MARCUS WILLIAM AYRES, STEPHEN JAMES PARBERY AND MICHAEL ANDREW OWEN IN THEIR CAPACITIES AS LIQUIDATORS OF QUEENSLAND NICKEL PTY LTD (IN LIQ) & ORS DEFENDANTS
Matter No B55/2016
IAN MAURICE FERGUSON PLAINTIFF
AND
MARCUS WILLIAM AYRES, STEPHEN JAMES PARBERY AND MICHAEL ANDREW OWEN IN THEIR CAPACITIES AS LIQUIDATORS OF QUEENSLAND NICKEL PTY LTD (IN LIQ) DEFENDANTS
Palmer v Ayres Ferguson v Ayres
[2017] HCA 5
Date of Order: 10 November 2016 Date of Publication of Reasons: 8 February 2017 B52/2016 & B55/2016
ORDER
In each matter:
1.The question reserved for the consideration of the Full Court pursuant to s 18 of the Judiciary Act 1903 (Cth) is answered as follows:
Question:Is s 596A of the Corporations Act 2001 (Cth) invalid as contrary to Chapter III of the Constitution in that it confers non-judicial power on federal courts and on courts exercising federal jurisdiction?
Answer:No.
2.The writ of summons is dismissed.
3.The plaintiff pay the defendants' costs.
Representation
D F Jackson QC with L T Livingston and L M Jackson for the plaintiff in B52/2016 (instructed by JW Smith & Associates)
P Zappia QC with N H Ferrett and T R March for the plaintiff in B55/2016 (instructed by Haseler Law)
T P Sullivan QC with C M Muir and A C Stumer for the first defendants in B52/2016 and the defendants in B55/2016 (instructed by King & Wood Mallesons)
B W Walker SC with C G C Curtis for the second defendants in B52/2016 (instructed by HWL Ebsworth Lawyers)
T M Howe QC, Acting Solicitor-General of the Commonwealth with J A Watson and R J May for the Attorney-General of the Commonwealth, intervening (instructed by Australian Government Solicitor)
P J Dunning QC, Solicitor-General of the State of Queensland with A D Keyes for the Attorney-General of the State of Queensland, intervening (instructed by Crown Law (Qld))
R M Niall QC, Solicitor-General for the State of Victoria with B C Gauntlett for the Attorney-General for the State of Victoria, intervening (instructed by Victorian Government Solicitor)
C D Bleby SC with W V Ambrose for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor (SA))
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Palmer v Ayres Ferguson v Ayres
Constitutional law (Cth) – Judicial power – Mandatory examination of persons about corporation's examinable affairs – Where plaintiffs former directors of corporation in voluntary liquidation – Where liquidators applied for and obtained order for issue of summons under s 596A of Corporations Act 2001 (Cth) requiring plaintiffs to attend for examination about corporation's examinable affairs – Whether s 596A invalid as contrary to Ch III of Constitution – Whether s 596A gives rise to "matter" that engages judicial power of Commonwealth – Whether power conferred by s 596A incompatible with or outside judicial power of…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Palmer v Ayres [2017] HCA 5
Case
[2017] HCA 5
Decision Date
CaseChat Overview and Summary
In *Palmer v Ayres*, the plaintiffs, former directors of a corporation in voluntary liquidation, challenged the validity of summonses issued under section 596A of the *Corporations Act 2001* (Cth). These summonses required them to attend for examination concerning the corporation's examinable affairs. The challenge was brought before the High Court of Australia, with Kiefel, Gageler, Keane, Nettle, and Gordon JJ hearing the matter.
The central legal issue before the High Court was whether section 596A of the *Corporations Act 2001* (Cth) was invalid by reason of being contrary to Chapter III of the Australian Constitution. Specifically, the plaintiffs contended that the section conferred non-judicial power on federal courts and courts exercising federal jurisdiction, thereby infringing upon the separation of judicial power. This raised questions as to whether the power conferred by section 596A gave rise to a "matter" that engaged the judicial power of the Commonwealth, and whether that power was incompatible with or outside the scope of the judicial power.
The High Court unanimously held that section 596A of the *Corporations Act 2001* (Cth) was not invalid. The Court reasoned that the examination process contemplated by section 596A, while inquisitorial in nature, did not involve the exercise of judicial power in a manner that contravened Chapter III of the Constitution. The power to compel attendance for examination and to require the production of documents was found to be a procedural power incidental to the administration of the winding up of a company, rather than a determination of rights and liabilities in a manner characteristic of judicial power. The Court distinguished the present case from those where the exercise of power by a court or its officers might be seen as usurping the judicial function.
Consequently, the High Court answered the reserved question in the negative, finding section 596A to be valid. The Court ordered that the writ of summons be dismissed and that the plaintiffs pay the defendants' costs.
Orders
Orders of the court
In each matter:
1. The question reserved for the consideration of the Full Court pursuant to s 18 of the Judiciary Act 1903 (Cth) is answered as follows:
Question: Is s 596A of the Corporations Act 2001 (Cth) invalid as contrary to Chapter III of the Constitution in that it confers non-judicial power on federal courts and on courts exercising federal jurisdiction?
Answer: No.
2. The writ of summons is dismissed.
3. The plaintiff pay the defendants' costs.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
KIEFEL, KEANE, NETTLE AND GORDON JJ
GAGELER J
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Established by:
KIEFEL, KEANE, NETTLE AND GORDON JJ,
GAGELER J