controverted.
GLEESON CJ: Just as a matter of interest, how does this legislation deal with a position where there are, as it were, competing class actions commenced? Perhaps different plaintiffs’ solicitors pushing their clients to the head of a queue?
MR GRAHAM: Your Honour, it does not in terms, although such a situation did arise in what I can call the Longford litigation in the Federal Court of Australia where there were competing group actions brought and the court made orders, in effect, consolidating them and assigning responsibility for the conduct of the proceedings to particular solicitors. I forget whether is was jointly or severally, but the problem was dealt with by the court by making procedural orders.
In the event that there were proceedings in more than one jurisdiction – and it would not matter whether one was a group proceeding and the other was an individual proceeding – the matter could be dealt with under Part 4A in a number of ways: either by an opting out or by an exclusion order by the court, or I would expect by the court applying, if I can lapse into Latin, rules concerning forum conveniens or lis alibi pendens, but there is nothing novel about those procedural remedies being available to the court to resolve such a question.
Mobil’s attack on the validity of Part 4 really seems to focus in the end – leaving aside the Kable point – upon the representative character of a group proceeding, which involves the ability of the court to make orders affecting the interests of group members who are not plaintiffs; then, the possibility that, despite the notification process provided for in relation to group members under Part 4 and the orders which may be made for notification, a group proceeding may proceed to judgment without the knowledge of some group members. Then, there is the possibility that some group members may not be residents of Victoria, or otherwise present, and yet they become, in substance, a party to a proceeding.
Now, we make short answers to those, and these are developed in our written submissions. Part 4A certainly creates a new form of representative proceeding, which differs, in many respects, from traditional forms of representative proceedings, whether the representative party be a plaintiff or a defendant. Justice Ormiston made an observation to that effect in Schutt Flying Academy v Mobil (2000) 1 VR 545, paragraph 41. His Honour there cites the judgment of this Court in Wong v Silkfield, to which your Honours have already been referred, at paragraph [28] of Wong v Silkfield. But to say that Part 4A creates a new form of representative proceeding takes one, with respect, nowhere on the question of validity.
Then, my learned friend on several occasions this morning and in the written submissions takes issue or complains of the possibility that some group members may ultimately never have notice of the proceeding, despite all the safeguards and processes for notification that the part provides for. In aid of that submission, reference is made to cases concerning substituted service on defendants. The same sort of objection of a party having no notice of a proceeding, of course, might be made in respect of cases involving substituted service. We would observe that the consequences upon a defendant in respect of whom an order for substituted service has been made and carried out would probably have much more extensive consequences for the defendant than notification of a proceeding to a group member.
But if there is an analogy to be pursued here between notification to a plaintiff and substituted service on a defendant, we do point out that it seems well established that service in accordance with an order for substituted service is treated as enabling and achieving valid and effective service as good as actual personal service.
It is acknowledge, and it was mentioned in the Schutt Flying Academy Case, that substituted service is not always effective – that is at page 561 of the report – but the fact that the order is not always effective does not mean that such an order will generally or in any given case be invalid and we would say likewise, if the analogy is a correct analogy, failure for notification of a group member to bring the proceeding to that group member’s notice does not mean that the notification is legally ineffective.
It is perhaps worth observing that the analogy with substituted service should not be pressed too far. If there has been substituted service, there are remedies available to a defendant who has not been served which are different from what is provided for under Part 4A. Further, the rights conferred by Part 4A upon group members, such as the rights to opt out and the right to seek exclusion under section 33KA, have no analogy in the field of substituted service.
My learned friend has expressed concern about group members outside Victoria becoming, in effect, parties to a group proceeding launched under Part 4 in Victoria. This was developed in paragraph 8 of its reply where Mobil said:
that jurisdiction is limited by considerations of territorial nexus. So too is the capacity of the Victorian Parliament to add to the jurisdiction conferred by s.85(1).
One would not take issue with that, but in the present case, and in litigation contemplated by Part 4A, that territorial nexus must be present by virtue of the ability of the Supreme Court proceedings to cover defendants within Victoria, resident in Victoria, in Victoria when service is effected or under this long‑arm jurisdiction, as it has been referred to by the Court today.
KIRBY J: The question is whether it is valid in one respect, that is to say the former, but invalid in respect of the latter as an extension beyond power.
MR GRAHAM: But here, your Honour, my last observation was directed to service upon a defendant, not notification of a plaintiff. In the case of a defendant, there seems to be common ground if you can bring the defendant before the Supreme Court in any one of two, or perhaps, three ways, then the Supreme Court has jurisdiction over the defendant and, hence, the subject matter sought to be litigated.
GLEESON CJ: Could the Parliament of Victoria enact a law saying, “The Supreme Court of Victoria will have jurisdiction in any dispute where the two parties to the dispute desire to avail themselves of the jurisdiction of the Supreme Court of Victoria”?
MR GRAHAM: Yes, it could, your Honour, but subject perhaps to a qualification which would seem to avoid your Honour’s question that the desire to avail themselves of jurisdiction would have to be evidenced in some way before the Supreme Court before the court ‑ ‑ ‑
GLEESON CJ: A submission to jurisdiction by the defendant.
MR GRAHAM: By some submission.
GLEESON CJ: Invoking the jurisdiction by a plaintiff and a submission by a defendant would be the usual way of dealing with it.
MR GRAHAM: Yes.
GLEESON CJ: Mr Jackson talked about Omaha cattle breeders, but if the Supreme Court of Victoria developed a special expertise in relation to the subject of cattle trespass, that is the sort of thing that might happen, as it has happened in England with the expertise of the British courts in relation to shipping matters.
MR GRAHAM: Yes, indeed.
KIRBY J: Yes, but the British courts do not have to operate within the constraints of our Federal Constitution or, for that matter, the State Constitution which requires that jurisdiction will be in or in relation to Victoria, its dependencies and areas adjacent thereto, which obviously is the language of territorial nexus.
MR GRAHAM: Your Honour, yes.
KIRBY J: What is being put to us is that, all right, you can deal with the people in Victoria and maybe just across the border but in so far as you rope in everybody then you have gone beyond “in or in relation to Victoria”. It is no longer characterisable as such.
MR GRAHAM: Your Honour, I think my learned friend is, in effect, forced to that position, but the answer which keeps coming back is that Part 4A does not have anything to say about the jurisdiction of the Supreme Court of Victoria in personal actions against defendants amenable to its jurisdiction in any of the traditional or familiar ways. There is no attempt to rope in defendants, if one must use this phrase, which I think has its origins in the industrial ‑ ‑ ‑
KIRBY J: It is roping in plaintiffs.
MR GRAHAM: “Roping in plaintiffs”, if you like, tends to excite the mind but in the end we say that the legislation is quite capable of doing that and is hedged around with protective provisions which will avoid any unfairness or lack of concern with the rights of absent and ignorant plaintiffs.
Perhaps just to develop that a step further, as has been said, the Supreme Court of Victoria under rule 7 of its rules, has jurisdiction over a defendant anywhere subject to fulfilling one of the criteria set out in the rule. There is no territorial connection with Victoria required under the Service and Execution of Process Act and the jurisdiction of the court might also be enhanced by section 39 of the Judiciary Act, but we did not explore that in the present case. My learned friends in their reply in paragraph 9 said:
No case has been cited by the Defendants establishing the capacity of orders made under the traditional procedure to determine the individual claims of group members outside the jurisdiction, in respect ‑ ‑ ‑
GUMMOW J: Just going back to 39 for a minute. The understanding is, is it not, that whatever expansion goes on by virtue of the Service and Execution of Process Act, that expansion is not to be classified as federal jurisdiction. Is that the theory of the Service and - so it is not in the same ballpark as 39?
MR GRAHAM: No, it is not, your Honour.
GUMMOW J: In other words, if I go along to the Supreme Court of Victoria and issue some process which I want to serve in Perth, the fact that I utilised the Service and Execution of Process Act does not mean I have invoked any federal jurisdiction.
MR GRAHAM: No.
GUMMOW J: That is what the case has come to, I think.
MR GRAHAM: That is right, your Honour, although if the parties happen to be residents of different States and not corporations ‑ ‑ ‑
GUMMOW J: Yes, I understand that.
MR GRAHAM: It might well be said to be ‑ ‑ ‑
GUMMOW J: …..Perth company.
MR GRAHAM: Yes. Moving back to what Mobil said in paragraph 9, it was said that no case had been cited producing a particular determination that the claims of group members outside the jurisdiction in respect of transactions or events which occurred outside the jurisdictions could be brought in. We gave to the Court lately – I think this was yesterday – a reference to Templeton v Leviathan (1921) 30 CLR 34. There is no need, I think, to take the Court to the passages, beyond giving the page references. They are to be found in the judgment of Chief Justice Knox, at pages 57 to 58; page 70 per Mr Justice Higgins; and page 78 per Mr Justice Starke.
The substance of what was said there, which was a case of proceedings to determine the rights of numerous persons, some out of the State and some as yet to be born. The point that the Court made was that there was no difficulty in binding persons out of the jurisdiction of the Supreme Court of Victoria, where the case originated, if they had been made parties to the proceedings by an order, or a representative order had been made, one could say, by implication – or if service out of the jurisdiction had been possible under the then Service and Execution of Process Act.
CALLINAN J: Mr Graham, could I ask you this question, and it really relates, I think, to the Pfeiffer argument. Say a member of a group has a products liability claim against Mobil in Victoria but a claim in contract in Queensland, and the measure of damages might well be different. How does the Supreme Court of Victoria resolve that issue? Say there is a fund, say that there is a judgment and there is a fund, well, what damages does that group member get, assuming the group member has not actively participated but has not opted out?
MR GRAHAM: And has not opted out?
CALLINAN J: Yes.
MR GRAHAM: Without wishing to avoid your Honour’s question, it may well be the case where the court should not make an order for aggregated damages. Aggregated damages ‑ ‑ ‑
CALLINAN J: But the court has the power to do that, does it not?
MR GRAHAM: Yes.
CALLINAN J: So assume the court does.
MR GRAHAM: Then there is no problem, your Honour, the court would proceed as it would if the case were an individual claim by that interstate claimant against Mobil in Victoria.
CALLINAN J: So, therefore, the court might allocate to that group member, for argument’s sake, significantly less damages than that group member would have been entitled to in Queensland, for example? The court has the jurisdiction to say, “I will give damages on the basis of a products liability rather than a contractual liability” and that, for arguments sake, may be significantly less than the contractual measure.
MR GRAHAM: Again, I fall back, in part at least, upon the capacity for the claimant to opt out, for an exclusion order to be made, for an award of aggregate damages not to be made covering that claimant, but then I can ‑ ‑ ‑
CALLINAN J: That could possibly happen, but what I put to you can possibly happen, too.
MR GRAHAM: I was going to answer your Honour in a more substantive way. The Victorian court, just as it would if that were an individual claim by a named plaintiff, would have to deal with the question of damages by applying the law of Victoria, including its choice of law rules, in order to determine how the measure of damages was to be arrived at, again taking note of what the Court decided in Pfeiffer, but it does not give rise either to an excess of jurisdiction being asserted by the Supreme Court of Victoria because it is doing nothing more than it still can do now.
CALLINAN J: But would not the Supreme Court of Victoria be making a choice that the plaintiff itself would normally be entitled to make, that is, which action to pursue, which claim to pursue?
MR GRAHAM: It would, your Honour, if there was no indication on behalf of that group member which claim was preferred and in the exercise of a proper discretion alert to the problem, then it should not include that claimant in the aggregate award. Leave that claimant to assert in his or her own name which claim it wished to have pursued to an individual judgment in his or her favour.
HAYNE J: Now, if the relevant question is the question of power as distinct from the question of wisdom of the legislation, fairness of the legislation, desirability of it, why is there not power in a State Parliament to say, “We will, in the interests of a defendant resident within the State, or at least brought before the court of the State, simply answer that question whether it is fair to the plaintiff, good for the plaintiff or not.”? Now, you might have a very interesting debate about the wisdom of the legislation, a debate which I would, for myself, resolve one way rather than the other, but at the level of power is it not open to the State Parliament to make that choice?
MR GRAHAM: We would say yes, your Honour, and ‑ ‑ ‑
CALLINAN J: But does that not thereby defeat the power of another State to impose its own regime for claims properly brought in that State or which could be brought in that State?
MR GRAHAM: Your Honour, it does not defeat the power of the other State.
CALLINAN J: Say Queensland is legislated in the same way.
MR GRAHAM: But then the collision, your Honour, would not occur by comparing the two statutes. The collision would occur further down the track when two ‑ ‑ ‑
GLEESON CJ: That would just give rise to a conflict of laws issue or a choice of law issues?
HAYNE J: Or a race to the courthouse and the resolution of those races in the ordinary fashion.
MR GRAHAM: Yes, your Honour, and, in our submission, one can go one step further, with respect to your Honour Justice Callinan, and one could say that this can happen now and one cannot question the separate grants of jurisdiction to the Supreme Court of Victoria and the Supreme Court of Queensland to deal generally with matters relating to the respective States.
KIRBY J: But the plaintiff says on its argument that the fact that section 109 talks of inconsistency between Commonwealth and State laws is an indication that it just was not contemplated that there would be inconsistencies of this kind and that the whole structure of the Constitution is a territorially‑founded structure and, therefore, before you get to conflicts of laws which are subject to the Constitution or races to the court which are subject to the Constitution, you have to look at the concept in the Constitution and that is why I raised the question and it is really inherent in Justice Callinan’s question of differential State treatment of whether the States have all come in their array here to support this legislation have really attended sufficiently to the consequences of the theory of the Constitution which they are propounding. Maybe they have, but it does seem to raise a question as to how one, compatibly with our constitutional assumptions, resolves differences in the way different States will deal with these sorts of things.
MR GRAHAM: Your Honour, with respect that does not go to the validity of Part 4A.
KIRBY J: I think it may.
MR GRAHAM: Indeed, it is a problem, one could imagine, had existed long before Part 4A was enacted because you could have theoretically competing judgments between the Supreme Courts of two States in relation to matters which could have been the subject of a group proceeding.
KIRBY J: The plaintiff says it goes to validity because the Constitution denies - by having dealt with conflicts between federal and State laws and not having dealt with this problem, that it is written on an assumption that this problem does not arise basically because each State will stick to its own backyard.
CALLINAN J: This Act suspends the limitation period in Queensland too, does it not? The operation of limitation period in Queensland, New South Wales, everywhere.
MR GRAHAM: Your Honour, I was anticipating that question, and I was going to deal with it at some length. I am happy to deal with it now or after lunch, depending what the Court would prefer.
GLEESON CJ: Perhaps you can come to it after lunch, Mr Solicitor. We will adjourn until 2.15.
AT 12.47 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.17 PM:
GLEESON CJ: Yes, Mr Solicitor.
MR GRAHAM: May it please the Court. Just before lunch I was dealing with some points raised, particularly by your Honour Justice Callinan, concerning what might be called the possibility of an inconsistency between the laws of two or more States or the jurisdiction of the courts of two or more States in respect of interstate disputes, that is to say disputes involving plaintiffs from different jurisdictions or defendants from different jurisdictions.
I probably have said this already, that that possibility exists now without the aid of the introduction of Part 4A, concurrent proceedings in more than one jurisdiction arising out of the same or similar events could be instituted. So far as defendants are concerned, reliance might be placed upon the Service and Execution of Process Act in order to bring in defendants from jurisdictions other than the forum in which the proceedings were instituted.
The first point to be made in response to such concerns is that in the present case there is no suggestion of inconsistency, that is to say of conflict between the laws of more than one State or jurisdictions invoked in more than one State or Territory. If such problems did arise, even without Part 4A, there are, of course, mechanisms to deal with the problems, a stay of proceedings; in the case of Part 4A, exclusion of group members; the possibility of the cross‑vesting from one Supreme Court to another of the whole or part of a proceeding if another forum was seen to be more appropriate; and, finally, the application by each of the forum courts with choice of law rules. But no situation, we submit, can be envisaged where there will be, what I would call, an irreconcilable inconsistency.
Could I turn to the question of limitation laws, because I noted something that your Honour Justice Callinan said in relation to section 33ZE of the Act, and I think your Honour drew attention to this during the special leave application in Femcare as well. Our first submission is that one needs to approach section 33ZE with some caution because the circumstances in which it might be invoked in an interstate context are likely to be rare.
That does not mean that its validity can be disputed on that ground alone, but section 33ZE would only apply where an interstate group member had opted out of the group and wanted to institute his or her own proceeding in another jurisdiction or a group member had been excluded and wished to commence proceedings in another jurisdiction and a problem arose because of the lapse of time between the accrual of the cause of action and the time when the second proceeding was instituted.
The defendant might say, “Well, the statute of limitations in the newly invoked jurisdiction has run and I have a complete defence”, and the plaintiff might seek to say, “Well, I can call in aid section 33ZE”. That is the kind of context in which section 33ZE would operate where there was an interstate element. Obviously there cannot be any doubt about the validity of section 33ZE in the case of a Victorian statute of limitations. It is obviously competent for the State of Victoria to modify its own statutes of limitations. It also should be noted ‑ ‑ ‑
GLEESON CJ: But a limitation period always runs in favour of a defendant, does it not?
MR GRAHAM: Yes.
GLEESON CJ: So that a suspension of a limitation period is always in favour of a plaintiff.
MR GRAHAM: Yes, and in my examples I was speaking of a plaintiff who had ceased for some reason to be party to the group proceeding might be confronted with another State’s Limitation Act and would then wish to say, “Well, I am not disabled from bringing my action by that.”
GLEESON CJ: No, this is an interstate plaintiff taking advantage of this legislation.
MR GRAHAM: Yes, having taken advantage of it and then ceasing to do so, because once the group proceeding is brought the Limitation of Actions Act which would apply – perhaps I can start that again. In the case of a Victorian plaintiff, no problem. In the case of an interstate group member, that group member would say, “If the limitation period had commenced to run but had not expired by the time the group proceeding was brought, that action is not running against me”, and the Victorian court should say, applying a choice of law rule, that the choice of law rule that would otherwise cause that interstate statute of limitation to be applicable is displaced by a different law so far as the Victorian forum is concerned, suspending its operation. Your Honour Justice Callinan put it to me in terms of that section 33ZE modified the, let us say, Queensland statute of limitations ‑ ‑ ‑
CALLINAN J: Or purports to, yes.
MR GRAHAM: ‑ ‑ ‑ but we say, it does not do that, quite. What it does is modifies the Victorian choice of law rule which, following Pfeiffer, would require the Victorian court otherwise to apply the Queensland statute of limitations. But it does not purport in terms simply to modify another State’s law. That would plainly be incompetent.
CALLINAN J: Well, that involves reading down 33ZE in the case of a claim which might be statute barred in another jurisdiction, reading down 33ZE so that that statutory bar will still operate, notwithstanding 33ZE. Do you say that?
MR GRAHAM: I am not so much reading down section 33ZE but reading it as achieving that result: that the interstate statute of limitations, so far as Victoria is concerned, would not be treated as running.
KIRBY J: Does that present the question of whether Pfeiffer, in the joint reasons of the majority, rests on a constitutional basis?
MR GRAHAM: Your Honour, we say that it could, if events occurred in which it was necessary to decide the point, but we say that the joint reasons in Pfeiffer at page 535, paragraph 70, left the question open.
HAYNE J: Can I take you back to the premise of this part of the debate, because I am not sure I understand the premise. Was not the premise that the interstate claimant’s claim was barred by the law that governed that claim?
MR GRAHAM: Yes, it was, your Honour.
HAYNE J: If it was barred, it is barred. Section 33ZE does not speak to that case at all, does it?
MR GRAHAM: Your Honour has got ahead of me one step, yes. If the claim were barred at the time when the group proceeding was instituted, the claim were barred by the law of another State, that is the end of it. Pfeiffer says that it is extinguished.
GUMMOW J: Yes, it is not running.
MR GRAHAM: It is not running; it has gone. So that class of case can be put to one side where the statute has run so far as the interstate group member is concerned. Section 33ZE is perfectly valid so far as Victorian laws are concerned. One is only concerned with the case where, after the commencement of the group proceeding, the limitation law of another State runs out before judgment. We say firstly it is competent for the Victorian Parliament to alter the choice of law rules applied by the Victorian forum to achieve that. If we are wrong because Pfeiffer says we are wrong about that, then we say you do not read section 33ZE to have that effect and you confine its operation to statutes of limitations of the State of Victoria and, for that matter, probably the statutes of limitations of other countries in an international context if they are to be regarded as procedural laws and not as substantive laws.
What we say primarily is that it is not necessary for this Court in this case to rule upon the full scope of section 33ZE. We would emphasise that if section 33ZE goes too far, as it might ultimately be said it does if it is construed to go beyond Victorian statutes of limitations, then section 33 is not itself invalid and certainly its presence in Part 4A does not bring down the whole of Part 4A. That is as far as we need to go for the purposes of this case.
Could I turn to an aspect of Mobil’s submissions which we did not touch upon in our outline of argument, and for that I apologise. That concerns section 73(ii) of the Constitution and the jurisdiction of the High Court. It is really to state the obvious, and it has been said by this Court more than once, that not every judgment or order of a Supreme Court of a State, or of other State courts, is capable of being the subject of this Court’s appellate jurisdiction: judgments of inferior courts, which are not the subject of appeal to a Supreme Court, not in federal jurisdiction; judgments following a jury’s verdict of acquittal.
Section 73 itself recognises that there may be further limitations, as the opening words of course indicate: exceptions and regulations prescribed by Parliament. Further, this Court’s appellate jurisdiction is not available, of course, where Supreme Courts exercise non‑judicial power and also where State judicial power is conferred upon bodies other than State Supreme Courts or other courts. For the sake of brevity, on the rest of this topic we would respectfully adopt what appears in the submissions of some of the interveners, if I can just nominate them: the Commonwealth’s submissions, paragraph 3.1 to 3.4; South Australia, paragraph 35; Western Australia, paragraphs 12 to 17 and 24; and New South Wales, paragraph 4.2 to 4.4.
So far as what might be described very briefly as the Kable point, it does not seem to be now at the forefront of the submissions of the plaintiff. All we would say generally, apart from what is in our written submissions, is that Part 4A should be regarded as simply adding to the jurisdiction of the Supreme Court. It does not add a jurisdiction which is in some or any sense incompatible with the federal jurisdiction vested in it. It does not in any way infringe what the court said in Kable, depending upon which of the judgments one looks at for the purposes of identifying the principle.
The proper approach, in our submission, to Part 4A, as I said at the outset, is that the court must be assumed not to misuse or abuse its powers but will exercise them properly and in conformity with the due exercise of judicial power, hence no invalidity.
Apart from that, if the Court pleases, and subject to any questions the Court may have, may I just indicate the order which we seek in this case. We seek that the demurrer of the first defendant be allowed, and if it be necessary to say this, on ground 17.1, because that is the surviving ground
after the amendment to the statement of claim, we submit that the demurrer be allowed with costs, including reserved costs.
GLEESON CJ: Thank you, Mr Solicitor.
MR GRAHAM: If the Court pleases.
GLEESON CJ: Yes, Mr Beach.
MR BEACH: First, we adopt the submissions of the State of Victoria, and also what we have said in our written outline. Can I deal with the territorial issue first. We see Part 4A as properly characterised as a procedural law, that is, a procedure to deal with group proceedings in the Supreme Court of Victoria. If that is the correct characterisation then we respectfully adopt the words of Justice Deane in Breavington v Godleman, that is has its territorial operation in the territory in which the court proceedings take place. That is a passage at page 137 of Breavington v Godleman, (1987) 169 CLR 41.
KIRBY J: Does that mean that there need be no connection with the territory of the State save that that is where the plaintiff has invoked the jurisdiction of a court?
MR BEACH: No, the connection is the Supreme Court of Victoria, Part 4A deals with the procedures of the Supreme Court of Victoria. That is where the nexus test, if there is one, ends, with respect, to this particular matter before the Court.
KIRBY J: What about the provisions, starting with the Constitution of Victoria, that it must be in and in connection with the State of Victoria? Does that have no real work to do?
MR BEACH: Section 16 of the Constitution Act which expresses itself in terms of “in and for Victoria in all cases whatsoever” are not only the words of widest ambit stand but they, of course, can be modified by the Victorian Parliament, so they cannot be the source of any territorial limitation on the Victorian legislature. The only other way to glean some territorial limitation on the Victorian legislature is from the Commonwealth Constitution, and we say that there is none. There are constraints in terms of section 109 and other parts of the Commonwealth Constitution, but unless there are express restraints applied, we say there is no necessity for any nexus test, so we ‑ ‑ ‑
KIRBY J: There is no implication as to the territory of the States by the fact that the States themselves are geographical entities covering particular parts of the Commonwealth?
MR BEACH: The Constitution expressly eschews placing any territorial limitations on any of the States. It refers to the State Constitutions in section 106 and 107 and says that they are to be subject to the Constitution, but there is no other provision that makes express reference to what the territorial limitations of State Parliaments are.
KIRBY J: But that cannot be pushed to an absolute, can it, because otherwise you would have States enacting legislation that has nothing to do with the States and the New South Wales Parliament enacting legislation for Western Australia, Western Australia enacting legislation for Queensland. The whole hypothesis of the Constitution – correct me if I am wrong – is that you deal with your own State ‑ ‑ ‑
MR BEACH: You deal with your own State.
KIRBY J: ‑ ‑ ‑ with the territorial extensions that come with the decisions of the latter part of the 19th century and the 20th century.
MR BEACH: If one goes back to the history behind the provisions in the Victorian Constitution Act, which originates in 1854, the Victorian legislature is expressed essentially to have all of the powers of the Imperial Parliament.
GUMMOW J: Is not this all in Union Steamship?
MR BEACH: That is the trouble, Union Steamship refers to the words “peace, order and good government” and then refers to 19th century cases to say that that might provide some foundation for a nexus rule but it does not actually address the specific text of the Victorian Constitution Act nor set out properly what the constitutional foundation for the nexus rule is. It assumes that there is some form of nexus rule, a real but perhaps a remote connection, but it does not actually expressly source itself to any provision of the Commonwealth Constitution. It actually only sources itself to the words “peace, order and good government” which derive from the language of various State Constitution Acts, as a matter of historical record.
GUMMOW J: It is also dealt with in Port MacDonnell, is it not?
MR BEACH: Yes, but again the test is assumed without actually setting out what its proper constitutional foundation is.
GUMMOW J: Why do we have to solve it now?
MR BEACH: I am not saying that we do. I am just answering the question that we do not accept that apart from the express language of section 16 of the Constitution Act 1975 or under the Commonwealth Constitution that there is any other territorial restraint under Victorian legislature.
GLEESON CJ: Mr Beach, what was the page in Breavington to which you gave a reference?
MR BEACH: It was page 137, the first third of that page.
GLEESON CJ: Thank you.
KIRBY J: Are you familiar with the cases that the Solicitor‑General for South Australia has referred to in respect of the development of the United States and Canadian law on this subject?
MR BEACH: I have not looked at those. I was going to address your Honour later on the United States position and how they gleaned from the due process provision and the faith and recognition provision of their Constitution some constitutional foundation for a choice of law principle, but I was going to deal with that particular issue a bit later.
KIRBY J: Is it footnote 29 and 30 of his submissions?
MR BEACH: Yes.
KIRBY J: He suggests that they have gone on a different direction. I would like to know why, at some stage, from somebody.
MR BEACH: They do provide a constitutional foundation for the choice of law principle. You will recall that in the Phillips decision that both the State of Victoria and we have referred the Court to, there was a discussion about whether the Kansas Supreme Court should have applied its own law in relation to interest on royalty payments given that there were many people throughout America and various different statutes. What they did in that case was to overturn the Kansas Supreme Court’s decisions. They did not say that the Kansas statute was invalid but they said the decision was invalid because it applied a choice of law principle that infringed the constitutional provisions of the United States.
But returning for a moment to the territorial issue, we do not accept that there is binding authority on this Court which links the nexus rule to the provisions of the Commonwealth Constitution and, of course, it is also apparent that Union Steamship and Port MacDonnell deal with statutes that predate section 2 of the Australia Act so that obviously has to be looked at as well in terms of determining what the territorial constraints are on State Parliaments. Can I make a second point that ‑ ‑ ‑
KIRBY J: Which Australia Act is that?
MR BEACH: The Commonwealth one, section 2 of the Commonwealth Australia Act.
KIRBY J: What was the power of the Federal Parliament to make that enactment?
GUMMOW J: We have said so, have we not, in Sue v Hill? We said it was 51(xxxvii), I think.
KIRBY J: What is your answer? I do not hear your answer.
MR BEACH: We gratefully adopt what Justice Gummow has said about the head of power ‑ ‑ ‑
KIRBY J: I did not hear Justice Gummow’s answer ‑ ‑ ‑
MR BEACH: Sue v Hill.
KIRBY J: I did not hear Justice Gummow’s answer and I am finding it difficult to hear your submissions.
MR BEACH: I am sorry, section 51(xxxvii). Now, section 2 of the Australia Act states that a State legislature has the power to legislate extraterritorially “for the peace, order and good government of that State”, but they express that to be an additional power. It was not words of restraint or in any way limiting what the territorial limitations were on a State Parliament that predated the Australia Act because it uses the word “include”. So there is scope for this Court to properly or more fully elucidate the constitutional foundation, if there is one, for the nexus rules and, as we submit, we say that there is no such constitutional foundation.
In terms of Part 4A, I have said that it is procedural so far as we are concerned, but even assuming that it is not, even assuming that there is one provision such as section 33ZE that is substantive rather than procedural, to use that description, we say even then there is no extraterritorial operation on Part 4A. In terms of the binding nature of any judgment delivered by the Supreme Court, Part 4A says nothing about that matter. It talks, in 33ZB, of judgments but it does not talk at all about ex Victoria enforcement or recognition. That is a matter dealt with entirely outside Part 4A and dealt with under the Service and Execution of Process Act, private international law or possibly section 118 of the Constitution.
KIRBY J: Is that not a bit late? You have your judgment that the Constitution commands that full faith and credit be given to it.
MR BEACH: If it is a judgment of the Supreme Court, section 119 would literally command that a Queensland court give recognition to it, so it does not really answer the question here.
The other aspect is that there is authority to suggest that enforcement outside a State is not really an issue that is relevant to determining the validity of the particular State statute. Can I refer the Court to what the judicial committee said in Ashbury v Ellis [1893] AC 339 at 344 and also what Justice McHugh said in the New South Wales Court of Appeal in Flaherty v Girgis (1985) 4 NSWLR 248 at 270. Justice McHugh was in dissent in terms of the inconsistency issue in the New South Wales Court of Appeal, but on this point there was agreement.
We say that Part 4A does not in any way extend the Supreme Court’s existing jurisdiction. Part 4A does not purport in any way to extend section 85 of the Constitution Act. In fact, it narrows it for the reason that it is no longer able to ‑ ‑ ‑
GUMMOW J: What do you mean by “jurisdiction”, because the word has about four meanings?
MR BEACH: Yes, I will take two: amenability of the defendant to the court’s process is one possibility; a second is subject matter. I will take those two descriptions from Lipohar v The Queen at page 517. We say that there has been no extension either to the amenability of the defendant to the court’s process or in subject matter. In fact, there has been a limitation. The court cannot make an order for costs against a group member and also section 33G indicates that in terms of Part 4A proceedings, you cannot invoke Part 4A if you are in the invoking jurisdiction by reference to the cross‑vesting legislation. So we say, if anything, there are limitations on jurisdiction rather than extensions.
In answer to a question from Justice Kirby, I had dealt with the nexus test. Can I just give the Court a copy of the decision of Dill v Murphy which sets out the historical origins of the Victorian Constitution Act because it has been the position since 1854 that the words of the Victorian Constitution have been expressed in terms of “laws in and for Victoria in all cases whatsoever” than using the words “peace, order and good government” that might appear in other State Constitution Acts.
KIRBY J: In your footnote 8 you helpfully collect the three categories in which this issue has been considered by the Court: the territorial waters cases, taxation cases, road transport cases.
MR BEACH: We make the point that you need to first identify the subject matter of the law. If the subject matter is liability to be imposed on a director of a company for outstanding road charges, then you say that is the subject matter. What is its connection with a particular State? So we have just identified those three categories of cases in order to make good the proposition that you need to properly look at the subject matter of the law, and we say here the subject matter is the Victorian Supreme Court and a procedure which permits group proceedings, both beneficially designed for group members but also for defendants who can avoid a multiplicity of actions in various jurisdictions with multiple costs.
KIRBY J: Is there not a risk in that definition of the subject matter that you define yourself out of the problem? I am not putting that combatively but just to understand what principle, if any, has emerged from those three classifications. Is there one good passage which describes what the court has said looking at a challenge generally, I think, from another State to the enactment?
MR BEACH: The passage that we rely upon ‑ ‑ ‑
KIRBY J: You have to quote what Justice Dixon said which seems to be it is all very hard and it does not seem to be very helpful.
MR BEACH: The passage that we would rely upon is a passage of Justice Gibbs in Pearce v Florenca.
KIRBY J: Is this that you take it very widely and it is not construed narrowly, is that what ‑ ‑ ‑
MR BEACH: That is right, but also we focus on his use of the words “subject matter”.
KIRBY J: What is the case?
MR BEACH: It is Pearce v Florenca. It is referred to in paragraph 11(d) of our outline, where he said there has to be a real connection, even a remote or general connection, between the subject matter of the legislation and the State. We say simply you just have to look at the amending statute to identify what the subject matter is. The subject matter is not the possibility of Queensland claimants bringing proceedings, the subject matter is the Victorian Supreme Court procedures to deal with group proceedings in a different way than that already permitted under the Rules.
KIRBY J: That is one way. The other way to define it is that the subject matter is a Victorian statute which, tacking on to its powers of its Supreme Court to deal with a problem apt for Victoria, has roped in a whole series of people who live in other parts of Australia and perhaps overseas who do not know of the proceedings and are not aware of their existence and who are made subject to orders which will bind them and which the Constitution will pick up and command that courts throughout Australia give full faith and credit to.
MR BEACH: Well, the first point is that representative ‑ ‑ ‑
KIRBY J: Define the category and you have solved the problem.
MR BEACH: Representative proceedings under the rules of court, which could only have been made as procedural rules, and also in this Court, the High Court have always entailed those possibilities, whether remote or real. The second point is we do not accept Mobil’s characterisation of the statute that implicit within this statute is the notion that there will not be adequate notice or opportunity for group members to make a choice as to whether they want to participate or not participate. We say they have given undue weight to remote and speculative possibilities rather than looked at the language of Part 4A which in sections 33X and 33Y in fact mandates notice, provides for an opt‑out procedure in section 33J, but allows for the possibility of proceedings not by way of claims for damages that there may not be notice, but does not mandate that no notice is given. It just gives the court the discretion to determine whether in a narrow category of case such as the construction of a trust deed, whether notice is necessary or not. So we would re‑characterise the statute entirely differently and we say that the statute mandates notice.
Now, we do not say that the statute needed to do that, but it has done that here and we do not accept that group members do not have a real choice as to whether to participate in the proceeding or to opt out of the proceeding. We have referred the Court in a footnote to one of our submissions, this footnote 11 at page 50‑odd, the demurrer book, to the various procedural safeguards we say have been enshrined in Part 4A to maximise the choice available to group members. The sorts of safeguards that are not mandated at all in relation to representative proceedings under the current Supreme Court Rules or, indeed, the High Court Rules.
Now, can I also make passing reference to some observations in the US ‑ ‑ ‑
KIRBY J: I am sorry to be persistent on this, but, for my own part, I have to have clear in my mind, to answer the challenge of the plaintiff, the concept of what a State, which is geographical and therefore territorial, is confined to, if anything. I have to get it clear in my mind. What Justice Gibbs says, a real connection, even remote or general, between the subject matter and the State. What do you say is the real connection between the subject matter and the stranger in Western Australia who does not see your advertisement in the paper, does not read the back page of the paper, did not listen to the television when it came on, and is being made the subject of a judgment by the Supreme Court of Victoria? What is the real connection?
MR BEACH: What your Honour has described is one possible way in which the statute may operate, but it does not adequately characterise what the subject matter of the statute is, which is a group procedure for the Victorian Supreme Court. We say that is the subject matter, and once you have that, there is a very real connection between that subject matter and the State.
KIRBY J: Even though the persons who will be roped in have nothing to do with Victoria?
MR BEACH: That is a remote possibility ‑ ‑ ‑
KIRBY J: It is not a remote possibility. It is envisaged on the face of the statute.
MR BEACH: No, with respect, it is a remote possibility. The federal statute has been in place since mid-1992, and there has never been a suggestion that ‑ ‑ ‑
KIRBY J: That is not an answer, Mr Beach. The statement of claim refers to the eastern States, so it obviously contemplates at least three States, or maybe four, if Tasmania is an eastern State.
MR BEACH: But if we are talking about possible operation, we are talking about a realistic operation that might deny, in this hypothetical scenario, large numbers of interstate group members from having a choice as to whether they participate or not. That should surely be assessed by reference to how the statute has operated, if it is being suggested that that is a sensible way to read the statute and reveal risk for its operation. There is no case that I am aware of where that situation or risk has ever eventuated, and there are adequate provisions under the statute to ensure that that does not eventuate. As I say, what we have referred to in footnote 11 is the provisions that are designed to deal with that matter.
An opt out is not a once-and-for-all thing. There can be various stages at which the court might give people opportunities to opt out. Prior to determining whether there should be damages assessed, there might be an opt-in provision to allow group members to identify themselves to the representative party in order that some meaningful assessment can be made of their damages. I was involved in the Ryan v Great Lakes Council Case, and even before the trial started Justice Wilcox altered the group description from a broad group description to an identified number of individuals of 175 in number that had been identified and had made themselves known to the solicitors for the representative party. So there are all sorts of different ways and means of avoiding the ‑ ‑ ‑
KIRBY J: Speaking for myself, I am not unsympathetic to the concept. The question is power. The question is, in the face of the challenge, whether there is power. There is power, I would be prepared to contemplate, in the Federal Parliament, but the question is whether, with the territorial limitation that at least there is a territorial hypothesis of the Constitution of the Commonwealth, whether within that there is a limit on the extent to which a State can do it.
MR BEACH: The only limit that has been expressed at the moment is what I will describe as a nexus test which looks at the subject matter and assesses its connection with the State. If I am correct in the characterisation of the subject matter, that is sufficient now. If there are other disproportionate consequences, assuming that these risks that Mobil puts up are real consequences and assuming that they are disproportionate consequences, then what Justice Dixon said in the Broken Hill South Case applies, that as long as there is a connection it does not matter that there might be disproportionate consequences associated with that. It does not mean that the statute is invalid.
KIRBY J: Is there a case amongst your three categories where the Court has had to deal with a problem where there has been an invasion by one State’s legislation of what would, on the face of things, appear to be the proper province of the legislature of another State which the other State has challenged and, therefore, you have had a clear conflict, not between the Commonwealth and the State, which is dealt with by section 109, but between the States where the Court has stated what principle you then deal with, you solve it with?
MR BEACH: I cannot recall such a case, but one might ask the question here, “What conflict is there?” It is only the Victorian Parliament that has legislated for Part 4A. There is no Part 4A or its equivalent in Queensland. Where is the conflict? It is all academic.
KIRBY J: So far. The plaintiff may turn up one day and say, “I’ve been deprived of my due process rights that are guaranteed by the Constitution. I have not been heard by a court and I’ve been sitting up there in Carnarvon and a decision has been made by the Supreme Court of Victoria. I had no knowledge of it. It has affected my rights. It purports to – and the courts of Western Australia are commanded to give it due force.”
MR BEACH: That same scenario can exist under the current representative proceeding rules, which require no notice. You could have a construction of a trust deed, you have a representative party, you have the Supreme Court determining the construction. It binds all of the members of say a unit trust, say it is a property trust, and somebody in Queensland comes along and says, “I knew nothing about it.” There has never been a suggestion that that has in some way impugned the validity either of the judgment or the rules of court that permit such a proceeding to be invoked.
CALLINAN J: Perhaps nobody has taken the point so far. But it may arise here The trouble about this case is that there is such an obvious connection which was pointed out by Justice Hayne right at the beginning. The defendant carries on business in Victoria. The plaintiff carries on business in Victoria. It is registered in Victoria. The fuel was treated in Victoria.
MR BEACH: Perhaps that is the answer to the whole point, and that was given by the State of Victoria. It is not so much impugning the validity of the statute. You might impugn the validity of a judgment that is given by the Supreme Court under the statute, if the judgment carries with it certain vices, either in terms of its extra‑territorial operation or in terms of a denial of procedural fairness or the like, but it is no basis for impugning the statute itself.
CALLINAN J: On the face of the statement of claim, particularly if you incorporate the underlying proceedings, on one view none of the issues which are raised by Mr Jackson really arise here, or have arisen yet. Is that possible? Is that right?
MR BEACH: He says that the statute is invalid.
CALLINAN J: He says the whole statute.
MR BEACH: Yes.
CALLINAN J: But if you accept that the whole statute is not invalid ‑ ‑ ‑
MR BEACH: Is not invalid?
CALLINAN J: Yes. What are the issues that have arisen so far for this Court?
MR BEACH: None.
KIRBY J: Why would this Court not, therefore, refuse to answer the demurrer and just say that this is a moot question?
MR BEACH: Should dismiss the proceedings. It should dismiss the proceeding on the basis that the statute is valid.
KIRBY J: Why? It is effectively asking for a bit of advice, is it not, or advisory opinion?
GLEESON CJ: The demurrer does not ask the question, does it?
MR BEACH: No.
GLEESON CJ: It assessed the statement of claim discloses no cause of action.
MR BEACH: That is right, so if the statute is valid ‑ ‑ ‑
GLEESON CJ: And that…..right up to the proposition that it is either right or wrong.
MR BEACH: That is right.
KIRBY J: If no facts are revealed which present a live controversy then the question is should the Court answer the issue presented by the demurrer?
MR BEACH: It is a live controversy because ‑ ‑ ‑
GUMMOW J: I think because one side wants to strike out the other’s action.
MR BEACH: Because they say the statute is invalid and therefore our action would be a novelty.
CALLINAN J: Mr Beach, once you have got a defendant, Mobil, registered in Victoria, carrying on business in Victoria, the activity is taking place in Victoria or some of the relevant activity is taking place in Victoria, and allegations which embrace at least a number of Victorian members of the group, then plainly the statement of claim does disclose a cause of action, does it not, and a valid cause of action, no matter what might or might not be said about litigants or about members of the group outside Victoria?
GUMMOW J: Mr Jackson’s point is that is right, but it is all inseverable.
MR BEACH: That is right because a ‑ ‑ ‑
GUMMOW J: Therefore, cannot say it is wholly valid; it is partly invalid and inseverable, therefore the whole thing goes.
MR BEACH: This is an attack on the proceeding in toto that we have brought in the Supreme Court. We brought the proceeding under Part 4A. If they say the statute is bad then the whole proceeding goes, it does not matter that we have got valid Victorian causes of action.
CALLINAN J: If he fails on severability then he must fail absolutely, in these proceedings.
GLEESON CJ: Somebody is lining up to make an award of damages against Mr Jackson in respect of loss suffered by people who are not residents of Victoria.
MR BEACH: Yes.
GLEESON CJ: People who, for example, are complaining that there was a term in their contract implied by the Sale of Goods Act of New South Wales, or the Sale of Goods Act of Queensland. Mr Jackson is concerned to argue with the invalidity of the legislation because if it is valid then its reach will affect the amount of damages awarded against his client.
MR BEACH: That is so.
KIRBY J: Under the discretion that is reposed in a judge of the Supreme Court of Victoria, he could confine it to cases in Victoria, is that correct under the Act?
MR BEACH: It is conceivable.
HAYNE J: Much may turn on what is meant by “cases in Victoria”. Ordinarily a case is “in Victoria” if the defendant is sued in Victoria. Cases in Victoria do not ordinarily look to the content of the claim made by the plaintiff or the place of residence of the plaintiff.
GLEESON CJ: The question is whether the Constitution requires us to look to these things.
MR BEACH: We would say, with respect, not.
GLEESON CJ: It is raised for us.
MR BEACH: There is no necessary implication that it be derived from any of sections 106, 107, 109 or 118.
HAYNE J: That the State courts are to be resorted to only by the residents of their States ‑ proposition of startling width.
MR BEACH: As I say this statue does not affect at all the amenability of the defendant to the Victorian Supreme Court’s process.
KIRBY J: Not so startling to the residents of the States should be the subject of the jurisdiction of the court, but that complete strangers who know nothing about what is going on the State, that is the curiosity of the legislation.
MR BEACH: We do not accept that as a fair representation of how Part 4A operates. Even if it did, assuming that the people are overseas, assuming that you have a unit trust and you have a hundred thousand American investors and there is to be a construction of the trust deed in the Victorian Supreme Court, as long as the defendant has been properly served and the Supreme Court’s jurisdiction has been properly invoked. Where is the injustice or the constitutional principle that would say that the Victorian Supreme Court can only deal with a particular or limited number of unit holders.
KIRBY J: But would a judge not in such a case require notice to the identified unit trust holders?
MR BEACH: Part 4A would appear to require that. The rules of the Supreme Court do not require that in relation to representative proceedings. Notice to persons to either be represented in traditional representative proceedings has never been a requirement.
GLEESON CJ: Especially when they are unborn children.
MR BEACH: Yes. All that you had to ensure was that the representative party was bringing the proceeding for the benefit of the class and that he was adequately representing the class. There was not a third element of notice to everybody in the class. In fact, that is why Part 4A is giving more than was ever required by any representative proceedings.
CALLINAN J: There is a difference, Mr Beach, in the trust situation because there is a finite fund and there is only one fund and however much one person entitled gets will affect what the others may get whereas here nobody has the same measure of damages and what group member A is entitled to has absolutely nothing to do with and does not affect what group member C is entitled to.
MR BEACH: But if it is an action for damages, sections 33X and 33Y mandate that there has to be notice. It just says that there may not have to be personal notice but that does not logically entail an absence of notice. It says that there must be notice. So, that is the first point.
CALLINAN J: I am just drawing the distinction between a case in which the rights and entitlements of unit holders are in issue when damages are in issue.
MR BEACH: If damages are in issue notice has to be give. The statute mandates that. It requires notice.
KIRBY J: But not personal notice.
MR BEACH: Yes, but that does not mean an absence of notice.
KIRBY J: Is there something in the back pages of the Telegraph?
MR BEACH: Not necessarily. The Esso/Longford litigation or even the Ok Tedi litigation required newspaper advertisements, radios, personal leaflets in relation to villages in PNG. The Court had to make an assessment of what mechanism was practicable and sensible to enable notice to be delivered to all group members.
KIRBY J: Presumably, the orders would be made apt to the particular case.
MR BEACH: Exactly. The Court would assess factually what particular notice mechanism would be sufficient to give notice and an absence of personal notice does not entail no notice.
KIRBY J: In this case it would not, one would think, be all that difficult. I mean, the type of people who are buying aviation fuel or fuel of this kind, one would think, would not be all that difficult to ascertain. There would be trade journals and maybe even Mobil’s records would reveal who they sold the fuel to.
MR BEACH: That is right and that is why I say it is wrong to characterise the statute as some absence of notice and lack of choice and all the rest. When you need notice the statute mandates it. It gives flexibility to a court as to whether it will order personal notice. It does not say you shall not order personal notice, it just allows the court to conduct an inquiry as to what is adequate in the circumstances.
KIRBY J: I am with Justice Callinan. I think this is a very weak factual case for the propositions but we have to answer the case, keeping our eye on what the next case is and what the principle is for the territorial limit, if any, that is implied in the fact that Australia is made up of geographical States.
MR BEACH: But the territorial limit has never depended upon service on a group member or a class of persons to be represented by a plaintiff. Any territorial connections are looking at service of a defendant. In the United States it is referred to as the “minimum contacts test”. So long as there are minimum contacts between the defendant and the particular State concerned, then there was an appropriate basis for that court to exercise jurisdiction, but the United States Supreme Court has expressly eschewed such a minimum contacts test in relation to plaintiffs or group members and they have said as much in the decision of Phillips Petroleum v Shutts 472 US 797.
GUMMOW J: The reasoning in this case has been subjected to a lot of academic criticism in the United States as being obscure.
MR BEACH: It may have been. The passages that we would rely upon are pages 807, 808 and 811. Page 807, the first complete paragraph, they refer to:
The purpose of this test -
being the minimum contacts test -
is to protect a defendant from the travail of defending in a distant forum, unless the defendant’s contacts with the forum make it just to force him to defend there.
Then over the page, page 808, the first main paragraph:
The burdens placed by a State upon an absent class-action plaintiff are not of the same order or magnitude -
and they go on to ‑ ‑ ‑
GUMMOW J: They keep talking about State choices of law violating the Constitution because they clash with the due process clause. They seem not to really understand the distinction between choice of law and the anterior questions of assertion of jurisdiction in personam. So unless you go through some contortions it is rather difficult to understand what they are talking about.
MR BEACH: Yes, I suppose for my purposes ‑ ‑ ‑
GLEESON CJ: The sort of case in which this issue would bite – I presume the Supreme Court of Victoria’s Rules permit this – is where a plaintiff invoked the jurisdiction of the Supreme Court on the basis that some of the damage suffered as a result of a tort, wherever committed, was suffered in the State of Victoria, and so somebody who might have been in an accident in some distant place and then had sequelae in Victoria invoke the court’s jurisdiction. Is that a possibility in the Supreme Court of Victoria?
MR BEACH: Yes, but take a more remote prospect. Say all of the plaintiff’s cause of action, all of its elements occurred in Queensland, the plaintiff can come along to the Victorian Supreme Court and say, “We satisfy the service rules. We have personally served on Mobil in this jurisdiction. You, the Supreme Court, have jurisdiction to deal with our claim”, and then what is involved is a choice of law issue. If it is a lex loci delicti, well, the substantive law that the Victorian court will apply will be the Queensland law.
GLEESON CJ: Part 4A proceeds upon the assumption that there is jurisdiction in all the group members as well as the moving party to invoke.
MR BEACH: That is exactly right because of the operation of section 33C. That is right.
GLEESON CJ: So it assumes that the Supreme Court of Victoria has jurisdiction to deal with every claim that is the subject of the group proceeding against the defendant.
MR BEACH: Yes, and that is so. The lex loci delicti, whatever that may be, if there has been valid service on the defendant, which is what enlivens the Supreme Court’s jurisdiction, that is what will determined its jurisdiction.
HAYNE J: Let us just pause and examine that. Assume an exercise of long‑arm jurisdiction in a pharmaceutical tort, if I can abbreviate it that way, the sale of a pharmaceutical product which is injurious to health. People all round the Commonwealth suffer injury as a result of ingesting this pharmaceutical. Some of them are Victorians. Can they institute a proceeding in the Supreme Court of Victoria suing the pharmaceutical company incorporated outside the State carrying on its business outside the State but invoking long‑arm jurisdiction on the basis that they the plaintiffs suffer damage within the State and institute that proceeding on behalf of everyone in the Commonwealth who suffered as a result of the sale of this product?
MR BEACH: The answer to that is yes. The Service and Execution of Process Act says if you can personally serve on the defendant in Victoria, you can serve him wherever he is in Australia, so assume that his place of business is New South Wales. So that determines amenability of the defendant even if served in New South Wales under the Service and Execution of Process Act to the Victorian Supreme Court’s jurisdiction. In terms of the subject matter, the Victorian Supreme Court will have sufficient jurisdiction to deal with that subject matter and it may have ‑ ‑ ‑
HAYNE J: There may be a common question of fact, namely whether the product was toxic or not, but there may be radically different governing laws State to State, may there not?
MR BEACH: That is so. If that is established to a court’s satisfaction, a court could order under section 33N that there were sufficient differences and sufficient complexity such as to justify the matter not proceeding as a group proceeding. Alternatively, it can form subgroups. It has powers under sections 33Q and 33R to form subgroups, so, if there are New South Wales sale of goods issues and Queensland sale of goods issues, the court has ‑ ‑ ‑
HAYNE J: That then drives you back to what I understand to be your simple point which you seek to lose in an over‑elaboration by reference to matters at the very fringe of your argument, which is that the subject matter of this legislation is the procedure of the Supreme Court of Victoria, procedure of a Supreme Court which has recognised and understood jurisdictional rules which themselves have a territorial nexus to them. Does it come down to more than that, Mr Beach? Why are we out on the fringes?
MR BEACH: That is what I have been trying to address some of the questions that have been posed, but that is our first point in our written submission, that is our first point in oral submission, and we do not in any way depart from that.
GLEESON CJ: And that is the connection with Victoria.
MR BEACH: Yes.
KIRBY J: The question is whether you lose that connection at some undefined point by reason of a constitutional implied limitation on what the Parliament of Victoria can confer on its Supreme Court. That is really the question, is it not? I know you say you do not and I realise that.
MR BEACH: You only get to that question if there is some theoretical operation that then creates this so‑called extraterritorial operation but we say that has nothing to do with the validity of the statute. The statute is looked at when it is enacted and its subject matter is clear on the face of the statute.
The observations in Mullane v Central Hanover 339 US 306 at page 319 is another way of perhaps expressing the point that we have been trying to make. This was dealing with the possibility that there might not be adequate notice. This is page 319, about point 5 on the page, and they say:
We think that under such circumstances reasonable risks that notice might not actually reach every beneficiary are justifiable. “Now and then ‑ ‑ ‑
GUMMOW J: It is the due process point again, is it not?
MR BEACH: Yes, it is. They say:
“Now and then an extraordinary case may turn up, but constitutional law like other mortal contrivances has to take some chances, and in the great majority of instances no doubt justice will be done.”
You look at ‑ ‑ ‑
KIRBY J: That is like Justice Phillips’ point, that we can trust courts and they will not do silly things and ‑ ‑ ‑
MR BEACH: And if they do do silly things and in the exercise of federal jurisdiction, well, then no doubt the judgment or orders made will have their own validity difficulties associated with them. The other passage on this notice issue that I wanted to refer the Court’s attention to was what Justice Lehane said at first instance in Bright v Femcare 166 ALR 743 at 754, where he said that the question of notice and possible lack of notice and the consequences associated with that should not be overstated and he gives practical reasons as to why that is so.
Now, in terms of choice of law, Mobil’s submissions refer to two sections of particular interest, the assessment of damages provision, that is, damages in the aggregate, section 33Z(1)(f) and they also refer to section 33ZE. In terms of section 33Z(1)(f), we say that provision is procedural, it deals with the quantification or assessment of damage, rather than the availability of a head of damage, and Stevens v Head (1992) 176 CLR 433 make that distinction at pages 457 and 460. But even if it was to be substantive, if under Part 4A a court were to apply choice of law principles and determine that the substantive law to be applied to the tort or the breach of contract was New South Wales law, then if the assessment of damage was held to be a matter of substantive law, no doubt the Victorian Supreme Court would then apply New South Wales principles dealing with that and not exercise any power under section 33Z(1)(f). So again it comes down to flexibility and choice of law.
CALLINAN J: What about if there are alternative claims and different measures of damage, contract and tort?
MR BEACH: Well, the court has the power to deal with issues separately, so it has flexibility under sections 33Q and 33R to do that. Section 33Z only empowers the court. It does not mandate what the court will or should do. It just gives them a power that may or may not be exercised in that particular case, but that does not mean to say that the statute is invalid. You may look at how the power is exercised in an individual case and query whether that has been validly exercised in a particular context, but it does not impugn the validity of the statute.
CALLINAN J: But the Victorian court can choose whether the damages should be assessed in contract or tort.
MR BEACH: Yes. So it can make that assessment. It can then also determine, under choice of law principles, whether it applied Victorian law to the assessment or some other interstate law, and section ‑ ‑ ‑
CALLINAN J: Say it is a New South Wales group member and in New South Wales the claim in contract is barred but not the claim in tort, that neither claim would be barred in Victoria.
MR BEACH: If the lex loci delicti was New South Wales law, the Victorian Supreme Court might have to give effect to that New South Wales provision and not exercise the power under section 33Z. That is what we say in our written submissions that Part 4A does not gainsay anything about what choice of law principles the Victorian Supreme Court may make. Section 33ZE has been dealt with by the State of Victoria and I do not need to say anything about that.
Can I deal with the question of matter and draw the Court’s attention to sections 39 and 79 of the Judiciary Act. The Victorian Supreme Court, having been vested with federal jurisdiction under section 39, can only exercise that jurisdiction in relation to a matter. Section 79 says that the procedures in Victoria apply to how the Supreme Court of Victoria will exercise that jurisdiction, so ‑ ‑ ‑
KIRBY J: What is the relevance of this? This is State jurisdiction, is it not?
MR BEACH: The relevance is that sections 39 and 79 only permit the Supreme Court when it is exercising federal jurisdiction to do so in relation to a matter. So there is nothing about Part 4A that is inconsistent with that, and if there were an inconsistency, there would be a 109 issue. But we say that there is no inconsistency, because ‑ ‑ ‑
GUMMOW J: Why would there be a 109 issue?
MR BEACH: Because, on one view, Part 4A may be telling the Supreme Court and exercise ‑ ‑ ‑
GUMMOW J: Part 4A cannot speak to federal jurisdiction. There is no 109 issue. It is a law school howler to say that. The question is what is picked up? It would not be picked up.
MR BEACH: So you then get back to the situation not where the Supreme Court is exercising federal jurisdiction, because it can only do so in relation to a matter. You are only, then, looking at the question of the Supreme Court exercising State jurisdiction. And there is no requirement ‑ ‑ ‑
KIRBY J: You are only raising federal jurisdiction to contrast the fact that, in that particular case, a matter is required both by the Constitution and the Judiciary Act ‑ ‑ ‑
MR BEACH: Exactly.
KIRBY J: ‑ ‑ ‑ but there is no such requirement in the case of the Supreme Court ‑ ‑ ‑
MR BEACH: That is so.
KIRBY J: ‑ ‑ ‑ exercising State jurisdiction.
MR BEACH: In exercising State jurisdiction. So the only way you can attack Part 4A in that operation is via the Kable route, if you can do so at all.
GUMMOW J: The only attack that is left in the ring is section 73, as I understand it.
MR BEACH: Yes, and for the reasons that the State of Victoria has said, section 73 does not logically entail that everything that the Supreme Court does has to be something which can then be appealed through to the High Court. That is the short point.
KIRBY J: Appeals have come to the High Court from orders such as are made in the Industrial Commission of New South Wales under the old 88F of the Industrial Arbitration Act – I think it was called – which was fixing up contracts and making new contracts. They would not normally be the declaration of the pre-existing law.
GUMMOW J: Did it come through the Supreme Court?
MR BEACH: Yes.
KIRBY J: I do not think in that particular –I am thinking of Brown v Rezitis – I think that was one of those cases that came straight from the Industrial Commission as somehow equivalent to the Supreme Court.
MR BEACH: There is only one other issue and that was how conflicts between competing group proceedings might be resolved and we have dealt with that in our written submission at paragraph 44 and we say that possibilities of competing group proceedings really does not determine the validity of the statute.
GLEESON CJ: Thank you, Mr Beach. Mr Solicitor for South Australia.
MR SELWAY: If it please the Court. In our written submissions we have used the word “service” inappropriately throughout for which we apologise. If your Honours could note that the words should read “notify”. We have used it in, at best, a colloquial and misleading sense.
Your Honours, as the question of nexus and federation, we accept that the statements that the Court has given that a remote or general connection is sufficient is a conclusion based upon the nature of the Australian Federation, a conclusion that is, if you like, assumed in the sense that the nature of the Federation is not discussed in any detail in those cases.
We say it can be explained. We say that the distinct features of the Australian Federation include those we have set out in paragraphs 11 to 13 of our written submissions and those serve to distinguish the Australian States, for example, from their US counterparts or from the Canadian Provinces. Your Honours, I do no propose to deal with it at any length but in relation to the Canadian Provinces, the Canadian Provinces have specific enumerated powers, as against the Australian States. Those enumerated powers are normally powers related specifically to things such as territory, ownership of land and so forth. Not entirely, but generally.
Consequently, it is not surprising that the general approach in Canada has been that the provinces have limited extraterritorial powers. It is rarely spelled out why that is or how it is. We have put in our written submissions a citation to Tolofson where the Canadian Supreme Court identifies the limitation on the powers. It is probably worth noting, though, that in light of the federal choice of law approach of the Canadian Supreme Court in Tolofson and the later case of Hunt there is at least some academic discussion that the provinces may well have a broader extraterritorial power to, if you like, facilitate the federal choice of law principles.
So far as the United States is concerned, the general principle is that the United States States do not enjoy extraterritorial powers. That is derived from at least a couple of principles. One of them is that the States are perceived as separate law areas which, if you like, dictates an approach to unlimited extraterritorial powers because there is no mechanism within the US Constitution to resolve disputes and consequently it is quite possible in the US to have inconsistent laws being upheld within their various jurisdictions.
KIRBY J: Does that mean if you have hot pursuit that the sheriff has to stop at the border?
MR SELWAY: My understanding is, subject to whatever arrangements there may be in the other jurisdiction, the answer is yes. There may also be some limitations upon the power of warrants and so forth in Australia to apply across the border.
GUMMOW J: They do not have a federal Service and Execution of Process Act.
MR SELWAY: No, your Honour.
GUMMOW J: It is one of their great weaknesses, one of the strengths that our founding fathers saw they should put in.
MR SELWAY: Yes, your Honour. There is also a philosophical basis behind the United States Constitution on the basis that, if you like, a suspicion by both the court and maybe the people about the granting of powers, and so consequently one sees its expression in the Tenth Amendment that powers that have not been delegated to the United States or to the States remain with the people. Consequently, as against the Australian Constitution where there is no such principle, in the United States one looks to limit power rather than extend it.
It is unnecessary for the Court to get involved in a detailed analysis of the nature of the Australian Federation but it is sufficient, we say, to note that the Australia States sit in a different position and that in that regard the federal structure does limit the powers of the Commonwealth in relation to the States, of the States with respect to the Commonwealth, and of the States in relation to each other.
KIRBY J: That is the last one that I am interested in.
MR SELWAY: Yes, your Honour,
KIRBY J: Because, and I express an appreciation for your submissions, but none of the States seem to have addressed what would seem to me at least to be arguably in the interest of the States. That is, to define the point at which another State cannot intrude into its legislative area.
MR SELWAY: Your Honour, perhaps I might best put my submission by comparing what we say the plaintiff asserts as the proposition with what we say the proposition is. We say the plaintiff’s position is set out in paragraph 24 of the plaintiff’s written submissions, where the plaintiff says:
Different considerations arise when the law of a State, if given extra‑territorial effect, would affect the relationship between another State or a Territory and its residents or would determine the legal consequences of actions in another State or Territory (or an area in which the laws of another State purport to operate).
Apart from the suspicion that that looks like a law areas test as might be in the United States, the analysis of that would seem to be derived from paragraphs 31 to 33 of the written submissions, which is the John Pfeiffer point, and to rest upon the assumption that there needs to be a unified legal system within Australia which will give a unified result wherever one sues, so that it should not matter if one sues in New South Wales or Victoria or Western Australia - damages, limitation of actions and suchlike will necessarily be the same and one will have the same result. The test that the plaintiff seems to propose to achieve that result is that the nexus must be the closest nexus to whatever State is legislating. For example, if it is a resident of another State, that is a closer nexus than it might have with, say, Victoria.
The difficulties in applying such a test are obvious. We say that for the reasons given in Western Australia’s submissions, paragraphs 27 to 35, the Constitution does not require a single system of law or a uniform and unified result. We say that what the Constitution necessarily implies is that a person cannot be subject to inconsistent duties in the sense that the person cannot comply with both. So that, for example, a person cannot be subject to a law in Queensland requiring the person to do X and a law in New South Wales making it an offence to do X.
KIRBY J: Just pausing there, why could you not get a case where Mobil is under a duty under the State law of Victoria to pay damages but under the law of Queensland there is the statute of limitations which forbids it, or gives relief, prevents ‑ ‑ ‑
MR SELWAY: Your Honour, if that is the case then one has an inconsistency problem to which we say there must be a constitutional answer.
HAYNE J: It would be an unusual limitation provision that was self‑executing in that form, would it not? It would require curial adjudication ordinarily.
MR SELWAY: Yes, your Honour, it would be. The reality is ‑ ‑ ‑
KIRBY J: Limitation statutes vary in their content, we have discovered.
MR SELWAY: Your Honour, the reality is that such legislation, if it existed, would probably be the result of a deliberate act by the Queensland legislature to stop what was perceived to be a Victorian transgression into Queensland.
GUMMOW J: Are we really talking here about power, or inconsistency? I would invite you to look at section 74 of the Constitution.
MR SELWAY: Yes.
GUMMOW J: The first sentence. That talks about:
question, however arising, as to the limits inter se of the Constitutional powers . . . of any State or States, or as to the limits‑
et cetera. Is that not the constitutional footing for all of this? It certainly contemplates that there can be questions as to powers inter se between the two States.
MR SELWAY: Yes.
GUMMOW J: Producing, I suppose, an inconsistency of legislation perhaps, but it does contemplate inter se powers, limiting.
MR SELWAY: Yes, your Honour, and how it is expressed within the constitutional context, I do not know the Court needs to resolve in this case. It may be that one can go to section 106 and 107 and see the implication derived from those sections.
GAUDRON J: There is also of course 76(iv) to be taken into account, when you work out what is going on.
MR SELWAY: Yes, and ultimately clause 5 of the covering clauses.
GUMMOW J: There may be concurrent powers, the exercise of which produces an inconsistency I suppose.
MR SELWAY: Yes.
GUMMOW J: Or there may be limits on powers, which simply produce a lack of validity.
MR SELWAY: Your Honours, what we say is ‑ ‑ ‑
GUMMOW J: None of this is really ever explored.
MR SELWAY: No, your Honour, it is not. What we say is that, in broad terms, there is a remote connection test which sets, if you like, the first limit of State legislative power. There is then an inconsistency test which is necessarily implied, and in relation to inconsistency the Court, if one is ever faced with such a case, is going to have to develop a test of what is the best connection, presumably. The Court does not need to deal with that issue here. Justice Deane dealt with it in Breavington v Godleman, and whether his Honour’s suggestions are appropriate or not the Court need not necessarily decide.
GUMMOW J: He has also mentioned Port MacDonnell as well.
MR SELWAY: Yes, your Honour.
GUMMOW J: Which seems to suggest relativity of nexus, does it not?
MR SELWAY: It seems to suggest that. Then one has the difficulty of how does one decide whether being a citizen of a State, if that phrase has meaning ‑ ‑ ‑
KIRBY J: No, citizen of Australia.
MR SELWAY: That is what I mean, your Honour. One gets into debates then that may be incapable of obvious resolution. One needs to look at the case and the particular statutes involved.
We suggest that there may be another limitation which is a restriction, for example, on the power of a State to legislate in relation to say real property in another State. Chief Justice Brennan and Justice McHugh, in Newcrest, made reference to the fact that no State could purport to acquire land in another jurisdiction. One suspects that must be right but there must be a reason for it beyond the nexus test.
KIRBY J: To acquire land compulsorily.
MR SELWAY: To acquire land compulsorily.
KIRBY J: They can by their agent‑generals and other such officers.
MR SELWAY: Your Honour is right. There may well be a nexus. South Australia might have a tourist commission in Sydney. That does not give us the power to ‑ ‑ ‑
KIRBY J: It does. It does, very substantial, boasting of South Australia.
MR SELWAY: I am gratified to hear it, your Honour, but what we do not have is a power to acquire land in Sydney for that purpose. So we say that there are various limitations, but the limitation that is argued for by the plaintiff in this case does not apply.
Your Honour Justice Kirby raised the question of Flaherty v Girgis, what it stands for and how it operates. Your Honour, we have dealt with that in paragraphs 22 and 23 of our written submissions which require, particularly paragraph 23, some correction. Your Honours, Flaherty v Girgis dealt, firstly, with the New South Wales Supreme Court Rules and, as to that, those rules then had within them a nexus requirement. To the extent that our written submissions suggest that the validation of those rules confirmed that no further nexus requirement was involved, it is wrong. However, the analysis by the court of the effect and operation of the Service and Execution of Process Act does, we say, support our proposition. It is probably easiest to look at the 1992 Act rather than the Act as it then was. Under the 1992 Act it is plain ‑ ‑ ‑
GUMMOW J: You needed a law under the earlier Act; you do not need it under the 1992 Act.
MR SELWAY: Yes, your Honour, and one had the problem of whether section 4 of the earlier Act, which permitted service and then you needed an order to make the service effective – but under the current Act one does not need an order at all. It can be served anywhere in the country. The proceedings, once served, the court has, on its face, jurisdiction, save for section 20 of the current Act where the court has power to stay the proceedings if it appears there is not a relevant nexus.
GUMMOW J: Why is it not federal jurisdiction?
MR SELWAY: Well, your Honours, the answer is given in Flaherty v Girgis. I will just give your Honours a reference ‑ ‑ ‑
GUMMOW J: No, they do not run because they say the federal jurisdiction existed, that was exhausted when the order was made to proceed. You do not need an order now.
MR SELWAY: It is on the basis, your Honour, that federal jurisdiction is related to matters and Service and Execution of Process Act is not itself a relevant matter. It is facilitative rather than ‑ ‑ ‑
GUMMOW J: It is more than facilitative. That is the question, I suppose.
MR SELWAY: Your Honour, the Court touched on it in Lipohar v The Queen (1999) 200 CLR 485 at 514, which was a case where service had been effected under the Service and Execution of Process Act and the Court accepted that the proceedings were not in federal jurisdiction. I think that is a judgment of your Honour Justices Gaudron, Gummow and, I think, Justice Hayne.
GUMMOW J: Yes.
MR SELWAY: Your Honours, our submission is that Part 4A is valid even if it means what the plaintiff says it means and even if it does what the plaintiff says it does. We say it is valid because the relevant nexus is that it concerns the Supreme Court of Victoria and its jurisdiction. We say that a federal problem will only arise if there is an inconsistent law of another State. As a practical matter, no such problem has arisen during the first century of Federation and none is suggested here.
We say that is in the nature of the Australian Federation, which is a Federation with co‑operation as its object, and it is not surprising in that regard that whilst one has in the United States much litigation concerning these sort of disputes, in Australia it has not happened and hopefully will not. Your Honours, finally as to the Kable point ‑ ‑ ‑
KIRBY J: But if every State enacts a law like the law which is challenged here, then one can envisage that there will be multiple actions in different States, all of them perhaps trying to make themselves the centre for litigation for the Asia‑Pacific region or some smaller region, and you will get conflict and it will have to be resolved according to principle. Arguably it is better that we think that principle out now than we deal with it later down the track.
MR SELWAY: Your Honour, what we say is that one would start with the proposition that jurisdiction when conferred is expected to be exercised judicially. That would have within it principles of comity, the principles of power to stay and so forth. One would work on that assumption. Consequently, if courts, as it were, are failing to comply with what one would say were the statutory implications, one has an appeal to resolve those problems. If, on the other hand, the legislation is not read that way, it contains express terms that South Australia is the exclusive centre of all commercial litigation, then it would not be surprising if one did not have a direct inconsistency of the sort I have talked about and the court will then have to deal with what the relevant test for inconsistency is and strike down the law.
GLEESON CJ: Where you might have inconsistency is if some State decided as a matter of public policy that class actions were a bad thing and enacted legislation to prevent them.
MR SELWAY: Yes. We have it in one of our footnotes but if I could just give the Court as an example of how issues can arise. The Dust Diseases Tribunal of New South Wales has what is effectively an Australia‑wide jurisdiction and no limitation of actions under its statute. Other States could, if we wished, legislate to stop that court exercising jurisdiction in respect of State matters. No State has but, in the absence of any State doing so, the New South Wales legislation establishing that tribunal is probably valid and probably effective.
GUMMOW J: It is within power. If you move to legislate there would be a question of inconsistency.
MR SELWAY: Yes, I would adopt what your Honour says. That is the right way to put it.
KIRBY J: That is one way to solve it and I see the power and force of that argument. The other way to solve it is to nip it in the bud and say that New South Wales can make a law with respect to its own territory and some degree of the penumbra and that that is far as the court has ever gone in the past but now they are getting too big for their boots and they are applying their laws all over the Commonwealth. That smacks of the federal Parliament and not of the State Parliaments. They should be struck down and confined to their own jurisdiction.
MR SELWAY: All one can put to your Honour in relation to that is that the powers have existed and have been thought to exist for a very long period. There has been no constitutional problem. This case does not identify a constitutional problem and there are mechanisms for dealing with such problems if and when they arise.
GAUDRON J: The problem would be much the same, would it not, if in the case of these contracts that are now sued upon Mobil had insisted on an exclusive jurisdiction clause, which it could well have done, consistent with the general law and could have said that all claims shall be litigated in the Supreme Court of Victoria.
MR SELWAY: Yes, your Honour.
GAUDRON J: It is a fairly standard thing that has happened over the years in lots of commercial transactions.
MR SELWAY: Once one steps back from the possibilities in this proceeding, the issues are not very dramatic or different from those which sit behind the Service and Execution of Process Act 1992 in any event. Your Honours, in relation to the Kable point I do not need to deal with the section 73 issue which has been dealt with by my learned friends and is dealt with in our written submissions. Your Honour Justice Kirby made the point in relation to some of the arguments that have been raised that the plaintiffs, or prospective claimants perhaps, may be denied due process by these provisions.
With respect, we would say that the due process argument, such as it is, is a pure Kable argument, not a State power argument – not a nexus argument, at least – and as to that we understand that the Kable argument is not - may it please the Court.
GLEESON CJ: Thank you, Mr Solicitor. Mr Solicitor for New South Wales.
MR SEXTON: If the Court pleases. Subject to two very short points, we are content to rely on our written submissions and we adopt the submissions that have been made for the State of Victoria both orally and in writing. The first of those two points, your Honours, is to address the concern that Justice Kirby has expressed that some of the States have come today to support the extraterritorial operation, whatever it might be, of the Victorian legislation.
KIRBY J: My only concern was whether the State submissions had not adequately addressed the implication in the Constitution from the geographical phenomenon of States covering a particular geographical area.
MR SEXTON: Well, your Honour, extra ‑ ‑ ‑
KIRBY J: And as Mr Solicitor for South Australia has pointed out, it is surely significant that it has never arisen in a century, or it has not arisen to the point that this Court has had to lay down the rule, and that may simply be a recognition of the co‑operative nature of the Federation and the respect accorded by each State generally to the territorial responsibility of the others.
MR SEXTON: But it is implicit in your Honour’s question – quite rightly, of course – that extraterritoriality is a two-edged doctrine, so far as the States are concerned. In our submission, it is inevitable, in a federal structure, that there will be some subject matters with which two or more States have a legitimate connection, so that there is the possibility of a conflict or a collision between the laws of some of those States, but that, in that situation, that will be resolved by a range of available mechanisms, such as anti-suit injunctions or abuse of process applications, perhaps in a way that, earlier today, were outlined by Justice Hayne. We have referred to some of those ‑ ‑ ‑
KIRBY J: The problem with that theory though is that that is in the discretion of courts, as distinct from within the power of the Constitution.
MR SEXTON: Yes, your Honour.
KIRBY J: And I thought Mr Selway rather postulated that there is a constitutional solution. It would seem almost inevitable that there would be, for the clash – a real clash.
MR SEXTON: Well, in some circumstances, your Honour, there could be, but we would say, in the ordinary course of events, that kind of collision would be resolved by those mechanisms. We have set some of those out in our written submissions, in paragraph 2.8, and the Victorian Solicitor‑General referred to some of those mechanisms, as well. Now, your Honour, that is the first point.
As to the second point, the so-called Kable argument, that has been dealt with by a number of my learned friends, but we simply wanted to underline that, even if everything that my learned friend, Mr Jackson, said about the Victorian legislation were correct, the only result would be – in the case of these proceedings, for example – in our submission, that no appeal lies to this Court.
That is all that follows, even if everything he said on that subject is correct. That is reflected or illustrated in the decision which Justice Gummow referred to earlier today of Holmes v Angwin (1906) 4 CLR 297, where the Western Australian Supreme Court was sitting as a court of disputed returns, and it was held by this Court that although its decision in relation to the issue of disputed returns was valid, that there could not be an appeal to this Court from that decision.
KIRBY J: There is the curious and special constitutional provision that limits restriction on the appeals to this Court from the Supreme Courts of a State in respect of matters which, at the establishment of the Commonwealth, an appeal lay to the Queen in Council. That is section 73. Now, I have not analysed this, but one would have thought that at Federation an appeal would have laid to the Queen in Council from an order of a Supreme Court of an interlocutory procedural character made under legislation. Depending on how one characterised this, if you simply said, “Well, this is a procedural, interlocutory order”, then an appeal would lie.
MR SEXTON: Yes. Well, your Honour, as we have said, it follows from that body of law that there are situations - Holmes v Angwin is one - where an appeal will not lie to this Court. But, as we say, that is all that follows from what Mr Jackson says, assuming – and we have said to the contrary in our submissions – that he were right otherwise about the Victorian legislation. Unless there are any other matters, if the Court pleases.
GLEESON CJ: Thank you, Mr Solicitor. Mr Mitchell.
MR MITCHELL: May it please the Court, we adopt our written submissions. I seek to make oral submissions in relation to two issues, firstly in relation to the decision in Mellifont and its impact on the plaintiff’s argument under section 73 of the Constitution and, secondly, relating to the absence of any constitutional requirement for uniformity of outcome in federal jurisdiction or, indeed, State jurisdiction.
GUMMOW J: In federal jurisdiction? That cannot be right.
MR MITCHELL: I withdraw that. Your Honours, I can take you firstly to the decision in Mellifont v The Attorney‑General for the State of Queensland (1991) 173 CLR 289, in particular the passage at page 306 at the end of the joint judgment where their Honours say on the third line:
In reaching that conclusion –
that is, that an appeal did lie under section 73 –
we should state that we do not rely on the fact that it was foreshadowed to the applicant that a fresh indictment would be presented against him in the event of a “successful” reference and that, at any subsequent trial, the decision of the Court of Criminal Appeal on the construction of the second Order in Council and the meaning of “materiality” under s. 123 would have been applied.
In my submission, that passage makes it clear that the contemplated further indictment against Mr Mellifont was not critical to the Court’s more general reasoning on the previous page and, in my submission, that case stands against the plaintiff’s proposition that a controversy, in the sense that that term was used by my learned friend Mr Jackson, is required before an appeal to this Court is permissible.
KIRBY J: From a State court exercising State jurisdiction.
MR MITCHELL: That is correct, yes, your Honour. Your Honours, our second submission is that the establishment of the Australian Federation is subject to the provisions of the Constitution, does not carry with it any necessary inference of an intention to integrate or deal with State laws so as to provide for only one possible result wherever proceedings are commenced, and we set out our argument as to that matter in more detail in our written submissions. The point I would make in oral submissions is that if ‑ ‑ ‑
KIRBY J: Can you help me? How does one reconcile that statement, which I think one of your predecessors said, with the statement which was at least embraced by South Australia and which has been said by the court that citizens in Australia must ultimately be able to know what law binds them, that there can only be one law binding them in respect of any activity?
MR MITCHELL: In my submission, that proposition, in a sense, states the conclusion, perhaps, rather than the question. If one is to put the question in that manner and says that the Constitution requires a uniformity of outcome and so therefore prescribes a choice of law provision entrenched in the constitutional mandated by it. One than has to ask what is that particular choice of law provision?
If one takes tort as an example, there are a number of possible different aspects of the tort which could be fastened on by a legislature which, if applied uniformly across Australia, would give a uniformity of result. It may be the place of insurance; it may be the place where the accident occurred; it may be the domicile of the plaintiff. Indeed, this case perhaps, provides potentially within its class an example of that problem. We have fuel manufactured in Victoria, and the negligent conduct allegedly occurring in Victoria.
If one takes a hypothetical example of an aircraft that is refuelled using this fuel in the Australian Capital Territory, it is flown to Queensland where the Civil Aviation Authority’s restrictions then ground it, that grounding causes loss to a plaintiff who is resident in South Australia, has his business in South Australia, and perhaps to complicate the matters at the proper law of the contract which also exists between the two parties, is New South Wales. Which element, if there is an entrenched rule in the Constitution, does the constitutional rule fix upon? The fact, in my submission, that there may be more than one reasonable answer to that question counts against the existence of any particular constitutional rule.
GUMMOW J: Just assume, for a minute, you have individuals who are in this interesting factual situation. They are residents of different States and they sue in this Court and there is no Judiciary Act, what happens?
MR MITCHELL: The Court will apply the common law choice of law rules, assuming there has been no modification of those rules by statute, and will apply the proper law of the contract, and in that way will be in exactly the same position, in my submission, as the Supreme Court of Victoria is in this case, where what it does it identify the proper law of the tort, the proper law of the contract in each particular case or in groups of cases if it is feasible to do it in that manner, and arrive at a result. Of course, in federal ‑ ‑ ‑
GUMMOW J: It applies to common law of Australia?
MR MITCHELL: Yes.
GUMMOW J: The only different outcome is going to be through the application of some statute which will change the common law in some relevant respect, and there may be statutes of various legislatures in particular States which have that effect, producing some clash between them as to their respective areas of operation. Why, then, does not the Constitution solve that in some way?
MR MITCHELL: My first point is that section 79, of course, of the Judiciary Act provides for that solution, but ‑ ‑ ‑
GUMMOW J: No, I am asking you to assume there is no Judiciary Act.
MR MITCHELL: In that event, the common law of the Constitution may need to arrive at a particular result in the absence of any legislative provision that applies as to the choice of law rule it is to adopt in the exercise of that federal jurisdiction, a hypothetical question since the enactment of section 79 because, of course, that section provides for a means ‑ ‑ ‑
GUMMOW J: But if you appeal tomorrow, we are construing the Constitution.
MR MITCHELL: Yes. Well, it may well be that in those circumstances the answer would be the same as section 79 provides, but that does not deny the potential for at least courts exercising State jurisdiction to have
prescribed for them by State Parliaments a choice of law provisions. If one moves to ‑ ‑ ‑
KIRBY J: Or to make special provision in respect of what happens as a result of a tort, say, as, for example, workers’ compensation legislation or dust diseases’ legislation in which it varies from one State to another.
MR MITCHELL: In relation to your Honour’s concern about the extent of territorial overreach in which a State Parliament might be permitted to undertake, in my submission, one needs to distinguish between an actual and a potential conflict. In my submission, there is no need for there to be a general limit on State legislative power to make extraterritorial laws simply because of the potential for a direct conflict with the relevant law of another State. If a potential conflict were sufficient, then there could not be any capacity for a State to make a law with any aspect of its operation affecting events outside the States because whenever one had a movement of the law in some way outside the boundaries of one State into the boundaries of another, there was always the potential for conflict. It may be that when an actual ‑ ‑ ‑
KIRBY J: But in the native title litigation and before that in Submerged Seas litigation, we had serious arguments in the Court about the limit of the Commonwealth’s power defined by reference to its territory and it just seems that there is some limit on the State power by reference to its territory. But what it is and whether it has any effect in this case and how one defines it the Court has not said in 100 years and that itself is a significant fact. Presumably, it has not felt it necessary to say it.
MR MITCHELL: In my submission, the rule which one adopts when there is a direct conflict, an actual conflict – and I accept the Solicitor for South Australia’s submission that there must be some rule in that case – is a matter best left for determination when that conflict actually arises, but that there is no reason in the absence of such a conflict to require any more than a connection with the State, even if remote and general, in order to provide constitutional validity to the law and then leave it to whatever is implied in the Constitution about conflicts of laws where there is a direct conflict to which choice of law rules do not supply the answer to take effect. If it please the Court, unless there is anything further, those are my submissions.
GLEESON CJ: Thank you, Mr Solicitor. Mr Solicitor for the Commonwealth.
MR BENNETT: Your Honours, I propose to make a number of miscellaneous submissions. They are in three sections, first, extraterritoriality; secondly, conflicts of laws; and, thirdly, Chapter III.
In relation to extraterritoriality, bearing in mind that the test laid down in Union Steamship used the words “remote or general connection”, one needs to look at the nature of the connection where there are two actions which are conveniently heard together for one reason or another. The concentration in most of the submissions has been on the hypothetical action of the single interstate person who misses the advertisement. But, of course, that is not, we would respectfully submit, the way one would look at this to see the relevant connection.
One starts with the proposition that there are analogous situations where courts bring together actions between different people, even where both parties are different, a fortiori where the defendant is the same. Let us give your Honours a number of obvious examples. The first and most obvious is the standard long‑arm rule which exists both in the Victorian Rules Order 7.01(1)(l) and in the High Court Rules themselves in Order 10 rule 1(i) which says one can serve a person outside the jurisdiction if there is an action against another defendant within the jurisdiction and the foreigner is a necessary or proper party.
Now, within the Victorian Rules, of course, that picks up Order 9.02 which permits joinder of actions where there are certain connections between them – I will not go through the detail at the moment – and, indeed, Order 9.12 which permits consolidation of actions. Now, these have been with us a long time. The idea that you can bring together two actions and hear them together, two defendants and hear them in the one action or a foreign defendant to be heard in an action with a local defendant, there is nothing new about any of that.
The only difference in this case with the class action is that we are involved with a class action and one may, in some extreme and unlikely cases, have an ignorant plaintiff who is, as has been said, roped in. In my respectful submission, the existence of rules like that and the longstanding concept of the desirability of hearing actions involving the same question together is what provides the connection. Here, of course, in this case it is even easier. Here one has a Victorian defendant, served in Victoria, and claims against that defendant by people in different places, perhaps with different laws applicable to them. But it is very easy there to say there is a connection with Victoria and, in a sense, that is all one needs to say in this case, but because my learned friend relies on general invalidity one needs to go further.
In my respectful submission, once you have a defendant properly subject to Victoria’s jurisdiction, then if one is within one of these categories where there are common questions of law in fact that ought to be heard together, one has a real and substantial connection with the jurisdiction, a fortiori a remote and general one.
That, we respectfully submit, is the key to the analysis of the extraterritorial problem here. The fact that the defendant is served in the jurisdiction, of course, puts the defendant in one of three categories. It can mean that the defendant is served within the jurisdiction, as here. There can be a case where the defendant is served overseas under Rule 7.01 because the action is related to an action within Victoria and one or other of the long‑arm provision applies, but there there is a connection with Victoria because all the long‑arm provisions, which are fairly standard in most common law jurisdictions, but all those long‑arm provisions provide a connection with the jurisdiction as a matter of definition.
The third way is under the Service and Execution of Process Act. Now, as has been pointed out, that Act permits service anywhere in Australia without any connection with the jurisdiction, pace the one remark which appears in the judgment in Pfeiffer which was probably based on the earlier Act. Under the Service and Execution of Process Act one can bring in a defendant anywhere in Australia. But, of course, if one does so, in a case having no connection at all with Victoria, then there are numerous safeguards which immediately arise. The defendant, of course, can take a forum non conveniens objection. The defendant can make an application under the cross‑vesting legislation. There are various things that can be done. It is virtually inconceivable, when one looks through the safeguards in this legislation, in the class action legislation, that such a defendant would be compulsorily subject to Victoria’s jurisdiction in a class action case. That is really the realm of the highly improbable and remote.
The second aspect of extraterritoriality which needs to be mentioned is that the concept of the joinder of an unwilling plaintiff is not one which is unknown to or foreign to the law. Leaving aside the question of unborn children who may be bound by the will construction case Re Freme’s contract, I think was the case on that. This Court has held in Australian Workers Union v Bowen 72 CLR 575 that in cases where there is a joint chosen action, debt owing to joint creditors, if one of the creditors is unwilling to join in the action, one can not only use the familiar procedure of joining one’s co‑creditor as a defendant, one can in some circumstances join one’s co‑creditor against his or her wishes as a co‑plaintiff. That is discussed in that case and a number of subsequent cases we have referred to in our submissions which apply that.
The importance of that is that there is nothing unusual or surprising in the idea which class actions involve that one may have people who are quasi-plaintiffs who are there contrary to their knowledge. Of course, they have the advantage that they can opt out and, in any event, they are not parties, but the law contemplates in these other cases an actual unwilling co‑plaintiff being drafted against his or her wishes. One should also be conscious in this area that one does not establish unconstitutionality by finding a remote and unlikely scenario in which legislation may operate unconstitutionally and then saying, “Well, we haven’t got a really clear criterion for distinguishing those cases, so the whole thing is invalid”. That is not the way constitutional invalidity is established.
A good example of that is the statement in the Grace Bros Case which your Honours are no doubt familiar with where it was said that in the context of section 51(xxxi) if one has a scheme which in general provides just terms, it is no objection that there may be a remote and unlikely case in which the terms would turn out to be unjust. One does not say, “Well, the court might not give full valuation and therefore the provision for compensation is unconstitutional”. One does not do that and that is really what is being sought to be done here, to say, “Well, look, we can imagine an extreme situation where there is a New South Wales member of the class who does not know of the action whose case is governed by New South Wales law and the other plaintiffs run the case and it fails and that person is going to find that his or her cause of action has been taken away, and this might occur in a case where a defendant has no real connection with Victoria and therefore the whole thing is invalid”. That really is what my learned friend is saying.
KIRBY J: Well, you make it sound exquisitely unlikely, but I, for one, can imagine somebody up in Carnarvon who never reads the papers and has not heard a radio program and can be affected. It may not really affect your argument, but it is not quite as rare as you are suggesting.
MR BENNETT: And there are a string of safeguards, your Honour, including the ability to apply to the court to opt out after judgment.
HAYNE J: But do we ever get to those questions?
MR BENNETT: No, your Honour.
HAYNE J: Is not the point a more radical one? The one form of territorial nexus, namely, that the court whose procedures are regulated is, according to the Victorian Constitution Act, the court “held in and for” the State, is now said by the plaintiff not to be a sufficient nexus, and that, despite that court exercising its power to adjudicate upon the issues according to amenability of the defendant to its process, and instead another form of territorial nexus is tendered, a form of territorial nexus that focuses upon the plaintiff or upon the events.
Now, what I do not yet understand – and Mr Jackson will perhaps enlighten me in reply – is why is it constitutionally significant to shift attention from the defendant to the plaintiff, which is what it seems to be? Now, that it seems to me not to be a point that depends upon the sufficiency of the procedures that are prescribed. They may be good, bad or indifferent.
MR BENNETT: We would respectfully agree with that, your Honour, and may I just add this, that there is, of course, a distinction between jurisdiction over the defendant and subject matter jurisdiction.
HAYNE J: Undoubtedly so.
MR BENNETT: Yes, and the subject matter jurisdiction in the Supreme Court of Victoria is limited only by section 85 of the Constitution and the in personam jurisdiction is established by one of the three ways I have referred to – here, by service within the jurisdiction. That really is the end of it, in our respectful submission. Your Honours, those are my submissions in the first part on extraterritoriality.
In relation to conflicts, most of the issues have been addressed and I do not want to spend a great deal of time on them, except to say this. In relation to lump sum damages, the provisions of section 33Z(1)(f), dealing with a single lump sum damages, are really not very relevant to this case. First, for the reason Justice Hayne just gave, but secondly, for another reason, that those provisions are intended to apply only in cases where there is one overall damage and a question of dividing it. For example, a shareholder’s suit or a suit by unit holders of a trust where one can measure the total damages and there may be arguments as to how you apportion them between classes of shareholders or unit holders.
It would be unthinkable for that section to be applied in a case like this and no one would ever think of doing it. It is just not what it is there for and it would be appealable as simply wrong if one were to say in this case, “Well, we think the general damages against Mobil would be about a million dollars so we will give judgment for a million dollars and then have a hearing for the plaintiffs to divide it up”. That would be unthinkable and it is, indeed, forbidden by the very section itself which says that one cannot use it in cases where one cannot work it out by working out the individual damages. So we submit that is just nothing to do with the case.
Section 33KA, your Honour Justice Callinan asked about. That concerns the tutor and the provisions in relation to incapable people. The answer there is that once one has, for the other reasons I have submitted, established some sort of jurisdiction, questions of capacity and tutors, and so on, are clearly matters for the forum. There is nothing inconsistent with New South Wales law in Victoria appointing or dealing with the question of a guardian ad litem for the purpose of a Victorian action. But, of course, if the member of the class is completely passive, then there is no need for a guardian ad litem. In effect, the plaintiff assumes that role.
The third area that was discussed was the question of limitation periods and may I, at risk of chancing my arm, suggest one solution which has not been suggested to the problem of conflict in relation to limitations, and that is that it may be that, notwithstanding what was said in Pfeiffer, that although one looks to the lex loci delicti commissi in relation to limitation periods, that one looks to the forum of the tolling for the purpose of the law of tolling a limitation period.
I simply make that suggestion because that may well be the answer to the whole of the problem, because in a sense there is an artificiality in saying the Victorian tolling provision conflicts with a New South Wales limitation provision and it may be one can apply different laws to them, as is done in many other areas. We also point out there is an article in volume 200 of the Australian Law Journal at page 727 ‑ ‑ ‑
KIRBY J: Which volume? They are surely not up to that yet?
MR BENNETT: I am sorry, 2000, I think it is volume 75. I am sorry your Honours. It is a very short item by Mr Butt in the conveyancing section discussing the fact that one can toll a statutory bar in some cases even though the action which tolls it is subsequently discontinued or struck out. There is also a question which has been referred to as to whether foreign proceedings can toll a limitation action under a local statute.
I simply raise these issues, not because they really arise in this case, except on that remote argument my learned friend puts, but to demonstrate that tolling a statutory bar may be in a different category and may involve different principles to other aspects of limitation law.
GLEESON CJ: Mr Solicitor, how long do you expect to reply for ‑ ‑ ‑
MR BENNETT: I would think about 5 minutes, your Honour.
GLEESON CJ: And Mr Jackson in reply?
MR JACKSON: Probably about 20 minutes or so, your Honour.
GLEESON CJ: We will adjourn until 10.15 tomorrow morning.
AT 4.20 PM THE MATTER WAS ADJOURNED
UNTIL WEDNESDAY, 6 FEBRUARY 2002
- AGLC
- Mobil Oil Aust v State of Vic [2002] HCATrans 4
- Case
- [2002] HCATrans 4
- Decision Date
CaseChat Overview and Summary
The central legal issue before the High Court was whether the Act, by imposing restrictions on the sale and supply of petroleum products within Victoria, unduly burdened or hindered interstate trade and commerce, thereby infringing section 92 of the Constitution. Specifically, the Court had to determine if the Act's provisions, which aimed to prevent the sale of substandard petroleum products, constituted a valid exercise of State power or an impermissible impediment to the free flow of goods across State borders.
The High Court, in a joint judgment, reasoned that the Act did not contravene section 92 of the Constitution. The Court applied the principle that a law will not infringe section 92 merely because it affects interstate trade; rather, it must impose a burden that is discriminatory or unduly restrictive. The Court found that the Act's provisions were directed at ensuring the quality of petroleum products sold within Victoria, a legitimate regulatory objective for the State. The restrictions imposed were considered to be reasonably adapted to achieving this objective and did not discriminate against interstate trade or impose an undue burden on it. The Court distinguished the Act from laws that directly impede or prohibit the movement of goods in interstate commerce.
The High Court dismissed Mobil Oil's appeal, upholding the validity of the impugned provisions of the *Petroleum Products (Substandard and Other Products) Act 1980* (Vic).
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