Palmer v Marcus William Ayres, Stephen James Parbery and Michael Andrew Owen in their Capacities as Liquidators of Queensland Nickel Pty Ltd (In Liq) & Anor; Ferguson v Marcus William Ayres, Stephen James Parbery...

[2016] HCATrans 265

[2016] HCATrans 265

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B52 of 2016

B e t w e e n -

CLIVE FREDERICK PALMER

Plaintiff

and

MARCUS WILLIAM AYRES, STEPHEN JAMES PARBERY AND MICHAEL ANDREW OWEN IN THEIR CAPACITIES AS LIQUIDATORS OF QUEENSLAND NICKEL PTY LTD (IN LIQ) ACN 009 842 068

First Defendant

JOHN PARK, STEFAN DOPKING, KELLY-ANNE TRENFIELD AND QUENTIN OLDE IN THEIR CAPACITIES AS GENERAL PURPOSE LIQUIDATORS OF QUEENSLAND NICKEL PTY LTD (IN LIQ)

Second Defendant

Office of the Registry
  Brisbane  No B55 of 2016

B e t w e e n -

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) ACN 009 842 068

Defendant

KIEFEL J
GAGELER J
KEANE J
NETTLE J
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 10 NOVEMBER 2016, AT 10.16 AM

Copyright in the High Court of Australia

____________________

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friends, MR L.T. LIVINGSTON and MS L.M. JACKSON, for the plaintiff in B52 of 2016.  (instructed by JW Smith & Associates)

MR P. ZAPPIA, QC:   If the Court pleases, I appear with MR N.H. FERRETT and MR T.R. MARCH in action B55 of 2016.  (instructed by Haseler Law)

MR T.P. SULLIVAN, QC:   If it please the Court, I appear with my learned friends, MS C.M. MUIR and MR A.C. STUMER for the first respondent in both actions.  (instructed by King & Wood Mallesons)

MR B.W. WALKER, SC:   If it please the Court, I appear with my learned friend, MR C.G.C. CURTIS for the second defendants in B52 of 2016.  (instructed by HWL Ebsworth Lawyers)

MR T.M. HOWE, QC, Acting Solicitor‑General of the Commonwealth of Australia:   If it please the Court, I appear with my learned friends, MR J.A. WATSON and MR R.J. MAY, for the Attorney‑General of the Commonwealth intervening in both matters.  (instructed by Australian Government Solicitor)

MR P.J. DUNNING, QC, Solicitor‑General for the State of Queensland:   May it please the Court, I appear with my learned friend, MR A.D. KEYES, for the Attorney‑General for Queensland intervening in each matter.  (instructed by Crown Law (Qld))

MR R.M. NIALL, QC, Solicitor‑General for the State of Victoria:   May it please the Court, I appear with my learned friend, MR B.C. GAUNTLETT, for the Attorney‑General for Victoria today.  (instructed by the Victorian Government Solicitor)

MR C.D. BLEBY, SC:   May it please the Court, I appear with my learned friend, MR W.V. AMBROSE, for the Attorney‑General for South Australia intervening in both matters.  (instructed by Crown Solicitor (SA))

KIEFEL J:   Yes, Mr Jackson.

MR JACKSON:  Your Honours, the issue arising is that stated as Order 4 in the question reserved book at page 23, namely whether section 596A of the Corporations Act 2001 confers non‑judicial power on federal courts or State courts exercising federal jurisdiction. At the heart of the case, in our submission, is the extent to which “history” – if I could put that word in inverted commas for the moment – may be taken into account in determining whether the conferral by the Commonwealth of powers on federal or State courts is conferral of federal jurisdiction in terms of Chapter III.

Your Honours, may I go immediately to the terms of the provision, the validity of which is sought to be impugned in these proceedings. Your Honours will see that by section 596A:

The Court –

and the term “Court” is a federal or State court referred to in the definition of that term in section 58AA –

is to summon a person for examination -

The expression “is to summon” suggests obligation on the part of the court to comply with the request.  It is not a question of the court being empowered to do so; the court is required to do so.  One can see that, in a sense, by comparison with the language of the immediately succeeding provision, section 596B, where the court is given a discretion. 

The subject matter of the examination under section 596A is to be the examinable affairs of a corporation and the term “examinable affairs” is one which is defined very widely by a combination of three provisions. They are the definition of that term in section 9, the extension of it in section 53 and the reference to “a connected entity” in sections 9 and 64B. Your Honours, these provisions are, I think, summarised in our written submissions.

Your Honours, the persons who may be the subject of an order for examination are those holding or who have held the position of officers or provisional liquidators of a corporation during the periods that are referred to in section 596A(b)(i). “Officer” is itself a term defined by section 9, and those who may apply for an order under section 596A, are persons described as “eligible applicant”. That also is a term defined by section 9 and it includes “a liquidator”.

Your Honours, if I could go for a moment to section 596C, your Honours will see that unlike the position in relation to section 596B, there an application under section 596A does not have to be supported by affidavit, and your Honours it is clear from the provisions of the Corporations Act that the examination contemplated by section 596A is one which is to be conducted by the court and, your Honours, that can be seen from section 596D(1). It requires the person:

to attend before the Court . . . to be examined –

And, your Honours, from section 597(5B), that provision specifically contemplates that the court has the power to determine questions ‑ about the questions about the corporation or its examinable affairs that may be put.

I have taken your Honours quickly through those provisions, but your Honours will see them set out more fully in our written submissions. May I come next to the nature of the activity engaged in by the court in relation to an examination under section 596A. Your Honours, might I note in passing that the respondents and the interveners place reliance upon various provisions of sections 596F and section 597.

Could we just say this - that under section 596A the person is summoned for examination and the purpose of the examination is to find out information about the company or about its examinable affairs. Your Honours, one sees that referred to in, for example, the first defendant’s submissions - if I could take your Honours to that for a moment, paragraph 64 - where propositions are put that:

A liquidator assumes his or her role with very little knowledge or idea of the affairs of the company.

Your Honours will see the remaining matters in paragraph 64, but the object is, to put it shortly, to find out information about the company and about its examinable affairs. Your Honours, in our submission, the nature of the proceedings contemplated by section 596A was accurately summarised by Justice Gaudron in Gould v Brown (1998) 193 CLR 346 at 404, first of all in paragraph 67. Your Honours will see in paragraph 67, the second sentence, her Honour said:

It is a power divorced from the determination of any justiciable controversy.  It is not directed to the determination of existing rights or liabilities.  Nor is it directed to the determination of guilt or innocence or the imposition of punishment for breach of the law.  It is unrelated to the making of any binding decision as to existing powers, duties or status.  And it is not associated with the conferral or adjustment of rights or interests in accordance with legal standards.  It is simply a power to obtain information.  As such, it is not judicial power.  However, that is not to say that the power to examine witnesses in relation to the affairs of a corporation can never be conferred on a federal court.

Your Honours will see that, in paragraph 68, her Honour referred to the fact that there had been “bankruptcy of individuals and the insolvency of companies” and then went on to say, if one goes to paragraph 70:

It is convenient to proceed on the assumption that the power to examine witnesses in relation to the examinable affairs of a corporation may validly be conferred on a federal court if it has ordered that that corporation be wound up or if proceedings have been instituted in that court for its winding up.  Even on that assumption, however, it must be concluded that, to the extent that the power conferred by Ch 5, Pt 5.9 is not confined to examination by a court which has exercised or is exercising jurisdiction to make an order for the winding up of the corporation, it is not properly characterised as judicial power.

Now, your Honours, to similar effect is what was said by Justice French in the Federal Court in Highstoke Pty Ltd v Hayes Knight Pty Ltd (2007) 156 FCR 501 and the relevant reference is at page 533 and, your Honours, if one goes to paragraph 106 of his Honour’s reasons – I am going to refer to paragraphs 106 to 108 – he said:

Divorced from association with a judicial proceeding nothing about the examination power under the Corporations Act marks it as judicial in character. 

Your Honours will see the remainder of what he says in paragraph 106, and then it is said in paragraph 107:

The examination power taken alone, in the sense used above, is not an exercise of judicial power nor, taken alone, is it judicial when exercised by a court.  It can only be accommodated within the exercise of judicial power if incidental to it or justified by historical usage.

Now, your Honours will see a further discussion by his Honour there and he refers to Dalton, a case to which I will come shortly, but goes on in paragraph 108 to say:

The above passage states no new principle and indeed refers generally in a footnote to the discussion by Dixon CJ and McTiernan J in R v Davison 90 CLR 353. But to say that the courts have historically exercised investigative functions does not mean that all investigative functions conferred on a court, absent relevant historical antecedents or analogues, are to be regarded as judicial if not otherwise incidental to the exercise of judicial power.

Your Honours will see the last sentence of that paragraph.  Thirdly, your Honours, and this is the last of these three references I give, could I go to what was said by President McLure in Saraceni v Jones (2012) 42 WAR 518 at page 536, paragraphs 84 through to 86. Now, her Honour referred at paragraph 84 to the classic statement of “judicial power stated by Griffiths CJ in Huddart, Parker” and your Honours will see that there stated.  Then her Honour goes on to say in paragraph 85:

As subsequently explained, the elements of the test are:  (a) a controversy . . . about existing rights and liabilities . . . resulting in a final, binding and authoritative determination . . . This is the “core” of judicial power.  There are also “process” requirements to which I will return.

Then her Honour said in paragraph 86:

The examination power . . . does not fall within the “core” category.

Then the basis of the case:

It is accepted by all parties that it will only be within the judicial power of the Commonwealth if it is relevantly the same as or analogous to a power historically or traditionally conferred on courts or is incidental for the exercise of judicial power. That is where the consensus ends. 

Your Honours, I mentioned before that the submissions of our learned friends and the parties and interveners have relied also on the provisions of section 596F and section 597 as indicating the extent to which control over the examination is maintained by the court and that in consequence this shows that the process is an appropriate one to be carried on by the court. If I could take your Honours to section 596F for the moment, your Honours will see that:

the Court may at any time give one or more of the following –

and then your Honours will see the directions that can be given and you will see in section 597 various matters that relate to such an examination but, your Honours, could we just say that provisions that are similar to those of sections 596 and 597 are very common in legislation conferring inquisitorial or investigative functions on bodies which are clearly non‑judicial. 

An obvious example is the Royal Commissions Act 1902 (Cth) and, your Honours, could we give your Honours – I think we have given to your Honours’ associates a comparative table of provisions of section 596F and 597 on the one hand and of the Royal Commissions Act on the other and also comparative references to the Australian Crime Commission Act. 

Your Honours, I do not think I need to go to the detail of it but your Honours will simply see the cross‑referencing of similar provisions. To put it shortly, in our submission, none of the provisions relied on by the respondents on the basis of sections 596F or 597 affect the core nature of the 596A function as being investigative. It remains a power to obtain information albeit compulsorily.

KIEFEL J:   It is put against you that it is part of the supervisory jurisdiction of the court in relation to the external affairs of companies.

MR JACKSON:   Your Honour, to say “supervisory jurisdiction”, if I may say so, with respect, is a phrase which assumes a jurisdiction, in effect.

KIEFEL J:   Well, say the supervision then of the external control of companies.

MR JACKSON:   Well, your Honour, the position is, of course, that if you take companies that are put into liquidation by an order of the court then it is easier to say that in circumstances of that kind the court is able to participate in one fashion or another in relation to the final winding‑up of the company and the events on the way.

GORDON J:   Does that concession also extend to appointment of a liquidator rather than the winding‑up itself?

MR JACKSON:   In our submission, not, your Honour.  All that you have – could I just preface what I am about to say by saying one thing, that the assumption that section 596B, for example, would be good to the extent to which it follows a winding‑up by the court, or 596A similarly, is perhaps a large assumption because if one is looking at the nature of the power, if the power is purely investigative, the fact that it is done in order to take steps in a winding‑up does not carry with it the necessary consequence that it is itself a judicial power.

One is seeking to rely on something outside the power and in this case the only contact with the court relevantly has been that, to put it shortly, a liquidator was appointed in addition to the original liquidators appointed.  Your Honours, in our submission, that is not something which, by itself, brings into play a further jurisdiction of the court.  Your Honour may take a different view on that, but that is the ‑ ‑ ‑

KIEFEL J:   Is it the special purpose liquidators you are talking about?

MR JACKSON:   Yes.

KIEFEL J:   But the court has to exercise its mind in relation to the appointment of liquidators of that kind.

MR JACKSON:   I accept that, your Honour, but having done so it is a question then of what the provisioning question is dealing with, and the provisioning question here is 596A, which says that a liquidator – to put it shortly – may apply for and be granted an order for examination by the court.  It may apply for and, if the liquidator does apply for, is to be granted an order by the court for an examination by the court.

What we say is that no matter really how one gets there, the true situation is that the power being exercised and the power being sought to be conferred by the application under section 596A is a power the nature of which is purely investigative and not traditional. Your Honour, I am beating ‑ ‑ ‑

KIEFEL J:   Yes.

MR JACKSON:  Your Honours, could I just say that some of the submissions put against us contain the suggestion in effect that it is good enough for section 596A to be a provision which allows an examination, albeit one which is compulsory. In our submission, that is erroneous. May I come to that in just a moment?

Could I move next to the possible constitutional bases suggested for the validity of provisions purporting to confer federal jurisdiction in the first place. I leave aside section 122 altogether. And, your Honours, may I be forgiven for taking a moment to say some very obvious things about the Constitution and in particular about Chapter III.

Your Honours, it is clear, of course, that by section 596A the Corporations Act purports to confer or invest jurisdiction on federal and State courts.  It is now a law of the Commonwealth and in order to find the ability of the Commonwealth so to do one has to go to Chapter III.

One sees in section 71 that it identifies the courts that have or may have federal jurisdiction vested or invested in them.  But, your Honours, the judicial power as referred to in section 71 is not a concept which in any relevant sense is an abstraction, living separately and apart, as it were, from the succeeding provisions of Chapter III because the succeeding provisions of Chapter III set out the jurisdiction in which, or in relation to which, the judicial power is capable of exercise and that can be seen in the case of this Court’s appellate jurisdiction in section 73 and the case of original jurisdiction in section 75 and 76 and, your Honours, the jurisdiction which may be vested in federal courts and invested in the courts of a State is stated in paragraphs 75 and 76.

Your Honours, there are two paragraphs of those provisions which are potentially relevant. The one immediately relevant is section 76(ii), matters:

arising under any laws made by the Parliament ‑

I should mention the second, although it is not attracted in this case: it is section 75(iii) and it may be apposite in cases where ASIC is an eligible applicant and on the basis that it is to be regarded as the Commonwealth. But, your Honours, in each case there does have to be a matter and in the present case one has to identify the matter to ask in the context of section 76(ii), what is the matter arising under the Corporations Act.

Now, your Honours, the ambit of the terms to which I have been referring was discussed recently by the Court in CGU Insurance Ltd v Blakeley (2016) 90 ALJR 272. Could I go to the reasons for judgment of the Chief Justice and your Honours Justice Kiefel and Justice Bell and Justice Keane at page 279, paragraph [26]? Your Honours will see in paragraph [26] in the opening five lines that:

It is a necessary condition of federal jurisdiction . . . that the matter in which the jurisdiction of the court is invoked is “capable of judicial determination” or “justiciable”.  That concept of justiciability does not embrace a purely advisory opinion.

Your Honours will see the reference to the Judiciary and Navigation Acts Case.  That is followed, your Honours, by the qualification towards the bottom of the page about truth about Motorways where it was held that any member of the provision, allowing any member of the public to seek a declaration was perfectly valid.  Your Honours, I have to say the argument to the contrary was somewhat difficult in the light of public informers over many years but however.

Then, your Honours, one sees that at paragraph [27] there is a reference to the two elements of matter in the quotation from Mr Burmester.  Then, your Honours, it may be that the first of those elements – that is, arising under a law of the Commonwealth – is satisfied because section 596 is a law of the Commonwealth and confers the right to apply for the order.  But, as the concluding sentence of paragraph [29] says, if I could go to that, your Honours:

the claims in the proceeding must not only satisfy the subject matter requirements, but involve a justiciable controversy or otherwise fall within an established category of judicial power.

The reference to an established category of judicial power is to footnote 26 – and that is to the decision in Davison and, in particular, to the observations of Chief Justice Dixon and Justice McTiernan. May I take your Honours to that case (1954) 90 CLR 353 at 368. Your Honours, Davison is much relied on by our learned friends as providing the basis for saying that, in effect, history is enough.  I am putting that very shortly but your Honours will understand the proposition.

Your Honours, the question in Davison was whether the making of a sequestration order in the case of voluntary bankruptcy was the exercise of judicial power.  It was held that it was the exercise of judicial power and, if we may say so with respect, not surprisingly.  That was because the making of such an order affected rights and obligations.  It took away the bankrupt’s status and his powers in relation to his property.  It took away some of his liberty of action and exposed the bankrupt to possible criminal prosecutions.  It took away the ability of his creditors to pursue their claims as they might have done before.

Your Honours, if I could just pause to say that was the actual argument that was put in the case.  The emphasis was on that aspect of the matter.  Your Honours will see that at page 357, about point 2 on the page, fourth line:

The making of a sequestration order involves a determination which has the effect of depriving the bankrupt of his property –

and so on.  Your Honours, at page 358, about point 2, you will see a reference to the consequences that flow from such an order and so on.

KIEFEL J:   Do you say in the present case that the conduct of an examination under the auspices of a court has no consequences for the person examined?

MR JACKSON:   Well, your Honour, no consequences are in relation to the person’s rights.  The examination does not itself have any effect.1

KIEFEL J:   But it could have.

MR JACKSON:   It could result in further things happening.  It could result.

KIEFEL J:   Depending upon the conduct of the witness, it could have consequences for the witness?

MR JACKSON:   Well, is your Honour speaking of not answering questions or – well, I suppose so, your Honour, that is certainly true, yes.

KIEFEL J:   It has no consequences for the company?

MR JACKSON:   Well, not for the company as such, your Honour, because it is an examination to obtain information.  The obtaining of the information may lead to something.  It may lead to nothing.  It may – but it is an examination.  Of course, as with – if one were conducting a royal commission or a commission of inquiry and the witness misbehaved you would expect the witness to be dealt with either by reference for contempt - it creates a similar liability but the nature of proceeding is not judicial.

KEANE J:   But is there not an anterior matter in relation to the assertion – or in relation to the question whether someone, a former director or a director in the position of your client, is entitled to maintain his right to the privacy of his papers and his right to silence?  Is that not in question?  Is that not what the controversy is about?

MR JACKSON:   Your Honour, in one sense it is, I would accept that, your Honour, but that question is one which is being dealt with by a proceeding which we would submit is investigative in nature, it is investigating things as distinct from deciding whether any of those – any consequences followed from examination. 

KIEFEL J:   Well, it is permitting an investigation in a similar way to preliminary discovery permits an examination in aid of the pursuit of rights which might be brought before a court.  I am taking you out of sequence, I think.

MR JACKSON:   No, your Honour, may I just say something about that because in relation to preliminary discovery and if one takes, for example, the provisions of the Federal Court legislation which, I think, are rules 7.23 and 7.24, something like that, what you see in relation to them is that they have to be, on the one hand, in order to identify the name of someone, a defendant in a potential matter.  On the other hand they have to be – seek to identify an element, in effect, in a cause of action which is to be the subject of a matter. 

Now, your Honours, it is in a sense allowing before the institution of proceedings – sorry, this, in a sense, allowing discovery before the institution of proceedings as distinct from after in relation to potential or proposed, I should say, matters, so that, your Honours, there is the connection in relation to a matter.  It is not really quite the same thing because it is not in relation to pre‑litigation discovery.  It is part of, in a sense, the litigation.  Your Honours, I am sorry, I was going to go – if I could go then to ‑ ‑ ‑

KIEFEL J:   Yes, we have taken you away from Davison, I think.

MR JACKSON:   Yes, your Honour.  I had referred to the argument of counsel.  Then your Honours will see that the argument of counsel – I am sorry, I did not dwell on that aspect of it, your Honour.  The point I am seeking to make is that the argument that was being advanced was one based on the effect of the order on rights, as distinct from one of historical analogy.  The historical analogy really comes when one goes to the reasons of Chief Justice Dixon and Justice McTiernan. 

Now, your Honours, in a case such as Davison, it may well be that in terms of Chief Justice Griffith’s dictum in Huddart, Parker v Moorehead there may not be any controversy.  You can see that dictum again.  It is recorded at page 367 at about point 2 in the reasons.  There may not be any such controversy and we would accept that a category going beyond that definition is illustrated by cases like Davison itself in which a determination imposes liability or affects right.

Your Honours, part of that category can be seen in the quotation in Davison at page 367 at about point 4 from Chief Baron Palles in R v Local Government Board where your Honours will see that he observed that to make a court or tribunal’s determination judicial:

the essential element is that it should have power, by its determination within jurisdiction, to impose liability or affect rights.

Your Honours, I referred to that being perhaps part of that category because we would also accept that judicial power may extend to the declaration of the existence or validity of the exercise of powers or potential exercise of powers and it may be that the Chief Baron’s approach would exclude declarations of existing rights.  But in their reasons in Davison, if one goes to page 367 at about point 9, your Honours will see that their Honours said:

It will be seen that the element which Sir Samuel Griffith emphasized is that a controversy should exist between subjects or between the Crown and a subject, that which Palles C.B. emphasized is the determination of existing rights as distinguished from the creation of new ones -

The discussion proceeds to about point 5 on page 368.  Your Honours, may we make a number of comments about that.  The first is the characterisation of the reasons for judgment of the Chief Baron in R v Local Government Board [1902] 2 IR 349. It was said, if one looks at page 368 of Davison, that he was distinguishing between the determination of existing rights and the creation of the new. 

If one looks at the relevant part of the reasons for judgment, and it is page 371 about point 7 through to 375 about point 8, it is difficult to see that the criterion that was adopted by the Chief Baron is that which is referred to at the top of page 368 of Davison.  Rather, the distinction which was drawn appears to be that which was referred to on the previous page in Davison and you will see that at the bottom of page 373.  Your Honours, there is some unfortunate coincidence between page numbering in the two cases.  But the bottom of page 373 of R v Local Government Board, it was said:

I have always thought that to erect a tribunal into a “Court” or “jurisdiction,” so as to make its determinations judicial, the essential element is that it should have power, by its determination within jurisdiction, to impose liability or affect rights.

Your Honours will see that goes over to the top of the next page. 

GAGELER J:   It is a case about certiorari.

MR JACKSON:   Yes, I know, your Honour; yes, indeed.

GAGELER J:   I mean, it is completely outdated.  Even in that field it is completely outdated analysis.

MR JACKSON:   Yes, your Honour, I would accept that.  The point I am seeking to make, your Honour, is simply to say that if one is looking to see whether the approach taken in Davison should now be followed then one should look to see how accurate ‑ if I may say so, with great respect to their Honours who decided the case ‑ how accurate what they say is.

Now, the view of that case which is referred to at the top of page 368 is not, in our submission, at all what was decided or the criterion that was applied in that case.  Rather, the test that was applied was one that is referred to in Davison at 367 about halfway down the page. That is the point I am seeking to make. I have taken a while with it but that is the point I seek to make.

Your Honours, the second point I want to make is that if one goes then back to page 368 of Davison to the various classes of case, it is said that the elements – so we see at the top of page 368 that the elements that were referred to by Chief Justice Griffith and Chief Baron Palles were entirely missing.  But, your Honours, in our submission, it is apparent that they are all classes of case where there were, in substance, declarations as to present rights and powers or what affectation of such rights and powers should apply in consequence of the determination.

Could I go very briefly to those classes of case?  If you take the first of them, which is the administration of assets or trusts, almost all orders made in the administration of assets or trusts involve directly the desire, of one party or another, to exercise a right or power.  Underlying any such order or direction is a judicial determination as to the existence or ambit of the right or power and the determination affects the ability to exercise the right or power.

Even in the case of advice as to what to do, for example, should the trustee sell property to a speculator at a high price but with delayed settlement.  Or, a lower price to the solid and perhaps more dreary bank but payable more quickly, the giving of advice self‑executing, as its implementation may be, involves the question of what is to happen to property in which persons other than the administrator or trustee are likely to have rights, also often sought to protect the trustee from liability.

If one goes to the orders for the maintenance and guardianship of infants, your Honours, an order for maintenance creates an obligation to make payments and an entitlement to have such payments made.  Orders for guardianship confer on guardians some or all of the powers or duties of parents, vis‑à‑vis the child, and affect the “freedoms”, if I could put that word in inverted commas, of the child.

Also, your Honours, it is not, if I may say so, with respect, very illuminating, in the context, to rely on that. In the context of the Constitution, where it is clear that at least so far as the Commonwealth power in relation to the people of the States was concerned ‑ I leave aside the Territories ‑ matters of that kind were, as section 51(xxii) says, to be dealt with judicially. Your Honours will see it refers to:

divorce and matrimonial causes; and in relation thereto ‑

are those matters.  At that point, of course, the marriage power, the ambit of the marriage power, had not been fully determined.  And, your Honours, if one goes to the exercise of power of sale by way of family arrangement, family arrangements were contracts in the United Kingdom, the object of which was to obtain settlements of, admittedly, doubtful arrangements and the court in enforcing such an arrangement was exercising a power of making an order consistent with the arrangement.

Your Honours may need a reference to what family arrangements were.  Could I give your Honours two, one more or less at the time of the judgment in Davison, although a little later ‑ in Megarry and Baker ‑ at Baker’s edition of Snell’s Principles of Equity, 26th edition, 1966, page 671 and a shorter version can be seen in Walker’s The Oxford Companion to Law, 1980 at pages 459 to 460.

Your Honours, the next category is consent to the marriage of a ward of court.  Marriage would change the status of the ward.  It might also very well affect entitlements to property.  Your Honours, so far as administration of enemy property is concerned, orders made under the legislation affected interests in property and indicated the persons who might deal with such property and to what effect.  If one goes to declarations of legitimacy, they affect the legal relationship between a child, the child’s parents and the child’s siblings as child siblings and whether the child falls within terms such as “child” or “children” in statutes and instruments.

Your Honours, it is said that to wind‑up companies may involve many orders that have none of the elements upon which these definitions exist, and so to it may, your Honours, but one does need to look at the order which is in question.  And, finally, the reference to the grant of probate or letters of administration – orders of that kind – vest property or powers in relation to property in the person to whom the grant is made.

Your Honours, in our submission, the contention that a power should be regarded as judicial and that the power conferred on a court by Commonwealth law should be regarded as jurisdiction in a matter if no affectation of rights is involved and, by that term, I include declarations as to the existence of rights, should not be accepted.

Your Honours, the categorisation of the paragraphs or the instances to which I have referred was adverted to by Justice Brennan in Mellifont v Attorney‑General (Qld) (1991) 173 CLR 289, at page 315. Mellifont, your Honours, concerned appellate jurisdiction.  Justice Brennan dissented in relation to that issue, but his reasons do discuss original jurisdiction.  At page 315, about point 5, having quoted ‑ your Honours will see at the top of the page, from a passage in Davison ‑ he went on to say in the fourth line following that:

These are diverse categories of judicial power but in every case their exercise affects the rights (including powers, privileges and immunities), status or obligations (including duties, disabilities and liabilities) of persons, whether natural or artificial, who are subject to the jurisdiction of the courts.

Your Honours, in our submission, that proposition does support the contention that history by itself is not enough.  Your Honours, we have referred to this in our reply, in paragraphs 5 to 9, but may I mention one general matter now and I will come back to this in just a moment.  We have, of course, in Chapter III a separation of judicial power from legislative and executive powers.  In the United Kingdom, of course, there was no such separation.  That was epitomised in the position of the Lord Chancellor, of course, who exercised functions which are legislative, executive and judicial.

Your Honours, powers and functions could be conferred on courts without there being any need to consider whether the power or function might be characterised as judicial or not.  The same situation obtained in relation to the Australian colonies pre‑Federation and, subject to the Kable doctrine, applies now to the States.  So one does need to have a degree of caution in saying that, because functions were exercised by courts before Federation or after Federation in the exercise of power conferred by State legislation, it follows that they fall within the concept of judicial power in Chapter III.

KIEFEL J:   But this was dealt with by Justice Kitto before – as part of his discussion about historical analogues, was it not?

MR JACKSON:   I am sorry, your Honours, I did not catch the first part of what your Honour said.

KIEFEL J: The question about the separation of powers and whether or not the framers of the Constitution had in mind a particular separation of powers was something that was in the mind of Justice Kitto when he wrote in Davison about the use of historical analogues.

MR JACKSON:   Yes, your Honour, that is so.  Could I just say about that though that in relation to what Justice Kitto said, you will see that he spoke of the – I am sorry, your Honour, I was going to say your Honours will see that he applied a test, in effect, of saying – and this is at page 382, about point 4:

Where the action to be taken is of a kind which had come by 1900 to be so consistently regarded as peculiarly appropriate for judicial performance that it then occupied an acknowledged place –

et cetera.  Now, your Honours, I am going to say two things about that.  The first is that he did appear ‑ ‑ ‑

KIEFEL J:   Forgive me for interrupting, Mr Jackson, I had more in mind in terms of what you were discussing.

MR JACKSON:   Yes.

KIEFEL J: The passage at the end of 381 and the top of 382, which suggested that the framers of the Constitution had in mind not so much fundamental functional differences between that which was exercised about the separation of powers in England but to distinctions generally accepted at the time which is, I think, an allusion to more philosophical bases than legalistic.

MR JACKSON:   Well, your Honour, could I just say about that, your Honour will see that he speaks at the top of page 382 to:

distinctions generally accepted at the time when the Constitution was framed between classes of powers –

et cetera.  Now, your Honour, the extent to which he was referring to “generally accepted” seems to be elaborated upon by the next paragraph and particularly the last six or seven lines of the next paragraph.  Your Honours will see the expression there “so consistently regarded as peculiarly appropriate”.  I am going to say, your Honour, that in the Tasmanian Breweries Case his Honour seemed to have resiled from that somewhat and the suggestion that it is purely a question of history in the sense referred to at the top of page 382 does not really sit too well with the decision of this Court which rejected the historical criterion as being the decisive matter in R v Quinn, Ex parte Consolidated Foods Corporation (1977) 138 CLR 1.

KIEFEL J:   Mr Jackson, you say that it cannot be a decisive factor but do you accept that it is a factor pointing towards judicial power or is it completely irrelevant?

MR JACKSON:   Well your Honour, in some cases it may be and I do not think I can go to the extent of saying that you cannot.  I adverted earlier to the Truth About Motorways Case, where a significant matter was the fact that, if you took the ability under the Trade Practices Act for anyone to institute proceedings of a particular kind, then it was hard to say that because it allowed anyone to institute those proceedings without there being a controversy between that person and the defendant that that was outside judicial power. 

It would be difficult to do that because, of course, a very long history of courts exercising a jurisdiction to remove people from office at the instance of a common informer because they had not complied with the law, the common informer themselves having no special interest in relation to the office. So I accept, your Honour, that history may play a part but it is a question of what history and what part really.

Going to Quinn, the issue in that case was whether the power conferred by section 23(1) of the Trade Marks Act on the Registrar of Trade Marks to order a trade mark to be removed was a conferral of judicial power.  If I could go first to the reasons for judgment of Justice Aickin at pages 14 to 15 and paragraph 9 at the bottom of page 14, his Honour said that those reasons indicate:

that from the inception of the Trade Marks Act in England and in Australia the destruction or the withdrawal of industrial property rights granted by the Crown or by legislation has been treated as a matter of judicial power.

He went on to elaborate on that.  Your Honours, the principal reasons in the case were those of Justice Jacobs, with whose reasons Chief Justice Barwick and Justices Gibbs, Stephen and Mason agreed and the relevant part of those commences on page 11.  Your Honours will see in the middle of page 11 he said:

Then it is said that historically an order for the removal of a trade mark from the register has been regarded as the exercise of judicial power, and for this reason must continue to be so regarded.

He cited the relevant legislation.  Then he said:

The historical approach to the question whether a power is exclusively a judicial power is based upon the recognition that we have inherited and were intended by our Constitution to live under a system of law and government which has traditionally protected the rights of persons by ensuring that those rights are determined by a judiciary independent of the parliament and the executive.

Then your Honours will see the way in which he spoke of the rights referred to in such an enunciation as being the basic rights.  He said:

The governance of a trial for the determination of criminal guilt is the classic example.  But there are a multitude of such instances.  One of them ‑ ‑ ‑

and your Honours will see in the last three lines on page 11 the way in which his Honour analysed Davison and then went on to say at the top of page 12:

On the other hand the course of legislation in comparatively recent times does not, in itself, provide a foundation for the historical approach.  If the legislation requires the exercise of a power to determine questions the determination of which will affect what are traditionally regarded as basic legal rights, the judicial nature of the power springs from the effect which the exercise of the decision‑making function under the legislation will have upon the legal rights rather than from the history of similar legislation reposing the function in a judicial tribunal.

Your Honours, of course, there are cases and cases but that is a case where there was a very established practice of dealing with matters of that kind being committed to judicial tribunal in Australia, overseas, before Federation, yet it was held that the history did not have the ultimate relevance that would be contended for by our learned friends.

Your Honours, could I refer also to Justice French in the Federal Court in Highstoke 156 FCR 501 at 534, paragraph 108 having – I have taken your Honours to paragraph 107 and your Honours will see where his Honour said:

But to say that the courts have historically exercised –

I think I took your Honours to that paragraph earlier.  Your Honours, Justice Kitto himself, following Davison, expressed caution about the application of the “history is enough” or “history is good enough” doctrine.  That can be seen, your Honours, from his reasons in R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361. Your Honours will recall the dictum of his Honour in Davison’s Case at page 382 in 90 CLR 2 where his Honour had said:

Where the action to be taken is of a kind which had come by 1900 to be so consistently regarded as peculiarly appropriate for judicial performance –

et cetera.  Now, your Honours, when one came to Tasmanian Breweries, his Honour dealt rather more fully with the question.  Could I take your Honours to pages 374 and 375?  At page 374, about point 2, his Honour referred to the Privy Council’s decision in the Saskatchewan Case and then said:

This is not to say that some powers may not be held to be judicial though no adjudication in a lis inter partes is involved, for there may be sufficient justification for such a conclusion in an analogy with an admittedly judicial function, or in the fact that the power is ancillary to a judicial function, or in some such consideration:  see Reg v Davison.  But in general the notion is there, even if in the background, of arbitrament –

Your Honours will see that about point 3 on page 374, but in general the notion is there even if in the background of abitrament upon a question as to whether a right or obligation in law exists.  Your Honours will see then that about point 7 on page 374 through to 375 about point 1, that he said:

Thus a judicial power involves, as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that –

and your Honours will see the remainder of that sentence.

In other words, the process to be followed must generally be an inquiry concerning the law as it is and the facts as they are, followed by an application of the law –

et cetera.  His Honour went on to say, at the bottom of the page:

It is right, I think, to conclude from the cases on the subject that a power which does not involve such a process and lead to such an end needs to possess some special compelling feature if its inclusion in the category of judicial power is to be justified.

Your Honours, we would submit that that is important because whilst a judicial power is, to put it shortly, the authority to adjudicate, the extent to which the power is conferred can only be with respect to matters which arise relevantly under a law of the Commonwealth.

Your Honours, could we refer to our written submissions in paragraphs 52 to 54 and to paragraphs 5 to 9 of our reply.  The decision rejecting special leave in Saraceni is the first case, as we say in paragraph 7 of our reply. It does seem to be the first case in which historical reasons alone have been regarded as the basis for concluding that a statutory function was judicial. Your Honours, could I return to the nature of the function under section 596A?

KIEFEL J:   Just before you do, Mr Jackson, I think it is put against you though that Davison has been regarded in a number of cases by this Court as good law.

MR JACKSON:   Well, your Honour, Davison has been referred to, for example, at footnote, I think, 26 that I referred to earlier.  Your Honours will see it referred to.  Your Honours will not see, with respect, a case where it has been applied and we would seek to say that to the extent that it is said to produce the result that – I am sorry.  To the extent to which it is said to produce the result that there can be a judicial power conferred in circumstances where the exercise of judicial power does not declare or in some way affect – in the ways in which I have suggested – rights or obligations of or in relation to people, that that analysis of the effect of Davison goes too far. 

Your Honours, we do not suggest the result in Davison was wrong.  What we do suggest is that to treat Davison as saying that because a function was historically exercised by courts before Federation, just to pick one date, it does not follow that the conferral of that power on the court is a conferral of a power which is within the judicial power of the Commonwealth, whether one in terms of section 71, bearing in mind that section 71 is that the judicial functions that are contemplated by section 71 are those that are in relation to matters under section 75 and 76 so far as – leaving aside this Court’s appellate jurisdiction under section 73.  Your Honour, I think your Honours will see that in our submissions we do not say the result in Davison was wrong. 

Your Honours, could I just come back then to the nature of the function under section 596A? In our learned friends for the Commonwealth, in their submissions at paragraph 66, it is said that there is nothing in the complaint that the examination process is or can be characterised as investigatory but does not matter and reliance is placed on Dalton v NSW Crime Commission (2006) 227 CLR 490, and also on an earlier decision in Cheney v Spooner (1929) 41 CLR 532.

May I go, your Honours, to Dalton and to paragraph 45 at page 507. Now, your Honours, both Dalton and Cheney v Spooner concern the service and execution process legislation.  Dalton was a challenge to the validity of the legislation but not under Chapter III.  Cheney v Spooner was a case of construction of the legislation as it was.  Your Honours, if one goes to paragraph 45 of Dalton at page 507, it can be seen that the starting point of the reasons is to say that:

From a time well before federation, the courts of the Australian colonies, like those in England and elsewhere in the Empire, exercised a range of administrative and investigative functions.  Provisions for the examination of judgment debtors, bankrupts, and officers of failed corporations are in point. 

Your Honours will see a reference to the legislation in Cheney v Spooner.  Cheney v Spooner, of course, was reference to such pre‑Federation legislation.  But the issue to which the discussion in Dalton was concerned can be seen in paragraph 46, and that is there was a challenge to the validity of the legislation on the basis of section 51(xxiv). Your Honours, consideration was not given in the case apart from, I suppose, the general observation prefacing the quotation. Consideration was not given to whether and when an investigative function can give rise to a matter under section 75 or section 76.

I should add, your Honours, remaining with the Commonwealth’s submissions for a moment in paragraph 33, reference is there made to Re Ranger Uranium Mines; Ex parte Federated Miscellaneous Workers’ Union of Australia (1987) 163 CLR 656 to the purpose for which the task is undertaken. Your Honour, if one goes to that decision at page 666, the proposition put by the Court, or stated by the Court, is not put quite so broadly. What one sees at page 666 about point 2 on the page is:

The purpose of the Commission’s inquiry is to determine whether rights and obligations should be created.  The purpose of a court’s inquiry and determination is to decide whether a pre‑existing legal obligation has been breached, and if so, what penalty should attach to the breach.

That goes on then to say, at about point 4, the third line of that paragraph:

Thus inquiry into and determination of matters in issue is a judicial function if its object is the ascertainment of legal rights and obligations.  But if its object is to ascertain what rights and obligations should exist, it is properly characterized as an arbitral function –

Your Honours, our learned friends also say - in the Commonwealth submissions at paragraph 54 - that Davison has been referred to and relied on in very many cases.  Two particular references are given.  One is Baker v The Queen (2004) 223 CLR 513. If one actually goes to the case at page 533 in paragraphs 47, 48 and 49 what one sees is that the practices which were impugned in that proceeding were held to fall within – and your Honours will see this in paragraph 48 - the concept in section 80 - trial “by jury”, what was contemplated by trial by jury as distinct from a question about section 75 or section 76. Your Honours, it is not a case dealing with judicial power in the present sense.

The other case specifically referred to is, to put its name shortly, Pompano – Condon v Pompano Pty Ltd (2013) 252 CLR 38 where your Honours will see our learned friend’s submissions refer to Chief Justice French’s crisp analysis - it is a great pity his Honour is not sitting to take advantage of that crisp submission. If one goes to paragraph 2 at page 47 what his Honour said was:

The common law informs the interpretation of the Constitution and statutes made under it.  It carries with it the history of the evolution of independent courts as the third branch of government and, with that history, the idea of a court, what is essential to that idea, and what is not.

Now, your Honours, that is at a level of generality, with respect, which does not take one very far.  Your Honours, could we just say also, your Honours, that the submissions of the Commonwealth at paragraph 56 and the Queensland submissions at paragraphs 22 to 29 list various functions which it is said would be in jeopardy if our arguments were successful. 

May I go to the Commonwealth submissions at paragraph 56?  Your Honours will see at the top of page 13 of those submissions that they say that if we are right then various matters are vulnerable to challenge.  Could we just say that if one goes to the list of matters set out there, military discipline of course stands on an entirely different footing from the Chapter III questions.

So far as the welfare jurisdiction of the Family Court is concerned, it involves decisions as to the rights of children and the rights of those who have a relationship with them.  The reference to Marion’s Case (1992) 175 CLR 218 was a case in point because it determined who had the ability to authorise a sterilisation operation and the parens patriae jurisdiction was held wide enough to authorise that. But, your Honours, that was based on the inability of the person herself to exercise her own powers, to exercise her rights or to affect them.

Your Honours will see that referred to in that case – 175 CLR - at pages 258 to 259 and your Honours will see the nature of the welfare jurisdiction referred to at page 258 and then what I was just saying about it is referred to at the top of page 259.  Could I invite your Honours to note also what is said at page 261 about point 4 on the page - this was a case arising in the Northern Territory and, as their Honours said:

In the present case the emphasis was naturally on the marriage power and, as well, the territories power.

In relation to bankruptcy and insolvency, the next two items listed, the present challenge is to one provision of the Corporations Act and it is a provision, the analogue of which did not exist before Federation.  It did not exist in fact until 1992.

Your Honours, as to judicial advice, I have dealt with that already in relation to Davison.  As to preliminary discovery, Mareva‑type orders and Anton Piller orders - Mareva orders and Anton Piller orders affect rights in relation to property – there is no question about that.  I mentioned in relation to preliminary discovery, your Honours, it relates to a matter yet to be instituted as a claim in court but one which is proposed to be instituted and that applies both to the rules that are there referred to, 7.22 and 7.23 in the Federal Court Rules. 

Each of those proceedings can be regarded as the start of the matter or as simply provisions saying that discovery may be had before rather than after the institution of the proceedings and the constitutional justification for provisions of that kind may come, your Honours, from section 51(xxxix), rather than from Chapter III.

Your Honours, could I go almost finally to say that why is - try to answer the question why is section 596A different. Your Honours, in the legislation preceding Federation, the power to order examination was just that - a power rather than an obligation. The power was discretionary and if I could take your Honours to our written submissions in paragraph 38, written submissions in‑chief, your Honours will see the quotation from the Re North Australian Territory Co from Lord Justice Cotton, where he said:

it is not at all the right of the applicant; it is the Court which may, if it thinks it right –

to do so.  The manner of exercise of the power can be seen also in the quotation from the same case, Lord Justice Bowen which we have set out in paragraph 71, where your Honours will see - I will not read it out, but your Honours will see the quotations from the same case, speaking of section 115 in that Act.

Further, your Honours, in allowing the use of the power in voluntary windings‑up, the court had to be satisfied that it was just and beneficial to do so.  You will see that referred to, your Honours, in paragraph 41 of those submissions and the quotation from Lord Justice James in the re Metropolitan Bank Case. 

Your Honours, there was no analogue to 596A before Federation and, as we have submitted earlier, and as we say in paragraph 40 of those submissions, the provision did not exist until 1992 and even if one were to apply Justice Kitto’s test in Davison, whether watered down or not by Tasmanian Breweries, it does not fit within that test.  Your Honours, finally may I say this, that we rely on our written submissions and the reply.  We would submit the question reserved should be answered yes and the defendants should pay the costs of the ‑ ‑ ‑

KIEFEL J:   In the event that the answers were given in the affirmative, the orders that you seek are those in the writ of summons?

MR JACKSON:   Sorry, your Honour.  Would your Honour excuse me just one moment?  Your Honours, the orders sought, I am reminded, are in the last paragraph of our written submissions and your Honours will see paragraph 76.

KIEFEL J:   And in the event that the question was answered in the negative would it follow that there must be a dismissal of the writ?  Would it follow if there was a negative answer?

MR JACKSON:   Yes, your Honour.  Thank you, your Honours.

KIEFEL J:   Yes, Mr Zappia.

MR ZAPPIA:   Thank you, your Honour.  We adopt the written and oral submissions made by Mr Jackson in relation to Mr Palmer.  We make the following submission in relation to the fifth argument that is set out in his written submissions, namely, that the enlistment of the court in the examination which takes place is incompatible with the exercise of judicial power.  We say that this is so because we say that it impairs the impartiality of the court in relation to the subsequent proceeding upon which it adjudicates.  Alternatively, it impairs the appearance of impartiality.

There are two interconnecting reasons why this is so.  The first is because of the very nature of the examination.  It is an investigative procedure, which permits a court – or permits a liquidator or the court involved in it to investigate matters pertaining to an existing or potential proceeding.  A court or the liquidator may be permitted to ask questions during the course of the investigation going directly to matters which are in issue in those proceedings and to gather evidence in support of those proceedings and in proof of those proceedings.

For that proposition one can go to the decision of Justice French in Highstoke, and if I can take your Honours to that decision. It is reported at 156 FCR 501. If I could take your Honours in particular to paragraph 51 of that judgment, your Honours will see a reference there to the judgment of Justice Buckley in Re Rolls Razor Ltd, where the powers conferred are referable to the sorts of powers we are dealing with here, and his Honour says:

The powers conferred by s 268 are powers directed to enabling the court to help a liquidator to discover the truth of the circumstances connected with the affairs of the company –

Then if one perhaps goes back to paragraph 46 of his Honour’s analysis, he there refers to the judgment of Sir George Jessell in Re Gold Company, and in particular the quotation set out there illustrates that the power may be used for the purposes of testing the strength of a case contemplated or in fact which is in existence.  Paragraph 63 of the judgment refers to the report of the Australian Law Reform Commission, which again indicates that at least the chief purpose was:

. . . to facilitate the recovery of property, to discover whether conduct of the insolvent led to the insolvency and to investigate possible causes of action –

Paragraph 69 is another paragraph which deals with establishing that proposition, and finally, paragraph 74, his Honour there refers to a judgment of the Full Court of the Federal Court in Evans v Wainter, and in particular the judgment of Justice Lander in that court, and he sets out various propositions which are made by Justice Lander and if your Honours go to proposition 3.4 on page 524 your Honours will see that it is:

To enable evidence and information to be obtained to support the bringing of proceedings –

So the starting point is not only to appreciate that it is an investigation but it is an investigation that can be used for the purposes of investigating evidence for the bringing of proceedings or to establish proof of existing proceedings. Interconnected with that is the fact that the court itself under section 597(5B), if your Honours can go back to that section, your Honours will see that the court itself may ask the questions, and if your Honours also look at section 597(9), your Honours will see that the court can request production of documents. So the court itself can act in the role of investigator and inquisitor for the purposes of exploring ‑ ‑ ‑

KIEFEL J:   That is hardly a novel position for a court to take.  Perhaps not adopting the world “inquisitor” but the courts have been asking questions since, I think, about the 12th century.

MR ZAPPIA:   Yes, your Honour, I appreciate that that is a historical position, but here it is also not just the fact that the court is involved in this investigative procedure but then is called subsequently to adjudicate upon the claim and to adjudicate upon factual matters arising in the claim which may pertain for the examination, in particular, evidence which the court itself has adduced. 

KIEFEL J:   Is that not a management issue for the court in relation to whether or not a particular judge should be hearing a matter?

MR ZAPPIA:   That has been put against us as one potential answer, whether it is a complete answer is not ‑ ‑ ‑

KIEFEL J:   To say that it affects the institutional integrity of a court you have to overcome that, I think. 

MR ZAPPIA:   There are two things we would say about that, your Honour.  The first thing is it is not a complete answer to say that a different judge might hear the matter.  In Grollo, for example, the same practical solution was suggested in that case and I accept the majority of the Court said it was a practical solution that overcame…..of the case cause in which the Court – or members of the Court as persona designata were authorised to issue warrants and any evidence that might have been obtained from the warrants might then have tainted them if they were appearing in subsequent proceedings. 

I appreciate that at least the majority of the Court said that that was a practical solution that could be adopted just having a different judge to hear the subsequent claim.  Two of the members did not necessarily think that that was a practical solution.  They did not deal with it but they acted on the basis that it was not.  I accept that if a different judge, in fact, would hear the case, as a practical solution, that might resolve the problem, but the real problem is that of the perception of the institution by a member of the public.  They would look at it differently.  They would see the court as an institution involved in both capacities.

KIEFEL J:   Do the cases in this area – by the decisions of this Court in this area go so far as to say perception alone is sufficient to establish incompatibility?

MR ZAPPIA:   We would suggest it falls within the third category of the incompatibility doctrine which was set out in Grollo v Palmer, if your Honours go to Grollo v Palmer. That is a case that was – (1995) 184 CLR 348 and if your Honours go to page 365, your Honours will see in about the third paragraph where the incompatibility condition is discussed and their Honours say it might arise in one of three situations:

It might consist in the performance of non‑judicial functions of such –

I am going to number 2, your Honours:

It might consist in the performance of non‑judicial functions of such a nature that the capacity of the judge to perform his or her judicial functions with integrity is compromised or impaired.

So that is the issue of potential actual conflict because of the nature of the investigation involved.  Then we go on to the next one:

Or it might consist in the performance of non‑judicial functions of such a nature that public confidence in the integrity of the judiciary as an institution or in the capacity of the individual judge to perform his or her judicial functions with integrity is diminished.

It is the third of those that we would maintain is affected.  There is no doubt that, when we are dealing with questions of the institutional integrity of the court, the appearance of actual independence is as essential a quality for the exercise of judicial power as actual independence and it is a proposition that has been made over and over again, including in Wilson’s Case by Justice Gaudron – it is set out in our written submissions – where that position has been stated.

I can take your Honours to Wilson - it is the position of this Court, (1996) 189 CLR and in particular I refer your Honours to page 25, the third paragraph:

impartiality and the appearance of impartiality are defining features of judicial power. 

That in short is the proposition that we wish to put.  Unless I can answer any questions from the Court, there is nothing further.

KIEFEL J:   In the event that the question reserved for the Full Court was answered in the affirmative, do you seek the same relief as the plaintiff in the other proceedings because they have altered the relief sought from the writ of summons?

MR ZAPPIA:   Yes, your Honour.  There is only one qualification to that.  It may also apply to Mr Jackson’s client.  Our orders are also set out at the end of our submissions.  If your Honours turn to those orders, they are in paragraph 46 of our submissions.  Your Honours will see that we are asking for relief in the following form:

Declare that the summons addressed to the plaintiff and purportedly granted by the Federal Court in proceedings QUD580 of 2016 on 2 August 2016 -

So I fixate on those words, “2 August”, only because I think the defendant suggested that the summons was issued on 3 August.

KIEFEL J:   I see.

MR ZAPPIA:   So that may be an issue that also applies to Mr Jackson’s client if it be ‑ ‑ ‑

KIEFEL J:   Do you agree that if the answer to the question is in the negative that it would follow that the writ of summons should be dismissed?

MR ZAPPIA:   We do, your Honour.

KIEFEL J:   Thank you.  Mr Walker.

MR WALKER:  If it please the Court. Your Honours have seen from the terms of sections 596A and 597, to which our learned friend Mr Jackson has already made reference, that it does not completely describe the character of the power under 596A, to use the subheading given in the print, that is “Mandatory examination”. Yes, it is mandatory examination of a sense our friend has sufficiently described. However, as one sees from the involvement of the court, section 597(5B), it will include control in detail of the questioning and control, according to what:

the Court thinks appropriate.

Your Honours appreciate that this is a familiar formula of a kind which requires exercised judicially, a matching of the power to the occasion, a balancing of the entrenchment upon privacy and silence in the interests of the administration of justice to which I will be coming.

Your Honours have also seen that the provisions of section 597B provide that this is not mandatory in the sense that a court lacks any power to consider what I am going to call the propriety of the making of the order.  It is done retrospectively by reason of the possibility of a cost order against either an applicant for the order or a participant in the examination that ensues, if after the event - powerful jurisdiction by the court - because after the event, the court can consider whether it is satisfied that the order was:

obtained without reasonable cause -

We would also draw to attention, without dwelling on them, the provisions of section  597F, to which my friend has already sufficiently gone, section 597(4) and (9), as illustrations of the way in which the court retains characteristically judicial assessment of what I am going to call propriety and control of the examination.

Thus, the contrast, as we put it in our proposition 2 of our outline, which forms a large part of the written argument against us between what we call pre‑Federation discretion, the just and beneficial and the made, and the current statute, the statute that is impugned in these proceedings is, we submit, more than a little overstated.  What really has happened is a matter of timing. 

Rather than proleptically considering whether in effect the order has reasonable cause on the showing either by statements from the Bar table, as it was sometimes done, or by affidavit, the sanction of costs can be applied after the event when full appreciation can be had of the reasonable cause or not.  Similarly, there can be control, question by question, explicitly under the impugned statute here which, in our submission, if anything, provides a more tailored judicial control of this entrenchment on privacy and silence.

In any event, in our submission, the matter of discretion upon which such weight is laid in the plaintiffs’ argument is, in our submission, a distraction in considering the constitutional question of the validity of the enactment, whether it is within core judicial power or whether it is an enactment valid by reason of section 71 because of an historical and/or incidental location within that power.  One way or the other, in our submission, it will not be assisted by investigating whether or not the power is, in truth, discretionary.

We submit apart from what has been put in various written submissions about that matter that a moment’s thought about the nature of the common law, that is the common law as opposed to equity, is enough to dispel the notion that discretion is a badge, a necessary badge of the exercise of judicial power. 

Indeed, one of the ways that the rule of law is sometimes articulated is that there is no idiosyncrasy permitted to the judges in enforcing a rule upon the ascertainment of facts which attract the application of that rule.  We submit that this lack of discretion is in truth a factor which is common and unexceptionable.   

TCL 251 CLR 533, itself, is a recent example of the failure of an argument that a non‑discretionary element in a grant of jurisdiction somehow meant that there was an antipathy between the statute and the essential nature of the constitutional judicial power. A non‑discretionary adjudication as to whether statutory criteria have been made out, which are enacted then to provide mandatorily for a consequence to follow such as an order of court, is, in our submission, an unremarkable part of the core notion, indeed, of judicial power.

In our submission, the passages that you have already been taken to sufficiently in Dalton 227 CLR 490, illustrate the significance of forms of investigation or inquiry conducted in and by a court, obviously, on the motion of an interested person who then participates in the examination in the familiar form of the original chancery process of a bill in equity – what we now call preliminary discovery.

Interestingly, and we say tellingly, the argument against us does not assume the formidable burden of persuading your Honours that preliminary discovery is beyond power, is invalid, rather than being, as we would respectfully submit, a most salutary, if not, everyday process for the enhancement of the administration of justice.  After all, in its typical form, it requires a person to confess, as it were, an inability responsibly to decide whether to litigate and enlisting the court’s power of compulsion against persons who fit certain criteria of a very broad kind in order to enable questioning, again, of a very broad kind.

The significance of preliminary discovery of course is that, though one may succeed in obtaining the order and compelling the attendance and answering of questions by persons in question, they may not further the project of being able to decide whether to litigate and no litigation may ensue.  No one has ever suggested the absurd proposition that preliminary discovery is therefore something which is within power only if, eventually, litigation does ensue by reason of material discovered as a result of an order being made.  In other words, the necessary nexus has always been seen, without any doctrinal controversy about it, for preliminary discovery as an exercise of judicial power in the fact that there may, not must, be future proceedings.

There certainly need not be pending proceedings and, I think, in every form of preliminary discovery currently permitted in Australian jurisdictions if there are pending proceedings, then there cannot be preliminary discovery in relation to them.

NETTLE J:   What do you say about Mr Jackson’s point that with preliminary discovery you have got to identify a prospective defendant and cause of action rather than just fish around like a liquidator does?

MR WALKER:   That, with respect, can be taken too far.  In particular, preliminary discovery is available when one sufficiently satisfies the court that one of the things you are unclear about is who it is who should be sued and, of course, also what cause of action.  In short – and there is no paradox in this – you will disentitle yourself to preliminary discovery if you display that you already know enough to make the decision to litigate.  So my friend’s point, with respect, goes too far in drawing a contrast.  The essence of preliminary discovery is an essential lack of knowledge such as is required to found a responsible commencement of litigation.  That will often involve obscurity as to persons who might be sued, as well as obscurity about causes of action or claims which might be mounted.

No one has, hitherto, suggested, that is, there are no authorities, and our friends do not argue that the frankly inquisitorial or investigative purpose of preliminary discovery is something which badges it as either unconstitutional – that would be many bridges too far – or badges it as something that could survive only by the technique of arguing from historical analogy.  And one can see why our friends do not argue the latter because, after all, they attack that as a form of judicial technique, subject of course to the observation that it may be they have retreated from that absolute position in their written submissions in reply.

Your Honours, the answer that our learned friend, Mr Jackson, gave to Justice Gordon in relation to this point rather suggested that there would be an impossibility, were our friends’ premises to be accepted, in justifying questioning after an order had been made in relation to a winding‑up.

That is that the inquisitorial investigative purpose of questioning after an order could not bear the necessary incidental relation to an antecedent order in a winding‑up.  If that be true, then that would also certainly be true of bankruptcy.  Yet, in our submission – and, for that matter, would also be true for inquiries in aid of execution of final orders in litigation.

In our submission, to state that proposition is to reject it.  There has never been any doubt, hitherto, about the propriety of the questioning of bankrupts, that is, after an order has been made making him or her bankrupt, altering the rights and liabilities.  There has never been, hitherto, any suggestion that that is in the nature of an anomaly that the court routinely lists as a kind of judicial power that need not have the core badge of finally determining rights and liabilities by the application of pre‑existing law to found facts. 

Your Honours, somewhat akin to an answer that was given in Thomas v Mowbray, see the earlier reference in Fardon, to an incompatibility argument, can we simply draw to attention from one of the very authorities our learned friends have produced from the 19th century concerning the views of judges innocent of Chapter III jurisprudence and that is the North Australian Territory Company Case 45 Ch D 87. There are passages at 91 and 96 to which we would draw to attention redolent of a view by their Lordships that ‑ my words ‑ it is a good thing that judges were in control of and, as it were, were the residing authority of such powers. So, for example, at 91, one sees halfway down the page, Lord Justice Cotton referring to the possibility of the court seeing:

that questions are being put which ought not to be put under the powers given by this section, it ought to interfere.

KIEFEL J:   I do not think we have it on our list, so you will have to read to us, Mr Walker.

MR WALKER:   I am sorry, your Honours.  Perhaps if I pick it up further up the page.  This is one of the cases our friends have drawn to attention in their written submissions concerning the significance of the discretion in relation to what they call an extraordinary power.  His Lordship said on page 91 whether to make such an order:

is in the discretion of the Court . . . it is not at all the right of the applicant; it is the Court which may, if it thinks it right, order the person to attend and be examined –

That seems to be pressed by his Lordship as being, as it were, a merit of the way in which the enactment is framed.  There is a question which, it is admitted, is to be simply put for the purpose of obtaining information in relation to an action already brought and, your Honours, this was a case where the facts show that that cut across case management which was deferring discovery and interrogatories at that point.  There was, as it were, a walk around.  In my opinion, if the court sees a question being put which ought not to be put under the powers given by the section it, that is, the court ought to interfere again, a merit of judicial control of the process.  At page 96, in the reasons of Lord Justice Fry, it is put emphatically:

The whole of the proceeding, therefore, is a proceeding by the Court, and the liquidator or the contributory or the other person whom the Court allows to intervene and to be active in the proceedings only does so by the leave of the Court, because he is a person supposed to have the means of addressing inquiries to the witness . . . Each question is put by the liquidator only by the leave of the Court, and on behalf of the Court.

We draw it to attention because it seems odd that in the British tradition thus illustrated, to which this Court has always had recourse in understanding the nature of contested judicial power, the fact that it was a court conducting the matter was seen as a virtue not as a vice – so much for incompatibility. 

We then come to the question of the detraction from appearance or reality of impartiality as another aspect of incompatibility.  It would appear from the plaintiff’s written submissions in reply, paragraph 20, that their argument goes so far as to say there is a real – not merely apparent – detraction in impartiality by reason of a court having this power. 

In our submission, that is an extravagant proposition without any support at all, but like the argument recently put by our friend, Mr Zappia, in the other proceeding, it fails, in our submission, for a fundamental reason that it is simply yet another argument from abuse of a power eliding the distinction between the possibility of the power being abused and the question whether bestowal of the power by a statute is a valid enactment. 

Questioning by judges is one of the ways in which during a trial there can be indeed a shortcoming in either actual impartiality or the appearance of it and it may lead to two things:  a successful appeal and a disqualification of that judge hearing a retrial.  No one has ever suggested that casts the slightest doubt on the power, if you like, the constitutionality, of judges asking questions.

KIEFEL J:   It is a rather different context, though, is it not ‑ ‑ ‑

MR WALKER:   Very different context but ‑ ‑ ‑

KIEFEL J:   ‑ ‑ ‑ from this kind of investigation where one has to wonder to what extent a judge would be justified in entering into the investigation, perhaps in protection of the witness on occasions?

MR WALKER:   In such a case as this statute permits, it is hard to understand how a judge who is not a liquidator, does not have such resources as a liquidator already has, could possibly form the kind of judgments necessary to guide questioning without – without endangering an impartiality.  But no one is suggesting that judges do any such thing, and the power to ask questions in clarification in order to protect the witness from unfairness, for example, is, in our submission, made by salutary power and there is no reason to read this enactment as purporting to permit judges to do that which they could not do in ordinary questioning anyhow – that is, be unfair.

GORDON J:   There are other limits, are there not?  “Examinable affairs”, despite its width, has some parameters.

MR WALKER:   Yes, quite so and, in our submission, some questioning by a presiding judicial officer to ensure that a topic is indeed fairly within and represents an appropriate balance of what I might call resource and possible benefit, those are matters which are most salutary and beneficial to have within a questioning power and in itself that power is not invalidating.  That is not to say it might not be abused but an abuse of power does not, in our submission, provide a safe test of the validity of its enactment.

We say that nothing in the argument that your Honours have read and heard on behalf of the plaintiffs has demonstrated what I will call fundamental error not too late to be corrected in the reasoning and conclusions in Davison.  It is true that there are passages in the quoted dictum of Justice Kitto that provide the footing for the in particular written argument against us that there has to be what might be called a unique or special quality to an historical analogy or antecedent in order for it to be carried over, post Federation, into judicial power outside what has sometimes been called the core function – that is, Chief Justice Griffith’s enunciation, articulation of the matter.

KIEFEL J:   Do you go so far as to say that there is a ratio in the case then?

MR WALKER:     In Davison?

KIEFEL J:   Yes.

MR WALKER:   It is difficult to say that there is a formulation of concerning resort to history which is common to all reasons and which can be seen to be decisive of the case.  Rather, we say their Honours do not display differences of approach concerning the propriety of recourse to history nor the propriety of referring to powers that are not in themselves finally dispositive of what might be called substantive disputes substantively about rights and liabilities.

It is not a case which was posed as, as it were, a contest between those who said no resort to history is possible and those who said some and then particularised the form of resort which was possible. In the passage that you were taken to by my friend, Mr Jackson, at 90 CLR 367 to 370 in the reasons of the Chief Justice and Justice McTiernan there are not to be found expressions which are similar to those to which I have just referred in Justice Kitto’s reasons.

In our submission, that dictum of Justice Kitto neither appears in its context nor in the later course of authority in this Court to be treated as laying down what might be called a very high minimum standard for the reception into an understanding of judicial power of historical antecedents.  That is very clear, in particular, from the catalogue to which my learned friend went in address today in Davison at page 368.

After all, it is at the foot of that page and on the top of page 369 that one finds one of the many references to what sometimes has been called the chameleon doctrine.  In our submission, that is a doctrine, the existence of which rather puts paid to the notion that in order for an historical antecedent to be informative it needs to be of a kind which is peculiarly, if that means uniquely, appropriate to be exercised by judges. 

The fact that Chief Justice Dixon and Justice McTiernan refer to that very possibility after the catalogue in question which, as your Honours will recall, includes the many orders that have none of the elements of Sir Samuel’s definition in the winding‑up of companies, really is conclusive of the state of authority just looking at Davison on its own. The same thing is true at page 369 about halfway down the page as a result of the references by their Honours to Dean Pound’s seminal article to which reference has already been made.

In any event, in our submission, quite apart from what the Court, this Court has said about the historical approach in TCL to which sufficient reference has already been made, there is, of course, the very citation in footnote 26 to paragraph 29 of CGU v Blakeley 90 ALJR 272 to which attention was given this morning.

In relation to the need for leave to argue Davison being wrong, in our submission our learned friends have not made good any of the steps that this Court has suggested - whether definitively or not does not presently matter - ought to be observed in considering that question of technique in this Court. 

In particular, we would add to what has already been written by others about that point, the following observation that it does appear both after the written submissions in reply and the answer to some questions this morning by our friend, Mr Jackson, it does appear that history is not to be eschewed.  If it is to be looked at all, it cannot be looked at only on the basis that it will be rejected every time it offends this circular definition of a core function. 

The circular definition, in our submission, emerges by appreciation that it is only if one first treats as a premise for an ultimate conclusion that there is this abstracted and analytical functional description of the judicial power to separate it from the other two powers and that, therefore, history that does not fit that analysis cannot help and cannot overcome the disqualifying characteristic of some historical antecedent being reproduced. 

It is only if you assume that, treat that as a premise for the conclusion that it follows that there has been any doctrinal error or misstep by this Court in Davison and in the authorities that have preceded to look at historical antecedents ever since.  In our submission, one thing is clear, including say from Justice Windeyer in Tasmanian Breweries and other dicta referred to in the written submissions in this argument, is that the search for an exhaustive and abstracted definition of judicial power is a will‑o’‑the‑wisp.

We finally come to a matter that your Honours will see we think really raised for the first explicit time in paragraph 4 of our learned friend’s written submissions in reply, and then developed further today in address.  There is no lack of a matter here.  There are a number of candidates, and I leave it to others to argue some of them, but could we respectfully suggest that one matter, however humble, is whether or not the criteria are satisfied for the making of an order under the provision itself that is a matter and, in particular, picking up on what I have already said about preliminary discovery and what we have written about that, in our submission, there lies another nexus with future proceedings which makes this a power in relation to a matter as well.

GAGELER J:   Mr Walker, is there anything in the text of the legislation or in judicial glosses that ties the exercise of the power of examination to consideration of the facts or evidence gathering that might be relevant in a future proceeding?

MR WALKER:   There is the history, the two English cases to which our friends have referred, really very much turned on the use of the process and the propriety of it being invoked when it was invoked, in relation to the litigation; that is the first matter.  So, for a long time it has been understood that liquidators may sue and may require information to do so.

Otherwise, it comes from the nature of examinable affairs which, pursuant to the duties of liquidators in getting in assets and settling proofs, will necessarily involve the making of claims which, if disputed, will necessarily involve litigation.  So, the very purpose of a liquidation is the orderly, if you like, fundamentally pro rata dealing with deficient assets, the classic insolvency administration.

For a long time, including now, that has included the possibility of claims to help supply that deficiency made upon officers or former officers.  Not confined to that of course, it could be anybody against whom the company has a claim but includes specific company insolvency claims as well, such as that which comes from insolvent trading.

GAGELER J:   Yes, but the power under section 596A is not even confined to a company that is in the course of being wound up ‑ ‑ ‑

MR WALKER:   No, no, no, quite.

GAGELER J:   ‑ ‑ ‑ or in administration.  It can be any company and the applicant could simply be ASIC, as I understand it.

MR WALKER:   But the concept of examinable affairs ‑ ‑ ‑

GAGELER J:   Yes.

MR WALKER:   ‑ ‑ ‑ certainly in relation to a liquidator as an eligible applicant, and that is what this case is about, this is not a case about ASIC.  In our submission, of necessity, that very purpose includes the getting in, say, of assets.  Getting in of assets involves possible claims.  Possible claims involve possible disputes.  Possible disputes involve litigation.  That is the method by which, yes, the text of the statute does involve the possibility of litigation.  May it please the Court.

KIEFEL J:   Thank you. Yes, Mr Sullivan.

MR SULLIVAN:   Thank you, your Honour.  Could I just take up that last matter which was under discussion?  There is, of course, in Highstoke, being the construction of the section which has imposed on the text, that the examination can only take place in relation to an entity under external administration of some sort.  So his Honour Justice French, as he then was, went through a detailed analysis of the histories of the sections and the introduction of this particularly worded section and came to that conclusion.  My understanding is that that decision has been followed since.  So, in that respect, there is in the language of the section as interpreted by the courts that constraint.

Your Honours, can I start off by saying the first respondent adopts its written submissions and also the written submissions of my learned friend, Mr Walker, and his oral submissions.  I do not intend to repeat all the points that have been made but rather just highlight, if that is acceptable, a number of issues.

I would like to start by taking the Court to the R v Davison (1954) 90 CLR 353. I appreciate your Honours have already been taken to a number of the sections of the decision. Could I commence by looking at the reasons of his Honour the Chief Justice and Justice McTiernan, and particularly commencing at page 368, approximately five lines from the top, beginning:

It may be said of each of these various elements –

and then proceeding to approximately nine lines down:

the tradition of English law.

I accept what my learned friend, Mr Walker, said in relation to the difficulty in establishing the exact ratio of this case in the context of the expression by his Honour Justice Kitto that the Court has been taken to, but that particular section is consistent with having regard to the historical position and noting that a strict articulated functional test does not accord with the reality of what is judicial power in the sense of it is not a constrained finite class but there can be judicial powers which do not have all the elements as expressed.

Could I then take your Honours to page 369?  Now, my learned friend, Mr Walker, took you to the bottom of that page, particularly the third‑last line beginning “But there are many” and that proceeds over the page.  He was correct in saying that that is an early articulation of the chameleon principle.  You will also see at the top of the page a similar discussion in the context of appointments and judicial administration of trusts beginning:

It is this double aspect which some acts or functions may bear that makes it so difficult –

and goes on and obviously considers both – that that could be in the context of an administrative exercise of power but also a judicial exercise of power.  It is interesting that their Honours then proceed to the reference to the article, The Rule Making Power by Dean Pound and the statement there.  Again, we would say consistent with the general proposition expressed by Justice Kitto.

In relation to Justice Kitto’s reasons, we would say that coming to the actual articulation of principle which appears at page 382, it is perhaps appropriate to consider the introductory discussion at the bottom of 380 which leads up to the statement of principle.

My learned friend, Mr Walker, made reference to the TCL Case. I would like to take your Honours to that decision, (2013) 251 CLR 533. This was, of course, the case where this Court was considering the enforcement of international arbitrations. In relation to that particular decision, if I could take you to page 568 at paragraph 82, as an illustration of where this Court was considering the historical position in relation to how the courts dealt with the enforcement of arbitral awards. That historical consideration then continued on.

Then at page 572, under a heading “No impairment of institutional integrity” –so that was the context in which this Court was examining that particular issue – the relevant discussion, we would suggest, begins at paragraph 104, which ultimately leads into the discussion in 105 and the statement approximately two‑thirds of the way down that paragraph:

Historical considerations can support a conclusion “that the power to take [a particular] action is within the concept of judicial power as the framers of the Constitution must be taken to have –

considered it, and the footnote is to the principle as articulated by his Honour Justice Kitto.

I take that as an example because that is an illustration of this Court in the past having approved of that principle as a consideration for the legitimacy of a power being a judicial power.  Your Honours, can I then take you to the decision in Dalton v NSW Crime Commission (2006) 227 CLR 490? Now, the context in which this decision was being taken was obviously section 51(xxiv) of the Constitution. The proposition in which the issue arose in relation to the comments which were made in paragraph 45 can be seen commencing at page 506 at paragraph 41.

That there set out – that was the contention being raised by the appellant and seeking to draw a distinction of the use of the Act in relation to Service and Execution of Process Act between court matters and investigative matters.  Then, at paragraph 44 at the bottom where it says:

However, what is there said must be read in context. The Chief Justice was responding to an argument that the process spoken of in s 51(xxiv) is limited to that issued by a court or which initiates a legal proceeding. When read with that in mind, the passage in question does not give the present appellant the support he seeks to draw from it.

It is that that then leads into the discussion in 44:

The proposition denying the investigative functions of courts should not be accepted.  From a time well before federation, the courts of the Australian colonies, like those in England and elsewhere in the Empire exercised a range of administrative and investigative functions.

Now, the illustrations which are then given include the examination of judgment debtors, bankrupts and officers of failed corporations said to be on point or in point.  We have the reference there to Cheney v Spooner which was a company in voluntary liquidation case and also in respect of Bills of discovery identified as the equivalent of pre‑action discovery in this case. The statements by the Court there, obviously in the context of section 51(xxiv) of the Constitution, however, are recognising that those were recognised judicial powers being exercised by courts pre‑Federation.

Could I then take your Honours to the decision in Grollo v Palmer (1995) 184 CLR 348? This is on a slightly different point dealing with the contentions by my learned friend, Mr Zappia. You were taken to ‑ in the judgment at page 365 ‑ the articulation halfway down the page of the issues dealing with the integrity or incompatibility with the Court, and you were taken to the third item and said that was relied upon. I would like to take your Honours to the final paragraph on that page, dealing with the submission that was made about the:

judicial integrity [being] compromised and public confidence in the exercise of the jurisdiction of the Federal Court [being] prejudiced by the conferral of power on judges –

The argument which has been made against the respondents in this case on that particular issue was then dealt with over the page.  Really, about 12 or 13 lines down beginning:

These arguments are “troubling” but, as with the courts in the United States, the argument can be met by the adoption of an appropriate practice.  A judge who has issued a warrant in a particular matter can ensure that he or she does not sit on any case to which the warrant relates.

Their Honours go on further in that particular statement.  In that respect, the vice which is being asserted here, which is said to arise from the supervision of an examination by an officer of the Court is capable of being dealt with by matters of practice afterwards, in the usual course.  In that respect, we rely upon our submissions where we have dealt with this in more detail.

Your Honours, in relation to the inquisitorial nature, or the submissions which were made as to the inquisitorial nature of an examination, reference has been made to the court’s supervision of the conduct of the examination.  So 596F and 597 of the Corporations Act illustrate that.  Her Honour the President in Saraceni did observe and make a comment which has been somewhat criticised in respect of the reality of those examinations. 

It appears in Saraceni (2012) 42 WAR 518 at page 540, particularly at paragraph 109. Now, we have referred to the statement there by her Honour where she says:

I have avoided language suggesting that a Pt 5.9 examination is conducted “by” the court.  That is to avoid the (erroneous) impression that the court is itself conducting the examination.  The court facilitates and supervises the examination conducted by the applicant and other interested parties with standing.  The proceedings are adversarial, not inquisitorial. 

We would say not inquisitorial from the position of the court.  We would commend to the Court that statement and my learned friend, Mr Walker, has expanded on this point in his oral submissions and we expressly adopt those.

Your Honours, unless there is something further that you would like to hear from me in relation to those particular points, they are our submissions.  I would say this, however, in respect of the form of the order if it were made.  The articulation of the order is that no use be made for any purpose of the information that was obtained on the examination.  We would caution against an order in those broad terms.  What is known is known.  One might be able to frame an order if the applicants were successful then not be used, for instance, as evidence in a proceeding or so forth but a broad unfettered order in those terms might lead to unfortunate results.  Thank you, your Honour.

KIEFEL J:   Thank you, Mr Sullivan.  The Court will adjourn until 2.15.

AT 12.44 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.15 PM:

KIEFEL J:   Mr Acting Solicitor.

MR HOWE:   Your Honours should hopefully have the Commonwealth Attorney‑General’s oral outline.  We commence by simply raising a preliminary matter.  We do not think it is fatal, but we feel it appropriate to draw to the Court’s attention that an issue does arise as to whether the issue of the existence of a matter is properly before the Court.  The statement of claim and the 78B notice would really only agitate that issue on a very expansive or generous interpretation. 

We accept that it is possible, of course, to construe a 78B notice in that way because of the connection constitutionally between a matter and judicial power and, of course, whether what is being done is purely inquisitorial or not feeds into both the conception of matter and the characterisation of the power in question as judicial or otherwise. 

In relation to the referred question, again, it would be possible to discern that as agitating the existence or otherwise of a matter only on a very generous expansive interpretation.  None of the substantive parties, though, raise an issue about that.  We are an intervener and we are content for the matter to proceed on that basis.

Could I come then to the question of the existence of a matter and our submission is that it is possible to approach that issue in a number of ways, principally divided into a very broad conception and a narrower matter‑specific conception.  As to the broad conception of the relevant matter for present purposes, we submit that it comprises the external administration of companies or a company – this company in particular – under and in accordance with the Corporations Act which gives to the Court an ever‑present control and supervision of every issue which arises ultimately with respect to that subject matter.

Before lunch Justice Gageler asked a question as to whether or not there was an examination power available with respect to companies, for instance, on the application of ASIC as an eligible applicant, who were not under any form of external administration.  The answer to that is one cannot find any express text‑based limitation to that effect but that very issue was the gravamen of the proceedings in Highstoke before Justice French. 

His Honour ruled that, for constitutional reasons, the conferral of power under section 596A had to be read down as limited, in effect, to companies under external administration. That has not been given effect to by any express amendment of the terms of the Corporations Act since, but that is the basis upon which examinations under the Act have taken place ever since.

GORDON J: It may also be that the ASIC Act provisions provide a specific power that might determine the way in which you put the Corporations Act.

MR HOWE:   Yes.  In relation to the heading in Chapter 5, which refers to external administration as such, as Justice French noted in Highstoke it is actually not a defined term, but there is a cognate definition of another term, an externally administered corporate body and that is defined in section 9. But, in any event, there is no suggestion on the part of the Commonwealth or anyone that section 596A can apply to authorise an examination by ASIC of a company that is live and viable and ongoing.

GAGELER J:   Mr Howe, this broad formulation of matter – I can see that it is a subject matter.  Are you saying it is a matter within the meaning of Chapter III of the Constitution?

MR HOWE:   We do.  We say that external administrations are things which arise under Commonwealth law, the Corporations Act, within the meaning of section 76 and jurisdiction is conferred within the meaning of section 77.  We say that the external administration of every company is replete with not just intersecting legal rights and duties but competing legal rights and duties which competition inheres in the very fact of the company being under external administration.

We say that every legal step which arises in the course of that external administration necessarily feeds into the existence or the enforcement of some asserted right, duty or liability, and the resolution of every such issue attending every such step in the process is subject to ever‑present supervision and control of the Court.  We say for that reason the matter can be defined broadly by reference to subject matter in that way. 

Indeed, your Honours have been taken by both counsel for the plaintiffs and for the defendants to the recent decision of this Court in CGU v Blakeley and in particular to paragraph [29], and in particular to footnote 26.  Now, in paragraph [29] - there is no need for your Honours to go to it, but in paragraph 29 the Court was really dealing with the conception of the matter and its intersection with judicial power and after formulating, as it were, principles in relation to that, in footnote 26 they very advertently and in non‑parenthetic terms gave as an example of a justiciable controversy attracting exercise of judicial power:

the long‑standing power of courts to give directions to trustees, administrators and executors and to determine questions arising in the course of company winding up processes or the traditional powers of courts to make orders relating to the maintenance and guardianship of infants, as outlined in R v Davison -

Now, with respect, that second example of a subject matter, matter, the constitutional purposes, is strongly supported by the decision of this Court in Marion’s Case 175 CLR 218 and Mr Jackson took the Court to that. In that case a plurality of four members of this Court held that the Family Law Act conferred upon the Family Court jurisdiction in a matter for constitutional purposes described very broadly as the welfare of children. 

The Court in particular noted that ordinarily that jurisdiction would come to be exercised because there would be a classic dispute inter parties.  Someone might be taking or threatening to take some step in relation to the child and there might be a dispute about that and the matter of the welfare of the children would in that context find its way to the Family Court.

But significantly, the Court in Marion’s Case noted that although that is the usual way the welfare of a child will arise as an issue, it was not necessarily the case and the existence of the matter, that is, the general broad topic of the welfare of children did not require the making of any particular decision by any one or any particular dispute about what should happen in relation to the welfare of a child.

Now, with respect, the position may, in fact, even be stronger here because children do not owe their very existence to the law but trusts and companies necessarily do owe their entire existence to the law and when they cease to exist or require administration that necessarily generates a contest in rights, duties and liabilities which is perfectly apt for attracting exercises of judicial power for the purposes of resolving those matters. 

Interestingly, the reasoning in Marion’s Case for that broad conception of a matter for constitutional purposes was specifically referred to with approval on the topic of what is a constitutional matter by Justice Gummow in Truth About Motorways 200 CLR 591 at paragraph 107. There is no need for your Honours to go to it. That is on page 632.

That broad approach to the conception of a matter was also the kind of approach adopted by Justices Gummow and Crennan in Thomas v Mowbray 233 CLR 307 and, again, your Honours do not need to go to it but at paragraph 120 their Honours referred to the maintenance of the peace as a matter, a constitutional matter, attracting the Court’s judicial power to bind persons over to keep the peace and it was noted that the existence of that constitutional matter did not depend on an extant prosecution or a pending or a contemplated prosecution, let alone did it depend upon a conviction.

Now, could I come to a narrower conception of the matter and, with respect, we adopt what Mr Walker said about that. There is clearly a matter that arises, in our submission, in terms of the satisfaction of the criteria upon which the Court is able to order an examination under section 596A and those are not just matters that a judge can wave the back of his or her hand at. They are substantive matters which arise for consideration. We have set them out in our written submissions. Is the moving party an eligible applicant? That can give rise to contestable issues. Does it relate to the examinable affairs of the company and so on?

But, with respect, it is also possible to conceive of the matter in the way suggested, with respect, by Justice Keane in the course of argument this morning.  The assertion by an eligible applicant, defined significantly as persons with an abiding interest in the orderly administration of companies, the assertion by a person occupying that distinctive status that he or she needs additional information in order to properly discharge the role assigned to him or her and in circumstances where the very exercise of the power will oblige an examinee to forgo the privileges available to him or her under the general law is, in our submission, necessarily a matter narrowly defined.

Now, could I come to this topic of whether or not an examination is purely inquisitive, and that feeds into both conception of the matter, which I have not quite left but have largely done so, and whether or not the form of power is properly characterised as judicial?  In our submission, the examination power itself, if we can go to the narrow conception, cannot possibly be regarded as purely or wholly inquisitorial or investigative, and it is put as highly as that by the plaintiffs. 

In our submission, when one has regard to both the statute and the necessary operational factual context in which the statute will operate, it is absolutely clear – it emerges with unmistakable clarity that section 596A is not a power conferred to enable random persons to satisfy their curiosity about particular matters. That is not its purpose. It is a power which is conferred in aid of the implementation of the company’s external administration at the instigation of a person who is defined in terms which are emblematic of their interest in that subject matter.

Of course, we are concerned here with invoking the Court’s power to compel the provision of information.  This Court in other contexts has held that the reverse side of that coin, for instance, in a public interest immunity context, also will give rise to a justiciable matter.  For instance, in Jacobsen v Rogers, this Court famously held that public interest immunity is an available justiciable controversy ripe for adjudication by a court in the exercise of judicial power even though the claim for a proper basis of law not to provide the information arises in the course of the execution of a search warrant which is classically an administrative context. 

Now, this is the complete obverse of that because here an eligible applicant is asserting a need to know additional information for the purposes of performing their roles under the Corporations Act.  But it is nonetheless instructive that courts in the public interest immunity context have had no difficulty at all discerning the existence of a matter and a matter ripe for adjudication or resolution by exercise of judicial power. 

In our submission, the very making of an order for examination, let alone the conduct of it, but each of those things necessarily immediately alters and adjusts rights and duties of, in effect, parties, the eligible applicant and the examinee.  In relation to the eligible applicant it gives him or her, subject to the court’s control and supervision, a right or an entitlement to the acquisition of information so far as the examinee is concerned.  It obliges that person to answer questions and puts beyond their reach the fundamental powers – the fundamental protections that the law otherwise gives, namely, the privileges against self‑incrimination and self‑exposure to penalty.

The final factor that we would ask the Court to take into account in relation to the plaintiff’s reliance on the power being purely or wholly inquisitive is that again the very nature of this power and the necessary operation or factual context in which its exercise will always arise for consideration is such that there will be in every case an ever‑present and non‑excludable possibility, if not likelihood, that downstream powers of determination and adjudication will be exercised by the Court on application of parties.

For that reason, in Hamilton v Oades Chief Justice Mason described the examination power as akin to a system of discovery.  Now, we do not say that in every case there must, in fact, advertently be a particular proceedings in respect of particular issues in contemplation of the eligible applicant at the time the summons is sought, but we do ask, as it were, rhetorically, how could it ever be the case that an eligible applicant could exclude the real possibility that depending on the answers which are given, he or she or some other eligible applicant may be moving the court for the exercise of other judicial powers with respect to the administration. 

If the eligible applicant was able to completely exclude that real possibility then, in our submission, a real issue would arise as to whether or not the application was one which was an abuse of the process of the court but, in any event, in our submission, it is a factor which can be added, as it were, to the mix of factors that supports the characterisation of the power as judicial.

Could I come next the issue as to whether or not the absence of an orthodox lis inter partes, as it were, excludes characterisation of the power as judicial.  That is something which is pressed in the plaintiff’s submissions in reply in particular at 4, 9 and 12 to 16 of the plaintiff’s reply submissions.  We want to deal with this, as it were, fairly succinctly, but there are many cases indeed wherein this Court has accepted that examination powers in the context of external administrations entail the exercise of judicial power with respect to both the general subject matter and with respect to the conduct of the examination itself.

Your Honours have heard reference to the case in this Court of Cheney v Spooner.  That itself concerned a voluntary administration and examination power in that context.  The Court held that it gave rise to a justiciable controversy and that particular finding was referred to with express approval in Dalton v NSW Crime Commission.  To similar effect, there is the reasoning of Chief Justice Barwick in Rees v Kratzman 114 CLR 63, in particular at page 66, Mortimer v Brown 122 CLR 493 at pages 495 to 496, 499 and 502.

We have only referred to this case in a footnote in the Commonwealth’s original submissions but there is the decision of this Court in Patrick Stevedores Operations No 2 v Maritime Union of Australia (2007) 195 CLR 1. It is relatively recent. At page 47 – there is no need for your Honours to go to it – but in particular at paragraph [80], five members of the Court stated thus:

The courts are well accustomed to the exercise of supervisory jurisdiction upon applications by trustees, receivers, provisional liquidators -

who may be appointed without the company actually going into winding‑up or being wound up:

and others with the responsibility for the conduct of administrations.

The plaintiff’s argument in this case bears a very stark similarity to all of the points in effect canvassed by Justice Webb in his Honour’s dissenting judgment in Davison’s Case.  Whatever points of emphasis, of difference, as it were, with respect to points of emphasis might have arisen in relation to the five other judgments in that case, what is absolutely clear is that the position taken by Justice Webb did not commend itself to the majority of the court and their Honours resoundingly approved the sorts of powers exercised here as being ripe for judicial exercise.

Could I come now to the historical, analogue principle? Very briefly, your Honours, there are three categories of submissions we wish to put on that topic: firstly, some general propositions; secondly, whether it makes a difference that the administration is voluntary or involuntary; and, thirdly, whether it makes a difference that a section 596A examination is non‑discretionary, as it were.

Firstly, as to general propositions, on the topic of historical analogue, of course one starts almost with the reasoning in Davison and your Honour presiding asked is there a ratio that can be extracted from Davison’s Case.  We are content to chance our arm with a statement of a ratio in that case along these lines.  Historical analogues are relevant as an aid to the interpretation and proper construction of the power in question and its characterisation.  Historical analogues will not necessarily be decisive but historical analogues may in a particular case be decisive.

Now, with respect, we endorse Mr Walker’s submission that no occasion arises for reconsideration of those principles in Davison’s Case but we do make six very brief propositions on this topic of how a court should approach historical analogues for assistance in a characterisation exercise. 

The first proposition is that the plaintiff’s challenge to the so‑called test of Justice Kitto in Davison is really directed at something of a straw man.  We do not read Justice Kitto as having purported to have formulated a sole and exclusive test of judicial power.  We do not interpret Justice Kitto as having attempted to set out the metes and bounds of the principle that is to be applied and we accept that Justice Kitto’s formulation cannot be applied in a rigid or formulaic way and that it will not in each and every case ordain the outcome of the characterisation exercise.

The second and related point we make is that the principle of historical analogues is though an interpretative aid and when combined with other factors or even as a standalone factor, it is capable in particular cases of being decisive. 

Now, the fact that history ‑ what I am calling historical analogues ‑ can be decisive, was specifically accepted by this Court in Boilermakers’ Case by the plurality at page 278, point 8 and that was followed up with an explicit endorsement of the finding in Davison’s Case to that effect.  The principle that was endorsed was that history can be decisive, not that it must be. 

The fact that history can be decisive was also accepted and applied in fact by this Court in White’s Case where your Honours will recall that but for resort to history, the power in that case would have been characterised as the judicial power of the Commonwealth but it was history which operated decisively to warrant a different characterisation.

We refer, in particular, to passages in White’s Case in the judgment of Chief Justice Gleeson at paragraphs 9 and 14 and in the joint judgment of Justices Gummow, Hayne and Crennan at paragraphs 52 and 58.  So it is not correct to suggest that the first occasion which an historical approach was regarded by this Court as capable of being decisive was in the course of the special leave disposition in Saraceni’s Case. 

The third proposition is that Justice Kitto’s famous reference at page 382 in Davison’s Case to an inevitable characterisation is really a formulation directed to when and where history will be decisive.  It will only be decisive of the result when the substantial composite threshold articulated by Justice Kitto is satisfied and it consists of various components - your Honours are familiar with them - consistently regarded, accumulatively appropriate, acknowledged place in the judicial structure and so on.

The fourth brief proposition is that much in all or at least most cases - much by way of characterisation will depend on the strength of the acknowledged place in the structure of the judicial system.  So it is not correct to talk about the value of historical analogues as though they have some fixed emphatic, preordained value.  They will have a value relative to the strength of the acknowledged place which the particular power had as part of the judicial structure pre‑Federation.  The strength of that acknowledged place may be added to or detracted from when one places the historical analogies in their modern context and so on.

We come now to the fifth proposition and that is that – well, in fact, I have already put it, whatever one might discern by way – a different points of emphasis in Davison’s Case on the part of the five majority members of this Court, they can all be regarded, in our submission, as having endorsed those three general propositions I commenced with but, more particularly, as having found in favour of a characterisation of an examination power as judicial.

The sixth proposition concerns the plaintiff’s argument which is in their written submissions, in particular, their original submissions but it was not really developed this way in the course of oral argument.  But in the plaintiff’s written submissions it was put that one consigns historical analogues to an outlying place when undertaking a characterisation exercise and has regard to all other factors apart from history and only if a consideration of all of those other factors does not lead to a result does one then have regard to historical analogues. 

Now, as we read it, that is the proposition for which the plaintiff was contending in his opening written submissions and we say that is completely antithetical to the reasoning and the outcome in White’s Case.  It is certainly not the approach that was taken there because, on a consideration of all the other factors, apart from history, one would have given the power there in question a particular characterisation.  But when regard was had to history, it reversed all of that in favour of a different outcome.

Now, we therefore submit that the court in Saraceni’s case was correct to approach the matter in the way they did.  President McClure and Justice Newnes resorted to history in characterising the power.  They did so ultimately by saying history supports it being core power, not incidental power, and we say they were correct.

But before leaving this aspect of the matter, we just want to mention one other thing, which is that the plaintiffs in their opening written submissions invite the Court to find that the orders of Justice Dowsett, on 18 May, were an exercise of purely and exclusively administrative power.  Those were the orders that not simply appointed special liquidators but did so expressly for the purpose of them approaching the court as eligible applicants for the issue of an examination summons.  Now, we say if that was pure administrative power, it would be invalid.  There is no challenge to that exercise of power in the proceedings.  There is no section 78B notice that is issued.  There is no referred question to this Court in relation to that. 

But, in any event, it is with respect, an extraordinarily adventurous proposition to say that a person who approaches a court for an order for their appointment as a special liquidator is inviting the exercise of a pure administrative power.  Courts have never regarded appointments of trustees, for instance, with respect to the subject matter of trust, particularly charitable trust, as involving an exercise of pure administrative power.

Could I come briefly to this dichotomy between voluntary and involuntary administrations?  Again, this is something that the plaintiffs emphasise more in their written submissions than in the course of oral argument.  Your Honours know from all of the references to pre‑Federation laws, both in the UK and in the Australian colonies, that examination orders could be made by courts prior to the winding‑up order of a company having been made.  In effect, your Honours know that so‑called self‑declaring companies who were, as it were, in a process of winding‑up voluntarily could be the subject of orders for examination summonses.

In our submission, the absence of any bright line, let alone crucial distinction for present purposes, between voluntary and involuntary windings‑up is reinforced by two factors.  Firstly, the Act itself and the court’s control and supervisory powers thereunder operate essentially the same in relation to both voluntary and involuntary administrations.  There is a very worthwhile discussion of the absence of any crucial point of distinction between those two forms of administration by the New South Wales Court of Appeal in Hall v Poolman 75 NSWLR 95, and in particular at paragraphs 61 to 67.

The second factor though, your Honours, is that under the Corporations Act the court has the power at all times under section 467B to convert, as it were, a voluntary administration or winding‑up into a court ordered winding‑up or administration.  So part of the controlling supervisory role given to the court under the Act is such that it is difficult, if not impossible, to assign any great significance to the distinction between voluntary and involuntary windings‑up for present purposes.

Could I come, your Honours, to Gould v Brown very briefly?  It is put against the defendants by the plaintiff in his written submissions that Chief Justice Brennan and Justice Toohey in their joint judgment in Gould v Brown tied the validity of an examination order in that case to the existence of an earlier order for winding‑up of a company.  With respect, that is simply not the case.  The reverse is the case.  In a critical passage in the joint judgment of their Honours in Gould v Brown at paragraph 35, their Honours referred with approval to a case decided by the Full Federal Court in Re Socket Screw & Fastener Distributors, and I will give your Honours the reference to that. 

We do have copies of that available to your Honours. It is reported in 51 FCR 599, and at page 603, Justices Davies, Sheppard and Gummow held that examination powers have “long been regarded as a judicial function” and their Honours upheld the validity of an examination order in that case even though there had been no winding‑up order made by the court. There was, in fact, an order for appointment of a provisional liquidator instead and the Act at that time, as now expressed, a significant difference between a situation where a provisional liquidator is appointed and one where there is a court ordered winding‑up and that was to be found in section 471(2) of the Act.

The significance of Re Socket Screw & Fastener is made even clearer because in that case their Honours referred in turn to an earlier decision of the Full Federal Court in Acton Engineering v Campbell (1991) 31 FCR 1. In that case, Justice Lockhart, with whom Chief Justice Black and Justice Davies agreed, stated – and this is at paragraph 14:

Although this case is concerned with the compulsory winding up, the Corporations Law provides, as did its legislative predecessors, for creditors’ and members’ voluntary windings up.

The court in Acton’s Case went on to find that the difference between voluntary and involuntary windings‑up was not of significance in terms of characterisation of powers. 

In Gould v Brown, Chief Justice Brennan and Justice Toohey can be regarded as having accepted that line of reasoning but the approach their Honours ultimately took is made even clearer when one has regard to their Honours’ approach to the issue of severance.  They did not read the power down so that it was only available in respect of compulsory windings‑up and nor did Justice Kirby.  So, with respect, we adhere to the proposition we canvassed, namely that in Gould v Brown three members of this Court found that examination powers were available as an exercise of judicial power in the course of voluntary windings‑up as here. 

That is also the position in Cheney v Spooner and I have given your Honours reference to that, affirmed in Dalton’s Case, in Patrick Stevedores nothing turned on a distinction between voluntary and involuntary winding‑up.  It is not found at all expressly or implicitly in Davison’s Case and so on.  Indeed, in Davison’s Case Justice Fullagar at page 377, point 8 said he could see no distinction between compulsory and voluntary petitions for bankruptcy.  Justice Kitto also referred to various examples which do not allow for any such distinction being meaningful such as general administration of trust, guardianship jurisdiction, appointments of trustees and the like.

Could I come now, very briefly, to the relevance of the so‑called non‑discretionary aspect of section 596A? In our submission, the plaintiffs are quite wrong to submit that the terms of section 596A and the fact that there was removed from the express statutory provisions for ordering examinations, a threshold for the court to be satisfied that it was just and equitable for an order to issue that that represents a crucial point of distinction. In our submission, that is not right.

Indeed, if the court was positively persuaded that an examination summons was unjust and inutile, if that was the position then it would possess as an ordinary incident of its character as a court an implied or inherent power to dismiss the application as an abuse of process.  That does not need to find express voice in the section itself. 

In relation to this point, the plaintiff seemed to say the court could only resort to those implied or inherent powers if it was absolutely necessary to do so with an incident to the discharge of its judicial function.  With respect, that is not right.  We understood the plaintiffs to be saying that in their reply submissions at 17.  In our submission, this Court in Pelechowski’s Case 198 CLR 435 said that the suite of implied and inherent powers available to the courts to control abuses of their process are available to them short of strict necessity or essentiality.

With respect, the court will always have available to it its inherent power as an incident of its status as a court, bearing in mind we are talking here about Supreme Courts and the Federal Court, to ensure that examination summonses are not ever rendered instruments of oppression or injustice and that was a point made by Chief Justice Barwick in Rees v Kratzmann at page 66.

Finally, on that question, in terms of historical analogues, as noted by Justice Kitto in Davison’s Case at page 384 on the first half of that page, sequestration orders were actually made discretionary only in 1932.  Prior to that, upon petition for sequestration the court shall grant the petition and nothing seems to have turned on the characterisation of the task given to the court and pre‑Federation the position seems to have been that in the bankruptcy jurisdiction the order of the court had a similar non‑discretionary component to that which finds voice in 596A.

Now, could I come finally to a question that Justice Gageler asked before lunch?  I will only be another minute, your Honours.  I am conscious of the time.  I had understood Justice Gageler to ask whether there was anything in the text, either explicit or implicit, which tied an examination summons to the conduct of subsequent proceedings before the court. 

Our answer to that is there is nothing which ties the examination summons in that way, let alone renders it preconditional in the sense that it must be something that is undertaken in anticipation of subsequent proceedings but section 597(14) anticipates the real possibility of a connection by rendering answers given admissible in further proceedings under the Act, in fact proceedings generally, apart from criminal proceedings and civil penalty proceedings and, of course, resorting to historical analogies again, right from the mid‑19th century, these examination powers have been understood by courts at all times as having a connection to the possible exercise of downstream powers by the court.

Indeed, in a famous case of In re Gold Company (1879) 12 Ch D 77, the Master of the Rolls was there considering sections 115 and 138 that are the subject of extensive treatment in the parties’ written submissions and he stated that:

In fact the whole object of –

section 115, the examination power was to:

assimilate the practice in winding‑up to the practice in bankruptcy –

that is:

in bankruptcy to find out facts before they brought an action –

So at that stage the conception was that examination summonses were an important tool in the armoury of people for the purposes of invoking the court’s jurisdiction with respect to enforcement of matters as to which the information elicited would be relevant.  May it please, those are the submissions for the Attorney.

KIEFEL J:   Thank you.  Solicitor‑General for Queensland.

MR DUNNING:    May it please the Court, as your Honours are aware, Queensland limits its submissions to issues in relation to whether this is an exercise of judicial power, though we adopt the submissions made in respect of historical analogies and nothing in our submissions ought be taken as inconsistent with that.

Your Honours, can I move first to what is set out in paragraph 3 of our outline.  In that regard, may I ask your Honours please to take up this Court’s decision in CGU Insurance v Blakeley (2016) 90 ALJR 272, which your Honours have already been taken to. I take your Honours to it only for this reason. Our learned friends for the plaintiffs do not go this far in writing but seemed orally to go as far as to suggest that a matter for the purpose of section 76 was really a controversy and with respect we say it does not go that far.

In that regard, can I first ask your Honours please to go to paragraph [24] of the reasons.  About halfway through the paragraph there is a reference to Chief Justice Griffith in Ah Yick where his Honour recalls:

the term “federal jurisdiction” in s 71 . . . means “authority to exercise the judicial power of the Commonwealth … within limits prescribed”.

Then your Honours in the last sentence of that paragraph:

The identification of the subject matter of the proceeding is necessary to determine whether judicial power is invoked –

So that is the first requirement and your Honours will see that also mentioned in paragraph [27], which I will come back to in a moment, and at the end of paragraph [29].

The second matter is that the proceedings must raise an issue which is justiciable or capable of judicial determination.  Your Honours will see that developed first in paragraph [25] where their Honours refer to other limits on “judicial power” encompassing things such as “justiciability” and that jurisdiction and judicial power are different concepts.  So they are the two requirements for the invocation of Commonwealth judicial power.

What they do not require is the existence, in our respectful submission, of a controversy.  They require the existence of a subject matter that is within the judicial power of the Commonwealth and that that arise in circumstances which are justiciable or capable of a judicial determination.  Your Honours will find that in our submissions recorded in paragraph [26] of the reasons where their Honours record:

It is a necessary condition of federal jurisdiction, in the sense of authority to exercise the judicial power of the Commonwealth, that the matter in which the jurisdiction of the court is invoked is “capable of judicial determination” or “justiciable”.

Might we pause there to emphasise that what their Honours record there is that it has to be a matter that is justiciable, not a controversy.  That leads us ultimately then to make this submission.  Your Honours were taken by our learned friend, Mr Jackson, this morning at paragraph [27] and what was said by Mr Burmester there and the reference to justiciable controversy. 

“Justiciable” is an adjective; it is speaking of something. It will often speak of controversy but it must not always speak of controversy. Were it otherwise – as we made the submission in writing – the Commonwealth judicial power would be conditioned not upon a matter but upon a controversy and, in our submission, as a matter of text it is not and as a matter of history it is not. That is, when the Constitution came into existence, those who had drafted it were well aware that by that time, for centuries, courts had exercised judicial power, often in respect of controversies but also in respect of matters that might not fit that description.

GAGELER J:   So do you that the word “matter” was chosen so as to be deliberately broader than cases or controversies that appear in Article 3 of the United States Constitution?  I have never heard that before but possibly you are right.

MR DUNNING:   Your Honour, I cannot say that I have directed my attention to that comparison with it.  I must confess mine was a more textual analysis of it and in light of those passages I have just taken your Honours to.

Your Honours, can I then move to the second of the propositions that we have set out in paragraphs 6 to 8 of our outline which is before your Honours today.  That is, it is settled, in our submission, that there are some categories of case that are uniquely an exercise or exclusively an exercise of judicial power and some which are exclusively an exercise of executive or legislative power.  But, outside that, Parliament has a prerogative to choose whether a particular matter might be executed by an exercise of judicial power or an exercise of executive power, or might achieve a regime like the external administration of insolvent companies by engaging both sorts of powers as Parliament sees appropriate.

Finally, your Honours, the third of our essential propositions is that to dispose of the case, in our submission, one needs to go no further than Justice Kitto’s formulation in Boilermakers.  And it can be fitted neatly to the circumstances of this case to reflect that an order made under 596A is, in truth, an exercise of judicial power.  We have set that matter out more fully in our written submissions, at paragraphs 9 to 13.

Your Honour, there were only three other matters I wish to briefly raise orally – they start at paragraph 14 of the written outline document and, in particular, the quoted passage in that paragraph – to demonstrate that it was within Parliament’s prerogative to choose to confer this power as judicial power on a court.  And the very fact that it cannot, in our submission, be considered a uniquely executive power – that is, to require somebody to be orally examined – means that Parliament’s selection of an order under 596A is a matter that points strongly to the conclusion that it is to be an exercise of judicial power.

As we make the submissions in paragraph 15, one sees that more fully in the provisions of the Corporations Act generally that deal with the administration of insolvent company, and if I can just give two illustrations.  Proof of debt, so you have persons who elect as unsecured creditors of the company, Parliament had any number of choices.  It might have, for example, said that those people could continue to sue in the usual way.  It might have said that courts would be created to adjudicate upon proofs of debt lodged with a court.  The method Parliament chose was that the liquidator would, in an exercise of executive power, receive proofs of debt, adjudicate upon them and then, if there was dissatisfaction by the creditor in that regard, there was a process to appeal to the Court and the judicial power would thereby be engaged.

Another illustration, and it is no more than an illustration, is in relation to the compromise of proceedings.  Parliament is seeing that it is expedient for liquidators and other external administrators to be given the power to run litigation, to form a view as to whether it should be pursued, whether it should be compromised but, has said, in the event of a compromise rather than a decision of a court, the liquidator, in certain circumstances, needs to return to the court for its sanction.  Again, Parliament has selected, in relation to the circumstances in which a contentious claim of a corporation might be dealt with, that in part is dealt with by an exercise of executive power and in part by an exercise of judicial power, and it does so because it has formed the view that that is the most efficient way to deal with that matter.

Your Honours, finally, can I simply touch on a matter that has been raised by others?  It does not appear here, but in relation to the investigative functions that are said to, in effect, condemn 596A as an exercise of judicial power, we have given some other illustrations in our written outline.  At paragraph 35 we give the reference to Lee and what Chief Justice French had said about compulsory examinations there conducted in the exercise of a judicial power. 

We have also from paragraph 36 onwards given the illustration of coronial inquests which are, of their nature, inquisitorial but have nonetheless been held to be in relevant senses an exercise of judicial power.  It is again an example of Parliament choosing as to how to deal with the problem and what part of that problem is efficiently dealt with by an exercise of judicial power and what not, and provided it is not in respect of an issue uniquely suited to a court or to confer such power would be inconsistent with the institutional independence of the court, not only is there nothing wrong with it but it is exactly what Parliament has intended to do.  Unless we could assist your Honours any further, they are our submissions.  Thank you, your Honour.

KIEFEL J:   Thank you, Mr Solicitor.  Solicitor‑General for Victoria.

MR NIALL:   May it please the Court.  Unless there are any questions, I do not seek to supplement my written submissions by way of oral address.

KIEFEL J:   Thank you.  Solicitor‑General for South Australia.

MR BLEBY:   May it please the Court.  South Australia relies on its written submissions and seeks to supplement them in only one respect of paragraph 8 of our oral outline of argument where the plaintiff in the Ferguson matter relies heavily on section 596A permitting the court to ask questions and require the production of documents drawing from this the risk that the court when it adjudicates a subsequent proceeding will not be

independent or seen to be independent.  This conflates the recognised problem of the legislative device that compromises – or may compromise the institutional integrity of the court with the possibility ‑ that is on the one hand – with the possibility on the other that in particular proceedings a reasonable person would apprehend that that court as constituted would not bring an impartial mind to the particular case.

The third iteration of the incompatibility question in Grollo v Palmer at page 365 of the report relied on by my learned friend, Mr Zappia, was very much directed to the institutional integrity of the court or, to put it clunkily, institutional integrity of the judge at all, as opposed to their ability to deal with particular proceedings in the particular case. May it please the Court.

KIEFEL J:   Thank you, Mr Solicitor.  Mr Jackson, reply?

MR JACKSON:   Your Honours, may I deal first with one matter, and that is the question raised by the Commonwealth, whether there was sufficient indication of the matter.  Your Honours, in that regard, could I take your Honours to the Question Reserved Book at page – I think it is page 20, your Honours.  You will see the notice of the constitutional matter.  You will see that paragraph 2 says:

The constitutional issue which arises is whether section 596A of the Corporations Act 2001 constitutes a valid conferral of the judicial power of the Commonwealth upon a court exercising Commonwealth jurisdiction.

For there to be a valid conferral of power there has to be conferral of the judicial power in a matter.  Section 77 says that and that takes one back to 75 and 76 and, your Honours, in our submission, it is absolutely clear that the issues involved concerned that also.  My learned friend, Mr Walker, your Honours, said that it did not become apparent until our submissions in reply and our oral submissions how much the question of matter was involved.  But could I just say, your Honours, that perhaps could we simply refer to paragraph 9 of our submissions in‑chief in which the – I do not want to say the word “matter” again – when that topic is discussed.

Your Honours, coming to more substantive matters, our learned friend, Mr Walker, said that reference is made to there having been a discretion in the pre‑Federation provisions and there being no discretion in section 596A is a distraction. Your Honours, one cannot rely, in our submission, on the pre‑Federation statutory material without taking into account the interpretation placed upon it by the courts.

The passages in the North Australian Company Case, to which reference has been made and which your Honours will see in our written submissions, demonstrate that the central aspect of the pre‑Federation material was the existence of the discretion not to grant such an order and that discretion is not in section 596A.

The second matter I want to refer to your Honours was this, that reliance was placed on the TCL Case 251 CLR as showing the use of history.  Your Honours, that is true in the sense that the history is referred to at page 568 in paragraphs 81 to 83.  But what emerges if one looks at paragraphs 81 to 83 is that it is said that arbitration – what emerges from it, your Honours, is that arbitration is consensual, usually contractual, of course. 

The common law developed by recognising an exception to the binding nature of the agreement to arbitrate.  That was a development of the substantive law and to seek the application of the development of the substantive law is a case of seeking to assert or defend, as the case may be, one’s legal rights. 

Your Honours, could I mention also Grollo v Palmer 184 CLR and there was a reference at pages 569 and 560. If your Honours would just excuse me a moment, I have stapled some things together in the wrong pages, I think, but if one goes to Grollo v Palmer at pages 359 to 360, one can see what is said at those pages under the heading “The nature of the power to issue interception warrants” and going through the whole of that section over to page 360 - you will see, your Honours, that at the bottom of ‑ I am sorry, I will start again. Your Honours will see at page 359, about three‑quarters of the way down the page, it said:

The power to issue a warrant to enter, search and seize must be exercised judicially.

There was a reference to there having been judicial acts in issuing them, further up that page.  Your Honours will see “judicial acts”:

The issuing of a warrant can be described as a judicial act but not in the sense of an adjudication to determine the rights of parties.

Now, your Honours will see the bottom of that page the observation that:

although the duty to exercise the power to issue a warrant must be exercised judicially, that means only that the power must be exercised without bias and fairly weighing the competing considerations of privacy and private property on the one hand and law enforcement on the other.

Now, your Honours, I will not read out the rest of that section on page 360 but we would invite your Honours to read it, arriving at the conclusion in the last sentence:

The submission that the power conferred by ss 45 and 46 is part of the judicial power of the Commonwealth should be rejected.

Your Honours, could I move then to the question of – in relation to the question of the form of order that was raised by one of our learned friends, your Honours will see the order that we seek in our written submissions in paragraph 76 and the challenge that is made in relation to it.  The caution which is urged upon your Honours relates to paragraph 4(b) of that proposed order.

Could we just say, your Honours, that if the summons was not validly issued, why should there be any benefit obtained from it?  The suggestion for caution was not accompanied by any suggestion as to different drafting and we would submit that is a satisfactory answer to it.

So far as pre‑litigation investigations of the kind that generally in question are involved here, could we take your Honours for a moment to the discussion of that issue by Justice French in Highstoke 156 FCR 501 at 529, paragraph 97. Your Honours will see in paragraph 97 at the bottom of page 529 that his Honour said:

When a regulatory body or authority such as –

and he gives examples:

is given such a power it is a power to investigate not to decide in the sense that a court decides when it gives judgment upon a matter before it -

Then your Honours will see there is a reference to Pioneer Concrete.  Then at the top of the next page, there is the commencement of a quotation from Justice Mason:

Mason J made some observations relevant to the distinction between the exercise of an investigative power which may lead to subsequent judicial proceedings but nevertheless remains administrative and the exercise of an administrative power as an incident of judicial power.

His Honour went on to say in the second paragraph of the quotation:

it is suggested that if the Commission requires information to be given for the purpose of obtaining evidence in a matter before the Court then it is exercising judicial power.

If I could go to about halfway through that paragraph, his Honour says:

Holmes J was merely saying that the character of the order or final decision made by a tribunal will determine the character of the inquiry which precedes its decision, so that if its determination is a judicial order then its inquiry will constitute an exercise of judicial power . . . This is not to say that it is legitimate to characterize the nature of the power exercised by the Commission under s 155 by reference to the judicial power which the Court exercises when it hears proceedings for a penalty –

And then, your Honours, importantly:

What the Commission does will produce information which may be presented in evidence by a party in proceedings in respect of a contravention under the Act, but this is no basis for saying that there is an exercise of judicial power on the part of the Commission.

We would invite your Honours to read the remainder of that paragraph quoted. Your Honours, could I turn then to the question of preliminary discovery and reliance has again been placed in the oral submissions on the existence of provisions for preliminary discovery as providing a basis for saying that the section 596A activity is judicial in character.

Your Honours, what must be borne in mind, of course, is that in determining an application for preliminary discovery the court acts as, in effect, umpire and decides the questions before it. It does not act as the inquisitor. The two positions are not, with respect, comparable. There is also, in our submission, drawing a long bow to treat the ability to have a hearing to ascertain information in relation to claims in sections 75 or 76 matters, which is the preliminary discovery issue, in allowing that to govern a quite different provision – or to govern whether a quite different provision, namely, section 596A is valid.

Could I move then, your Honours, to some of the matters that were urged on the Court by the Commonwealth today, and might I invite your Honours to have the Commonwealth’s outline of submissions.  Your Honours, one first has in paragraph 2 the suggested broad concept of “matter”.  It treats the provisions of the Corporations Act in a way rather akin to the supervision for the benefit of all that was said to be exercised by Signor Mussolini by keeping his light on; he was there all the time.  But your Honours, it does so by saying that the matter is the supervision and control of issues arising in the external administration of companies.  That is, in our submission, a very broad description of what would constitute a matter.

What one does see is that under the Corporations Act the courts are given various powers in relation to the administration of companies and the question which arises, we would submit, in every case is whether the conferral of jurisdiction on courts in those matters does relevantly in each case give rise to a matter, and there is not a basis for consolidating the whole or consolidating them into one large matter of the kind contended for.

Now, your Honours, the CGU Insurance does not, with respect, suggest that at all, but could we also say, if one goes to Marion’s Case, and if I could go to that for just a moment, your Honours, (1992) 175 CLR 218 at page 255, your Honours will see the relevant provisions of the Family Law Act there set out and first of all one sees, about point 3 on the page, the earlier version of “Matrimonial cause”:

“(c)     proceedings between the parties to a marriage with respect to –

various matters.  Then:

(cb)     proceedings by or on behalf of a child of a marriage –

et cetera.  Then the addition further down the page of other matters:

“(cf)    proceedings between the parties to a marriage –

et cetera and et cetera including –

(ch)     proceedings with respect to the welfare of a child of a marriage, being proceedings to which one party to the marriage is a party . . . ”

Now, your Honours, if one goes then to page 257, your Honours will see at about point 6 on the page it said:

What was achieved by the amendments of 1983 . . . was a vesting in the Family Court of the substance of the parens patriae jurisdiction, of which one aspect is the wardship jurisdiction.

Then, your Honours, if one goes to the passage to which I took your Honours earlier at page 258 through to 259, the nature of the welfare jurisdiction, it is then said, as your Honours have seen, the top of page 259, the fourth line:

As already explained, the parens patriae jurisdiction springs from the direct responsibility of the Crown –

et cetera, those who cannot look after themselves.  What the jurisdiction is, is a jurisdiction which is to deal with, in one way or another, the person, on the one hand and the property or other entitlements of the person who is the subject of the exercise of that jurisdiction. 

Your Honours, could I go then to the second aspect of the Commonwealth’s submissions, that is in paragraphs 4 to 7. Your Honours we would submit that it is incorrect to say that the power and role of the court under section 596A is other than inquisitorial or investigative because what one sees is that what is being done is to say you can apply to the court, if you apply to the court the court has to order that the person be examined. The whole purpose of it is to have that investigation.

Your Honours, the brooding supervision and control referred to in paragraph 7 of that outline of submissions, that possibility, your Honours, does not alter that characterisation of the power or the matters to be done underneath it. 

Your Honours, if one goes then to the next matter, the absence of a lis inter partes, et cetera, and the reference to Cheney v Spooner, that derives actually a great deal from the case that one might not, on an ordinary reading, with respect, think emerges from it, because the case seems to be deciding the ambit of the term – the word “evidence”.  Did it include material which might not be in curial proceedings regarded as evidence?  It does not really seem to do much more than that.

Could I come then to the suggestion in paragraph 8 of that document in relation to Davison?  We do not suggest that the actual reasons for – the actual result of Davison was wrong.  We do not rely on the reasons for judgment of Justice Webb; we have not ever.  What we say is that if you look at Davison, what one sees is that the contention which was advanced was, as is obvious, that a sequestration order, even if made at the instance of the ultimate bankrupt, was one which affected the rights of the bankrupt and those having dealings with the bankrupt, and it is right to say that such an order, because of those matters, is one that should be made judicially.

Where one runs into difficulty, or where Davison runs into difficulty, in our submission, is because of two things - one is that the reasons for judgment of the Chief Justice and Justice McTiernan on the one hand do – and I say so with great respect to all members of the Court – apply tests which – or do rely on matters which in reality all involve cases where there has been some alteration or has been or will be an alteration of the rights of parties or a declaration as to the rights or some implementation of the rights.

They are not cases where one can say, as their Honours seem to say, although there was no affectation of the rights they still were within the judicial power.  We referred your Honours to what seems, again, with respect, to have been an interpretation of Chief Baron Palles’ reasons that does not really seem to reflect what his Lordship was talking about.

The second aspect of it is that the observations of Justice Kitto in that case are ones that impose a test which does seem to have elements of curiosity in it in the sense that it says it speaks of the activities carried on by courts in pre‑Federation days, which were carried on for long periods and so on. 

But your Honours, without repeating the argument we sought to advance before, that test seems to have been one that was watered down somewhat by his Honour later and it is certainly one that does not seem to apply in a significant number of cases and was given fairly short shrift in the case about the Registrar of Trade Marks, to which I referred earlier.  In paragraph 10 it says:

The orders of Dowsett J . . . have not been challenged by the Plaintiffs and were a clear exercise of core judicial power.

Now, your Honours, it is very difficult to see any basis on which we should be obliged to challenge the orders that he made appointing the additional liquidators.  The relief that we seek in the proceeding adequately covers the matter.  Why should one add another issue, not determinative of the current proceedings?  Your Honours, could I just say in relation to the matters in paragraph 12 of that outline that, your Honours, we would submit that the proposition that the judgments of the members of the court there referred to:

did not tie the validity of an examination order to the existence of an earlier court order ‑

that that proposition is not correct.  We would invite your Honours to look carefully at their Honours’ reasons and, your Honours, I do not want to go into detail about them now, but we would invite your Honours to look carefully at that…..submissions.

KIEFEL J:   Mr Zappia, anything in reply?

MR ZAPPIA:   No, your Honours, we adopt the submissions of Mr Jackson, if it pleases the Court.

KIEFEL J:   The Court will adjourn for a moment to consider the course it will take.

AT 3.40 PM SHORT ADJOURNMENT

UPON RESUMING AT 3.45 PM:

KIEFEL J:   The Court is unanimously of the view that the question reserved in each of the proceedings be answered no.  The orders of the Court in each proceeding are:

1.The question reserved for the consideration of the Full Court pursuant to section 18 of the Judiciary Act 1903 (Cth) is answered as follows:

Question: Is section 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 courts exercising federal jurisdiction?

Answer:No.

2.The writ of summons is dismissed.

3.The plaintiff pay the defendants’ costs.

The Court will now adjourn until 9.40 am tomorrow for pronouncement of orders and otherwise until 10.00 am.

AT 3.47 PM THE MATTER WAS ADJOURNED.  REASONS FOR
JUDGMENT TO BE PUBLISHED AT A LATER DATE.