Plaintiff M68/2015 v Minister for Immigration and Border Protection & Ors

[2015] HCATrans 256

[2015] HCATrans 256

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M68 of 2015

B e t w e e n -

PLAINTIFF M68/2015

Plaintiff

and

MINISTER FOR IMMIGRATION AND BORDER PROTECTION

First Defendant

COMMONWEALTH OF AUSTRALIA

Second Defendant

TRANSFIELD SERVICES (AUSTRALIA) PTY LTD (ACN 093 114 553)

Third Defendant

FRENCH CJ
KIEFEL J
BELL J
GAGELER J
KEANE J
NETTLE J
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 8 OCTOBER 2015, AT 10.15 AM

(Continued from 7/10/15)

Copyright in the High Court of Australia

____________________

FRENCH CJ:   Yes, Mr Solicitor.

MR GLEESON:   Good morning, your Honours.  I come to what is perhaps a technical exercise of dealing with this evidence to see whether it makes good the plaintiff’s proposition in paragraph 15 of its outline, which we submit it does not.  The proposition is the Commonwealth should be characterised as having funded, authorised, caused, procured, effectively controlled and placed at its will detention in the past.  So the whole of this exercise is about the past, in that sense is subject to our general submission that there is no utility in the Court even reaching this part of the case, but that is the technical exercise I need to do for the next little while.

But before I started in terms of the legal principle, could I give your Honours Thomas v Mowbray 233 CLR 307 at page 330 in the judgment of Chief Justice Gleeson to make clear that what the plaintiff needs to be establishing here is the alleged Commonwealth control over, not merely deprivation of liberty, but detention in custody. The Chief Justice said in that paragraph:

It is not correct to say, as an absolute proposition, that, under our system of government, restraints on liberty, whether or not involving detention in custody, exist only as an incident of adjudging and punishing criminal guilt.

I draw attention to that because your Honour Justice Nettle asked me yesterday about a restraint on leaving the island and your Honour Justice Gordon asked me about other invasions on liberty.  Neither of those matters engage with the critical question, which is whether this is detention in custody being effected in some sense by the Commonwealth.  So that is the legal framework.

Now, the seven or eight pieces of evidence are these:  the first is the memorandum of understanding, which commences at page 68.  The critical fact about the MOU is that it does not involve Australia requesting or requiring Nauru to engage in detention in custody.  For that reason it does not advance Mr Merkel’s paragraph 15 one iota. 

The other aspects of the MOU that are relevant to the case would be, firstly, the preamble on page 68.  It evidences, convincingly, the matters that engage the external affairs power.  That is the first point.  The second point is on page 69.  There is a reference to disincentive, which Mr Merkel said bespeaks deterrence and thereby bespeaks some impermissible purpose.  Of course, this is disincentive in respect to the regional processing regime as a whole, not anything connected to detention, if there be detention.

The final aspect of the MOU for this case would be on pages 70 through to 72.  It indicates the purpose of the whole regional processing arrangements from Nauru’s perspective, in particular, that there will be an assessment of claims that successful people will be given opportunities to settle either in Nauru or a safe third country and unsuccessful people might be returned.  Now, that is very familiar to our scheme of processing of claims under the Migration Act, for the purpose of this case closely analogous.

The second document that Mr Merkel went to to make good paragraph 15 is the administrative arrangements which commence, nextly, at page 74.  The first submission is the same.  He was unable to point to any request or requirement by Australia that any detention occur in Nauru.  So, this also has not advanced his case one iota. 

There is one other aspect of the document, perhaps, page 79.  He sought to draw some distinction that the operation manager, whom he accepted was a Nauruan official, was somehow involved only at a helicopter level and that the day‑to‑day activity in the centre, which at particular times may or may not have involved detention, was carried out by Australia’s contractors.  That proposition is belied by page 79.  Paragraph 4.1.2 says:

Nauru will appoint an Operational Manager who will be responsible for the day to day management of a Centre.

Everything comes back to the operational manager.  As we see from 4.1.3 the role of service providers and staff members is to support the operational manager.  So, at the most, one could say that Australia’s funding and contracting has, in a causal sense, placed service providers in a position where they can support the operational manager who has responsibility for what is occurring.

FRENCH CJ:   Neither the memorandum of understanding, nor the administrative arrangements, requires or assumes the existence of a detention regime but can operate in support of a detention regime.

MR GLEESON:   If that be Nauru’s decision, yes.  The answer is yes, your Honour, if that be Nauru’s decision at any point in time.  Your Honour the Chief Justice drew attention to clause 4.2.1 which is the promise by Nauru to accommodate the transferees and that can be read in that same light, namely, there is no obligation or promise to detain anyone.  They are to be accommodated in the manner Nauru determines and that paragraph is also important on purpose.  The whole purpose of this is to enable the claim to be recognised as a refugee under appropriate provisions and the rest of this document, its significance is really on the purpose, so far as Nauru is concerned, of ensuring that claims will be properly assessed, reviewed and determined. 

The other aspect of the document, perhaps the final aspect is page 84, clause 8 and following, indicates the roles of the Joint Committee and the Joint Working Group which do involve, obviously enough, officials from both countries and their role, as is described, is to provide advice and their more detailed remit is found in the terms of reference.  It is an advisory role.  They do not run - run the centres.

Your Honours, that is the second piece of evidence.  The third is the Immigration Act 2014 of Nauru which commences at page 368.  Nothing in this Act authorises or requires detention.  Its only significance – page 375, clause 10 – is to establish a regime that in unsurprising terms you need a visa to enter or remain in Nauru.  That is the equivalent of our Migration Act, save that it is backed by an offence in Nauru. 

Clause 11 over the page provides for removal of persons who do not hold a valid visa.  Finally, section 33 on page 384 provides for the regulation‑making power.  So, thus far again we have not reached any requirement for detention, let alone any request or requirement to that effect by Australia.

GAGELER J:    What if you combine the definition of “operational manager” with section 18C(1)?

MR GLEESON:   Your Honour is referring to the Asylum Seekers (Regional Processing Centre) Act, I believe?

GAGELER J:   Yes, I am.

MR GLEESON:   Yes.  So far I have just got – there is nothing in the MOU, the AA or the Immigration Act that requires this detention.

GAGELER J:   Yes, I am sorry, I have taken you out of your course.

MR GLEESON:   Yes, so I am then coming fourthly to the Immigration Regulations and then fifthly to section 18C in the RPC Act.

GAGELER J:   I am sorry, I will not take you out of your course.

MR GLEESON:   No, I will come to that in one second, your Honour.  So, just to complete the Immigration Regulations, there is the fourth step – page 491.  The relevant visa is found in clause 9 at page 503 and following, and this first of all should be read as a discretion by the principal migration officer of Nauru whether to grant a visa at all.  That discretion is apparent earlier on in clause 4(1).  So Nauru determines whether any person, including any person in the plaintiff’s category, enters Nauru as a sovereign state.  It cannot be bound to accept any person.

Perhaps the high point of the plaintiff’s case is clause 9(3), which is to say that the application for the regional processing visa can only be made by an officer of Australia.  Your Honours should view that clause through this framework.  This is a provision of Nauruan law which has created the opportunity for an application to be made by Australia which Nauru determines whether to accept, and critically Nauru determines the conditions of the visa.  Australia cannot determine the conditions of the visa.  That is an act of the sovereign state of Nauru.  So, the fact that Australia applies for a visa does not amount to proving paragraph 15 of the plaintiff’s outline.  It is not a relevant request or requirement to detain.

GORDON J:   How does that sit with clause 9(1)(a)?

MR GLEESON:   That closes the class of persons who this visa may be granted to, so it hinges off and interlocks with - no doubt that is underpinning your Honour’s question, there is an interlocking between our provision in section 198D requiring persons to be taken there as a matter of Australian law but Nauru makes the decision to accept those persons.  Our law compels them to be taken but to make it effective, Nauru decides or not to accept them.  So, although there is an interlocking arrangement, we would ask your Honours and submit you should not characterise this as a request or a requirement by Australia to Nauru to detain any person. 

FRENCH CJ:   The regional processing centre, these have obviously just been – come out of the sky, one can infer that it is made pursuant to and to give effect to the intergovernmental arrangement?

MR GLEESON:   Pursuant to and to give effect to but as an act of the sovereign state of Nauru of determining not only there shall be such a visa, there needs to be one to complete the interlocking, but the critical thing is the terms of the visa.  The terms of the visa are in no way requested or required by Australia. 

FRENCH CJ:   Do we know that or we simply do not know?

MR GLEESON:   We do not know other than that and so there is no - save, of course, what you do know from paragraph 76 of the special case which - we do not accept Mr Merkel’s attempt to wriggle and squirm out of paragraph 76.  That paragraph is pellucidly clear that there would not have been any request by Australia for any arrangement involving detention and those things only came about because Nauru imposed them.  So that really perhaps allows me to make a stronger answer to your Honour’s question.

Now, there are two other aspects of clause 9.  The first which is important for the purpose argument is subclause (4) that there is a purpose attached to the visa, effectively similar to the position in Australia under the Migration Act, which is that the whole of the visa is hinged on enabling the person to make their refugee claim to stay in Nauru while any review is being considered, at paragraph (d) to enable persons who are successfully recognised as refugees to remain in Nauru while arrangements are being made for resettlement and so on. 

So, to the extent that when we come to the purpose case which is relevant at Chapter III, one looks at the Nauruan arrangements and, of course, primarily we look at the Australian arrangements, but to the extent we look at the Nauruan arrangements, the purposes and the time is defined.  It is not at large, it is not arbitrary. 

The entirety of this visa is targeted to enabling the claim to be properly assessed and then to be dealt with.  Indeed, that can be seen together with clause 9A that where the person is successful, they will graduate to a temporary settlement visa which, on any view, does not have detention conditions attached.  So that from the Nauruan perspective there is a purpose and a time attached to the achievement of the purpose which means that in no sense could any detention be described as arbitrary.

Your Honours, the final aspect of clause 9 is the subclause (6).  Now, we know that that has been altered in two steps.  The first alteration was to relax paragraph (c) such that where the person left the centre they did not have to be escorted by the service provider.  The second alteration we know is to remove these obligations to remain at all.

But even dealing with the plaintiff’s case in the past, at its highest, what the plaintiff urges you to look at is the original paragraph 6(b) and perhaps (c) and to say this, well, there was an obligation under the visa to remain in the premises except, apart from emergency and the like, where the absence was organised and permitted by the service provider and in the company of a service provider.

“Service provider” is defined by reason of pages 496 and 224 to include relevantly persons such as Transfield or Wilson Security.  That is what the plaintiff says.  Now, what is the answer to that?  The short answer to that is that Nauru has determined the conditions under which the obligation to remain at the premises will be relaxed from time to time and they have determined to make the service provider a functionary to act qua Nauru in determining whether to relax the requirement.

So, if the service provider does that, the service provider acts pursuant to Nauruan authority, not as an Australian functionary.  No officer of the Commonwealth has the power under this clause to relax the requirement.  The service providers and their employees are not officers of the Commonwealth and, one might submit, all of this is done under the overarching authority of the operation manager.

So, Nauruan scheme, service providers acting as Nauruan functionaries, and a way of testing it would be this:  if an Australian official purported to give direction to a service provider to reject a request to leave the premises, the service provider would be entitled to say, I am exercising a power pursuant to the Nauruan law and that must be my guiding touchstone, not simply the dictates of Australia.

Now, your Honours, I have gone to those two provisions, that is clause 9(3) and clause 9(6)(b) and (c), in their original form, notwithstanding they are now all superseded relevantly, because that is what really is the high point of this part of the plaintiff’s case and it does not establish paragraph 15 of the outline.

Now, I can then come to the fifth document, the Asylum Seekers (Regional Processing Centre) Act and perhaps your Honour Justice Gageler’s question.  It commences at page 217.  Could I establish in the definitions where certain people derive their authority.  The first important person is the authorised officer under clause 3(1) on page 221 and that is:

a person appointed as an authorised officer by the Secretary under section 17(1);

which is on page 232 to 233.  So the secretary of the relevant Nauruan department appoints:

as an authorised officer for a regional processing centre a staff member who is employed by a service provider who has been contracted to provide services for the Centre.

So the critical point is that, while the person may be an employee of Wilson Security, they derive their authority as an authorised person by a decision of the Nauruan Government and they, therefore, exercise authority as Nauruan functionaries.  So anything which a Wilson person does as an authorised person is done qua the implementation of Nauruan law and, therefore, by parity of reasoning cannot be subject to direction by any officer of the Commonwealth.  That is the first critical person.

The second is the operation manager and the definition on page 223 is a little expansive in that it could embrace a person given responsibility by the Commonwealth or the Nauruan Minister for managing operations at the centre.  Then it goes on, which is important:

and who is declared under subsection (2) -

Then subsection (2) on the top of page 225 says:

A person may be declared under subsection (2):

(a)      by name; or

(b)      by reference to the office -

Clearly, the process of declaration, which is essential to the establishment of someone as the operation manager, is a Nauruan exercise of power and you have that exercise of power recorded in volume 2, at page 805, where it is the Cabinet of Nauru which approved three named persons as the operation manager for each of the three RPCs. 

So our first observation about the operation manager is that that person derives the ultimate and critical authority from an act of Nauru.  Put in reverse, Australia cannot unilaterally appoint the operation manager and, as a Nauruan official, that person is subject to the law of Nauru, the rules of Nauru, judicial review in Nauru and responsibility to the Nauruan Government.

The second observation about this Act, commencing from clauses 5 and 6, at page 225, is it belies Mr Merkel’s submission that the operation manager simply lives in the helicopter and is not responsible for everything large or small in the centre.  The general duty in clause 5 could hardly be more pervasive:

a duty to ensure that each protected person residing at the centre is treated in a fair and humane manner consistent with the law of Nauru.

Then the particular duties in clause 6, without limitation, would appear to govern every aspect of ensuring the operation of the centre.  So, large and small, everything traces back to the operation manager.  The operation manager is a Nauruan official.  One can see from clause 6(5), a particular duty to report to the secretary in Nauru on various matters, including the use of force. 

Then coming to clause 7 it is that person, the operation manager, who makes the rules for “the security, good order and management of the centre”.  So when we come to the centre rules, they are a delegated instrument made by a Nauruan official, not Australia.  In relation to clause 7(2), Mr Merkel overlooked the opening words:

Without limiting subsection (1) rules made under that subsection –

can have certain effects.  That means what it says.  So, while subclause (2)(c) and (d) provides for one form of allowing persons to leave the centre, it does not prevent rules which would allow for a more expansive form of coming and going from the centre.  I then come to clause 18C on page 235 which creates an offence – obviously enough, Nauru have created this offence, not Australia – and the offence is:

A protected person must not leave, or attempt to leave the Centre without prior approval from –

one of three persons –

authorised officer, an Operational Manager or other authorised persons.

Authorised officer we have seen under the earlier provision.  Section 17 is a person appointed by Nauru and therefore performing a Nauruan function; that is not Australia.  The operational manager is the person appointed by Nauru as its official; that is not Australia.  There is no definition of other authorised persons, but they would be authorised again by Nauru under its law.  So the result is a primary obligation not to leave and relaxation lies in the hands of persons who derive authority from the law of Nauru and, for that reason, the plaintiff’s paragraph 15 is denied by this critical document of Nauru.

FRENCH CJ:   The Commonwealth under the arrangements and their implementation can be taken – and this does not necessarily involve any concession in relation to 15 – but can be taken, can it not, to have agreed to and provided material support necessary to the establishment and maintenance of the detention regime?

MR GLEESON:   The answer to that is yes.

GAGELER J:   Mr Solicitor, just a factual question.  The three named operational managers at page 805 of the special case book, are they – or is there any evidence or agreement about their employment status?  Are they also employees of Wilson Parking?

MR GLEESON:  They are not but I will – the evidence is at page 18, paragraph 62, that Ms Bervena Adeang is an officer of Nauru.  There is no agreement or fact that she is an employee of Wilson.  Nauru have chosen one of their officers to be the operational manager; that much is quite clear.  Everything that Wilson does it does under the operation manager and because of its employees being authorised by Nauru. 

Section 18C of this Act is pretty important to the plaintiff’s case.  It is one of the key provisions they reference in paragraph 66 as a restraint on liberty and our position is it is a restraint imposed by Nauru, capable of relaxation by persons that Nauru chooses and who behave as Nauruan functionaries.  That is the end of the plaintiff’s paragraph 15. 

Your Honours, the other aspect of this statute from paragraphs – sections 19 and following is the matter I adverted to – your Honour Justice Gordon’s question that when one looks more closely at the complementary powers, they are tightly regulated.  So section 19, for example, is a power in an authorised officer to search protected persons.  So, this will be the authorised officer acting qua Nauru.  One sees the fairly tight constraints on that search, for example, in section 19B including not only necessity but notification to the Secretary of Nauru.  Alternatively, in a situation of extreme urgency authority is sought from the operation manager. 

So, the whole of this happens within a Nauruan framework and the suggestion that Australian officers or Australian funded persons have general powers of this character is wrong.  The same is true for 19D which carefully regulates more invasive searches.  For 19E the general search power goes back to the Nauruan Secretary or the Nauruan operation manager.  In terms of the enforcement which is sections 21 and following, it is the Nauruan Police.  So, the ultimate enforcement of any confinement is done not by Wilson or Transfield but by the Nauruan Police.

To the extent that authorised officers are involved you might note in section 24(2) that if any force is used it must be immediately reported to the operational manager and there are other fairly tight confinements of that power.  That is the fifth document. 

The centre rules are found sixthly at volume 2 page 810.  Your Honour the Chief Justice put to Mr Merkel in respect to one of those provisions whether it is merely informative and the answer to that is yes, it was, the provision informing one of provisions we have already been to, namely, criminal offences.  Really, there is nothing in the centre rules which goes any further or provides any different source of authority to what is in the material we have been to.  The provision particularly cited is, I think, rule 3.1.3 and it is really only the operation manager repeating in a rule section 18C.  So, really one puts that aside and one is left with section 18C.  Now, that is the sixth document. 

The last document is the Transfield contract which is found at volume 2, page 608 and your Honours may have somewhere in the filing cabinet the two‑page aide‑mémoire which was handed up yesterday which, like all aide‑mémoires handed up without notice, excites those who proceed to try and find an error in it and unfortunately there is a very large error in the aide‑mémoire.  Let me show you the error.  The aide‑mémoire, apart from its very small print, seems designed to establish some propositions in bold that the Commonwealth - I will read them out:  “The Commonwealth operates the Regional Processing Centre”, Transfield provides its services under the “Commonwealth’s direction and control” in accordance with policies approved by the Commonwealth “subject to requirements to report to the Commonwealth” and:

In contrast, under the Transfield contract (with few minor exceptions), Transfield is not required to seek direction or permission from the Operational Manager of the RPC or Nauru -

Now, this is what is missing from this document.  Firstly, nothing in the document is tailored to the question of detention.  It is talking more generally about whether there is an involvement in the operation of a processing centre which per se is not challenged by the plaintiff.  So that the document in a sense has misfired because it has not identified provisions in the Transfield contract that bear on detention. 

The second thing that is wrong with it is that at most the Transfield contract can establish private law relations between the Commonwealth and Transfield.  It cannot of itself affect the rights of protected persons. Nor can it confer authority to engage in conduct in a foreign sovereign state.  So nothing in the Commonwealth Transfield contract can confer any relevant authority in relation to detention unless Nauru determines it shall be detention.

Thirdly, if your Honours could go to page 2 of the document and getting out the magnifying glass, under paragraph (b) which says:

in accordance with policies promulgated or approved by the Commonwealth –

it references “Cl 3.3.1 (Compliance with laws)”, so you would be forgiven for reading that as saying what the Transfield contract does is to say Transfield complies with the Commonwealth laws, QED, the Commonwealth controls the centre.  If your Honours were to go to that clause 3.3.1, which is found on page 612 of volume 2, what it in fact says is this:

The Service Provider must, in performing its obligations in this Contract, comply, and ensure compliance by all its Personnel, with:

a. –

and this is the one plaintiffs leave out –

all applicable laws, including those applicable in the Regional Processing Country where the Site is located and those Australian laws that are applicable to the Services or the Site; and

b.all applicable Commonwealth policies as notified to the Service Provider –

In other words, unsurprisingly, it is an essential promise and obligation of Transfield that whatever it does must in the first instance and always comply with the laws of Nauru.  In addition, it must comply with applicable Commonwealth policies and laws, that is, to the extent that Australian law or policy can have any application in a foreign sovereign State which it can only do subject to the overriding law of Nauru.

So, not only does the document not speak to detention, but it simply overlooks the critical point that everything that the Commonwealth and Transfield might agree is of course naturally subject to the overriding force of the law of Nauru.  Your Honours, apart from that, if one were reading the Transfield contract on its face and not through the prism of this summary, one would see that nothing in it is really targeted to detention at all. 

One might start more conventionally at clause 2.1.1 to see what the objectives of the contract are, and they are essentially to provide a series of services.  Those services are set out at page 624 to 625.  There are a range of services there and one does not see detention.  So that is how one might read more naturally what it is that this contract is providing for, and the rest of the contract sits within that framework.

I might also mention then two other points.  Mr Merkel referred to the term “Garrison Services” which tended to conjure up fear, at least in my mind.  If one looks at what the Garrison Services are – they are on page 636:  management of assets, cleaning, security, catering, environmental management, work health and safety, management of emergencies, logistics, accommodation, and transport.  So Garrison does not equal detention in custody.

Then finally, he took you to page 642, which is clause 4.14.1 and following of Part 3 of the schedule and he directed you to 4.14.1, a requirement to verify the transferees are safe and present in the site twice a day.  Then it goes on to say:

at times which take account of any curfew arrangements.

Clearly enough, to the extent they are open access arrangements or it is a come and go centre, that obligation does not call for performance.  Then he took you to 4.15 and 4.16, which refer to “Searches” and the “Use of Force”.  Now, they per se, as I have indicated, are not detention in custody, but critically 4.16.1b) says that the force must be exercised as we would expect:

in accordance with the relevant RPC legislation -

of Nauru which I have been to and has indicated how the entirety of this is controlled by Nauruan law.  So the excursion into that contract does not make the plaintiff’s case any stronger. 

That leaves finally, perhaps, what can be gleaned from the special case itself.  Could I go to that?  These would be the key points.  Firstly, on page 7 paragraph 26, in terms of the purpose of what is occurring in Nauru, the Court has information to indicate that this is a meaningful and realistic process of assessing claims which has resulted in a number of people being successful, a number are failing.  It has resulted in people joining the Nauruan community in some cases, voluntarily departing in other cases and certain numbers remaining resident in the centre.  This is not any form of process of arbitrary detention that is occurring.  If there was any detention it was purposefully related to processing of claims.

The second matter is perhaps paragraph 30 and following.  When I answered your Honour the Chief Justice’s question “yes” about what the Commonwealth does do, we do that because paragraph 30 says those are the facts and there is no doubt the Court should act on that basis.  Really, the strongest finding the plaintiff could properly attain is a finding that there is substantial funding and assistance by Australia in various steps which enable Nauru to carry out its law on its soil.  That is the basis on which we would ask you to approach the Chapter III questions. 

Then, the third matter which Mr Merkel referred to is paragraphs 43 to 47 which seem to have a non sequitur attached to his argument.  No doubt we have provisions under section 198B which can see people brought here for a temporary purpose, not for any purpose but for a proper temporary purpose, and that is what the plaintiff took advantage of.  Importantly, under paragraph 43e it has never been exercised without the transferee’s consent. 

So, as exercised, it is a power which has involved the consent of the plaintiff and, of course, the plaintiff was brought to Australia for a reason she wished in order to have certain services provided here.  Then there is an ability for such persons, of course, to return.  Now, the non sequitur is how one gets from that to saying Australia controls detention in Nauru is almost impossible to fathom.

Your Honours, the next matter is paragraph 66 and following which is probably at the heart of the case because this is where the plaintiff identifies the ultimate restraints.  In paragraph 66 there are really three matters.  The first is:

the specification in the RPC visa that the plaintiff must reside at the Nauru RPC –

Of itself, that is a specification about residence and does not extend to the questions of remaining there and, therefore, does not establish detention.  Section 18C - I have dealt with that.  To the extent it provides an umbrella regime which may see detention, it does so under Nauruan law subject to relaxation by functionaries appointed by and acting for Nauru.  Thirdly, rule 3.1.3 takes the matter no further. 

Now, that is the restraint on liberty.  That is the centrepiece of the Chapter III case.  None of that is the activity of the Commonwealth in the sense alleged by the plaintiff in paragraph 15 of its outline.  You then have some subsequent facts.  Paragraph 67 deals with the Wilson Security forces and makes clear that they are acting as functionaries of Nauru; 68 talks about permission of the operational manager, a Nauruan functionary; 69 talks about the Nauruan police force; and 70 to 72 take it no further.

So, while I have been to the seven or so surrounding documents, in the end that is what the plaintiff’s case hinges on, and not only are the facts in 66 now radically altered, but even as they originally stood the Court would not conclude that that is detention authorised, requested or at the whim of Australia.

Your Honours, that has taken a little long, but it is at the centrepiece of this case as to whether you accept the characterisation that the plaintiff has put up.  If you do not, then we would submit any Chapter III issues will resolve fairly quickly.  Your Honours, returning to our outline, paragraph 5 is the construction argument about section 198 ‑ ‑ ‑

FRENCH CJ:   It does not make any difference that the Commonwealth removes the person from – takes the person to a country in which there is in place a regime under which that person will be detained?

MR GLEESON:   No, not for our argument, because that does not amount to detention in custody by the Commonwealth.

FRENCH CJ:   That is because the arrangements, you say, are all local, in effect?

MR GLEESON:   All local and merely to point to a causal connection, which is the plaintiff’s – which we cannot deny – merely to point to a causal connection, the Commonwealth did something which perhaps in a sine qua non sense resulted in the other country being able to apply its own law, does not turn this into detention in custody by the Commonwealth. 

So, your Honours, the construction issue, I believe that can probably be dealt with in writing between the parties because it was not addressed orally yesterday.  It is essentially looking at 198AHA, what is it that engages the provision and it says that:

This section applies if the Commonwealth enters into an arrangement with a person or body in relation to the regional processing functions of a country.

By reason of the Acts Interpretation Act, the language “person or body” would include a country unless there was a reason to discern the opposite intent from the provision, and there is absolutely no reason to discern the opposite intent from this provision.  The most natural person with whom the Commonwealth would enter such an arrangement is, as it were, the other country.  To the extent it is necessary to look at the extrinsic material, it says that is the very purpose of the provision and accordingly the MOU between Australia and Nauru is an arrangement between Australia and a person body.

FRENCH CJ:   With the Executive Government of that country, I suppose.

MR GLEESON:   Yes, your Honour is correct, with an Executive Government on behalf of, as it were, the country.  Indeed, if you took that view you might say Executive Government is the person or is the body, but what the plaintiff would urge you to do is to find that this section only could apply in perhaps the less obvious cases where Australia might enter an arrangement with the United Nations body, or perhaps might enter an arrangement with the service provider such as Transfield.  Now, it would cover those but to say that is its only effect would be to strip it of a large part of its evident purpose.

KIEFEL J:   Well, you say it does not apply to the Transfield agreement, it would not be necessary for the purposes of a Transfield agreement in any event.

MR GLEESON:   That is right.  There is a fall‑back argument put particularly by Transfield that if it did not apply to the MOU it could be hinged by the Transfield contract but we do not think your Honours will need to get to that.  The point of this provision – moving ahead just a fraction – is obviously it is a provision designed to satisfy such requirements of Williams as may be engaged in these circumstances, namely, it works on a theory that it would be within the executive power under section 61 of the Constitution for the Executive to decide, as it were, to enter the arrangement in the first place.

So whether to have an MOU with Nauru and what its terms would be, that of itself would be within section 61 as an aspect of Australia’s dealings with another country. What it then seeks to do is to cut in and say, well, if, even though we are in the field of external relations which is where Williams may have its weaker force, if nevertheless a view were taken that Williams does extend even here to ensure by reasons of representative government or responsible government that the relationship between Parliament and the Executive is observed, then here is Parliament saying you may go ahead and do everything you need to perform that arrangement which you considered appropriate to enter.  So it is belts and braces. 

It is Parliament looking at what the Executive is doing and saying if you need our permission you have it.  So the most obvious arrangement that that would be tailored to is the arrangement with the other country and Parliament, as we know, passed this legislation in the middle of this year in order to ensure that at least this aspect of the case did not trouble the Court.  So one sees from subsection (2) that the things that it authorises are actions, payments and matters incidental to actions and payments, so the very things that Williams was grappling with Parliament said you may go ahead and do. 

For that reason, we submit, at point 5 that as a matter of construction the section is engaged, and paragraph 6 I have now really covered, that the entry of the MOU itself as a non‑binding obligation with another State in order to procure certain beneficial goals would be within section 61.

I do not need to take your Honours orally to those passages within Williams (No 1) where it has been recognised that there is scope for the executive power of the Commonwealth particularly in the dealing with other countries. It is part of the very core of section 61 that the Executive would be able to do these things. So we have a valid MOU, we have a section engaged, and one really then comes to paragraph 7 which is what sort of authority is this provision providing?

Now, in the end, there may not be a great deal of difference between the parties on this question of what the authority is providing.  It is certainly providing any and all authority that is needed under any Williams‑type approach.  That is its core activity.  It is designed to say as between the two arms of government, Chapter I and Chapter II, here is an area of activity where the Executive may go ahead and perform their desired functions with the sanction of Parliament.  It is designed to meet Williams‑type requirements.  That is what it definitely does do. 

We can then see from subsection (3) what it definitely does not do and your Honours might look at subsection (3) and think this is a surprisingly modest piece of legislation because it says something it is not doing and why on earth is Parliament telling you something that it is not doing?  What subsection (3) is about is recognising that there can be distinctions between questions of capacity and authority, which is the very language used in the very judgments in Williams, on the one hand, and questions of law from us on the other hand. 

So the Executive might have capacity and authority to enter a particular contract, but there may be something about the contract, such as it could involve a bribe of a public official that renders it unlawful.  The section is saying those questions of lawfulness would be left to be judged by the law otherwise applicable to the action.  What that law would be would depend upon a variety of questions, what the content of the law was.  It might depend upon choice of law questions.

So if I could take an example to explain that distinction or try and explain it.  If the Court reflects back on CPCF where one had the Executive activity on the high seas, the obiter judgments which were least favourable to the Commonwealth –for instance, your Honour Justice Bell, Justice Hayne and your Honour Justice Kiefel took an approach which said there would be, in a claim for false imprisonment, a conflict of laws question as to whether the common law of Australia applied or some other system of law. 

On the high seas, on an Australian ship, one might look to the common law of Australia.  Therefore, a deprivation of liberty would ordinarily engage the common law of false imprisonment absent authority.  Therefore, one would need to point to an authority to do what would otherwise be a tort.  So in that part of CPCF your Honours were looking at questions squarely of lawfulness, which required one to identify the system of law which governed the action and the content of that law.

Now, the modesty of subsection (3) is designed to say that sort of question is left untouched by this statute and so if the Commonwealth engages in action in Nauru it will have to derive lawfulness from the system of law governing those actions which, under ordinary conflict of laws principles, would be the law of Nauru.  This statute is not intended to in any way interfere with, override, qualify the law which will govern the action.

If the action occurs on the high seas then the lawfulness may need to be derived from the common law.  So, whether the modesty of paragraph (3) is false modesty or unnecessary modesty, it was seeking to observe a distinction in the law between capacity and authority, the relationship between Chapters I and II and the law which will govern the Commonwealth’s action which will depend upon ordinarily a conflict of laws question.

FRENCH CJ:   I can understand that authority is something which could come from a statute, but is capacity not something which inheres in the nature of the executive branch of government as distinct from something which is conferred by statute?

MR GLEESON:   Your Honour, that is probably correct.  The reason the statute has both is that in the varying judgments in Williams (No 1) sometimes it is expressed as capacity, sometimes as authority, and strictly we would adopt what you have put as to capacity inhering in the Executive, or not, by reference to an understanding of where Chapter II sits with Chapter I and Chapter III.  It is designed to embrace those notions however one looks at that analytically so that the people have the confidence that the Parliament has adequately addressed itself to the entirety of this relationship between the Executive and the Parliament, however one legally views it, but leaving the Executive to say lawfulness in the more conventional sense of false imprisonment, habeas, other such matters, you must look to the law that governs your actions. 

Now, your Honours, that has been a little extended, but what I am trying to offer is an explanation for what the statute is doing and what it quite deliberately is not doing.  Mr Merkel said to you yesterday that he agrees with much of that, but what he says is that the statute has a further effect which is, to the extent that what he calls Lim one, that is, the first proposition in Lim, has applicability to the Commonwealth in the area we are in, this statute also gives the authority of Lim one. 

Now, I will address you shortly on whether Lim one has anything to say about this case but if Lim one does have something to say about this case, then there is much force in what Mr Merkel says that this also provides the necessary authority.  Your Honours, then could I make observations on two other aspects of the section which are important?  The first is paragraph (5)(a) where “action” is defined to include:

exercising restraint over the liberty of a person –

That is designed to ensure under a principle of legality approach that Parliament has adequately addressed itself to the fact that doing the things authorised by this provision may extend into the area of restraints on liberty and, so, in that sense, it is important that that provision be there to negate any type argument that Parliament’s authority has not directed itself to that question.

Now, part of the reason for that is you know that prior to this statute the financial framework provisions included various items in the regulations which covered activity in regional processing.  Those earlier items did not in terms use the words “restraint over liberty”.  Whether that matters or not is in a sense now theoretical.  This provision is designed to say Parliament has turned its mind to restraints on liberty and they are part of the capacity and authority that is generated.

FRENCH CJ:   And (b) picks up the concept of action in (a) – action in (b), I mean, picks up the concept of action in (a).

MR GLEESON:   Yes, that is so.  Now, I said there were two matters, there are perhaps three.  The second was Mr Merkel or perhaps even Mr Lenehan as well queried why does this talk about actions in an original processing country and another country, that is designed clearly enough to cover the situation where the completion of the regional processing exercise may see people taken from the first country to a second country where they may be resettled such as one might think of people moving from Nauru to Cambodia or some other country that is brought into the regional arrangements.  That is unsurprising.  The final thing is “regional processing functions” is defined to include:

the implementation of any law or policy, or the taking of any action, by a country in connection with the role of the country as a regional processing country –

wherever it occurs.  No doubt there is some breadth and generosity in those words but, nevertheless, they have content, they have meaning, they have parameters.  Parliament has not authorised, as it were, willy‑nilly, the Executive to do anything.  It has said those things that you can do following the entry of an arrangement must all be in relation to either the arrangement or the regional processing functions of the country.  In an appropriate case the Court could exercise judicial review to ensure the Executive stays within the bounds of those terms. 

So, they are broad, they are generous but they have limits and so the authority embodied in the word “action” including restraint over liberty is, in turn, limited by there being a relevant connection with the regional processing functions.  That is why there was a strain in Mr Merkel’s argument, perhaps put just gently, which was that there was something, perhaps, almost, as it were, arbitrary about 198AHA because the purpose was not defined and the time was not defined. 

This section does have limits in it which prevent it being characterised as arbitrary.  Everything is limited to what is related to regional processing functions and that defines the purpose and that defines the time.  We know under Australian law as it currently stands, by reason of the majority in Al‑Kateb, even though it is challenged from time to time, that the time for which detention may occur in Australia could be very long and may not have a definite end to it, but under current authority the answer to that is still all governed by the purpose, the purpose being under section 198 to remove a person as soon as reasonably practicable to another country. 

The same sort of notion is embodied in this provision that this does not authorise restraints on liberty for a period of time which has no purpose or limits attached to it.  Everything must be limited to what can be related to the regional processing functions of another country.  That is one of the many areas where this case has the interlocking aspect to it. 

I have taken you to the Nauruan provisions to demonstrate that there are purpose and, thereby, time constraints built into the whole Nauruan regime.  That is the regional processing functions.  The Executive can do things which relate to that.  They cannot do things beyond that and the Court can police the Executive if they go beyond that.  So, your Honours, they are our submissions on point 7 which is what is the scope of the authority provided by this provision.  Point 8 can be dealt with fairly rapidly because ‑ ‑ ‑

FRENCH CJ:   Do you accept that the – is it right to characterise 198AHA therefore in the context of Subdivision B on your submissions as a machinery provision which serves the purposes outlined in 198AA and in particular is related to the relocation of unauthorised maritime arrivals?

MR GLEESON:   Yes.  Ensuring that the job is completed in an effective and successful fashion, namely, we know from the earlier provisions they must be taken.  What the earlier provisions stopped short on was what would then occur.  It is just common sense the Commonwealth may be involved in what then occurs to make it effective, to make sure there is processing, and this completes that task.

So we would accept that characterisation, your Honour, and that is relevant to both the Chapter I and the Chapter III issues.  In the Chapter I issue, it really confirms that the law is dealing with an external affair and a matter concerning Australia’s relations with the Pacific Islands, and in terms of the aliens power, the connection between these two parts of the scheme was adverted to by your Honour Justice Kiefel that the people being dealt with in 198AHA are the people required to be removed under 198AD which by definition are aliens.

So, to complete the process of removal which had been contemplated by the earlier statutory scheme but left, as it were, simply for the Executive, carries the same character of a law with respect to the aliens power as much as a law with respect to external affairs.  Your Honours, that is the shorter version of the submission on Chapter I issues.  Obviously there are more detailed points of principle where there is some difference between the parties but none of them should trouble the Court in this case.

So if I could just in bullet point form make these supplementary points on the Chapter I issues.  Firstly, the Commonwealth submits that what Justice Brennan said in Koowarta 153 CLR 168 at 258 is a sufficient statement of principle for this type of case, namely:

When a particular subject affects or is likely to affect Australia’s relations with other international persons, a law with respect to that subject is a law with respect to external affairs.  The effect of the law upon the subject which affects or is likely to affect Australia’s relationships provides the connexion which the words “with respect to” require.

What his Honour said there, of course, was not new.  It was consistent with what Justice Dixon had said in Burgess at 669, Justice McTiernan in Sharkey 79 CLR 157, Justice Stephen in the Seas and Submerged Lands Case 135 CLR 450, Justice Mason in Koowarta 223.  It is also consistent with what Chief Justice Gleeson said in XYZ in the passage referred to yesterday, 227 CLR 532 at 543, paragraph 18, noting that it was pointed out in argument what Chief Justice Gleeson said was not exhaustive as to the scope of the external affairs power. It was illustrative.

There appears to be a feint attempt in the plaintiff’s written submissions, perhaps not orally, to introduce purposive elements and proportionality exercises into the external affairs power.  That is not consistent with principle.  This has not been seen to be a purposive power to date and we would resist that endeavour.

Your Honours, the supplementary points in respect to aliens, the aliens powers were these:  Mr Lenehan appeared to rely upon Williams (No2) 252 CLR 416 at 461, paragraph 50, to argue that a law which merely conferred capacity on the Commonwealth to take action in relation to aliens was not a law with respect to aliens because it did not adequately affect their rights and liabilities. We would reject that as a limitation upon the aliens power.

He also sought to draw some support from Justice Brennan in Cunliffe 182 CLR 272 at 315 to 316 that a law must on its face seal off aliens from non‑aliens. That is not what his Honour said. His Honour said it would suffice if it did so, sufficient but not necessary. Finally, he seemed to argue that 198AHA did not sufficiently ensure that the regional processing country would do regional processing and thereby went beyond the aliens power. Our answer would be the aliens power is not limited to processing of refugee claims but, in any event, the authority here in respect to an arrangement is concerned clearly with that matter.

Your Honours, if it is then convenient, can I come to what is probably left as the heart of the case which is the Chapter III issue.  It should be clear from what I have said that if the Court rejects paragraph 15 of the plaintiff’s outline we would submit no Chapter III limit could possibly be infringed.  But, in any event, can I say something first about Lim and what it stands for and ask your Honours to go to the case -176 CLR 1.

There is some dispute between the parties as to both limb one and limb two and what they mean and can I put the Commonwealth’s submission on those questions.  As to limb one of Lim, it is found on page 19, and then I will come to limb two of Lim, found on page 26 to 31.  Now, as to the first propositions on page 19, if your Honours would forgive me, it is quite important to look very closely at the structure of the paragraph.  The first sentence is as follows:

Under the common law of Australia and subject to qualification in the case of an enemy alien in the time of war, an alien who is within this country, whether lawfully or unlawfully, is not an outlaw.

The second sentence which follows as from the first is:

Neither public official nor private person can lawfully detain him or her or deal with his or her property except under and in accordance with some positive authority conferred by the law.

There are a series of references then provided.  Now, as stated, first of all, that is a common law proposition.  It is not a constitutional proposition.  Secondly, it is a proposition tracing back to Magna Carta and it is indicating that because the alien, except in time of war, is not an outlaw, he or she has this protection of the common law. 

Thirdly, following from that, it is not merely a proposition about the Executive.  It is neither public official nor private person can lawfully detain the alien or deal with his or her property except under a positive authority conferred by the law.  So at that point, as a common law principle applicable to aliens who are within the country, it binds public and private officials, federal or State, be they public officials, not to engage in these deprivations of right without positive authority.  The next sentence narrows the proposition down but again is a common law proposition:

Since the common law knows neither lettre de cachet nor other executive warrant authorizing arbitrary arrest or detention, any officer of the Commonwealth Executive who purports to authorize or enforce the detention in custody –

I interpolate they are the critical words again, “detention in custody” –

of such an alien without judicial mandate will be acting lawfully only to the extent that his or her conduct is justified by valid statutory provision. 

At that point, the dicta has narrowed down to the Executive and, indeed, the Commonwealth Executive the way it is stated, although it appears to be the common law which is informing this proposition.

Now, to the extent there has to be justification by a valid statutory provision that, of course, is not completely exhaustive because the common law would know powers of arrest in other circumstances in which the Executive could engage in detention of persons without a statute.  But, ordinarily, it is pointing to a statute as the likely place to find the authority. 

Now, that is a literal reading of the paragraph.  Of course, we need to ask where further does it take us and although the propositions appear to be expressed in terms of what occurs to an alien within the country, one immediately asks the question what happens if it is outside the country?  It is not a great extrapolation from this paragraph, given our modern understanding of the conflict of laws, to say that in circumstances where the common law of Australia is applicable to a cause of action under the choice of law rules, then one would expect these sorts of rules to apply.

So, for that reason, one might say in a case where on the high seas, on an Australian vessel, the common law would be the chosen law, then this or some similar principle would apply.  Of course, much to the contrary where the conduct is occurring in another country and where the choice of laws would direct attention to the law of that other country. 

Now, for that reason, the plaintiff’s choice not to run a tort case, not to run a false imprisonment case, not to run a habeas case means that, in a sense, the plaintiff has not engaged with the limb one principle.  Although it invokes the principle and says it applies, the plaintiff has not really engaged with the question of whether the common law of Australia or how it could be applicable in Nauru in the present circumstances and that is a difficulty with the plaintiff’s extrapolation of limb one.

So that would be the first possible extension –I will call it extension, but it is really a reading consistent with principle of this dicta, namely, that there could be cases where outside Australia the conflict of laws rules permit the common law of Australia to apply.  I will just reference there, as I mentioned earlier in CPCF v. the Minister (2015) 89 ALJR 207, that was the type of matter adverted to by your Honour Justice Bell and Justice Hayne, particularly between paragraphs 141 and 148. So that is there. In short, we do not have those sorts of CPCF issues because this plaintiff is not running a case whereby the common law of Australia is the chosen law in respect to a cause of action.

Your Honours, there is one further extension, as I might put it, or perhaps elaboration, of this passage, in particular the third sentence where there is perhaps room for debate.  When the third sentence of the passage narrows the proposition down to the Executive, one might ask is this still speaking of the common law or is this speaking of some richer provision of perhaps constitutional character whereby it is almost, as it were, pre‑Williams. 

Are the judges pointing towards some proposition about the relationship between Chapter I and Chapter II at the federal level?  I say nothing about the relationship between the Parliament and the Executive at State level in order to keep Mr Donaldson and Mr Dunning in their seats, but just at federal level, is this passage adverting to some more general proposition as between Chapter I and Chapter II that, if the Executive is engaging in detention in custody, wherever, onshore or offshore, that is in the category of cases where it ought to go to Parliament first. 

Now, that would require, we submit, some considerable extension of the language, although one could not rule out that, given what we now know about Williams, this might have something to say about that territory.  For the purposes of this case, even if that third sentence is presaging some form of requirement that the Executive go to Parliament when it is engaging in detention, the short answer is that is what section 198AHA provides.  So, in the end, if a statute is needed because these observations are read in that more generous sense, which should not necessarily occur, we have one, and that is the short answer really to limb one.

Can I then come to limb two, which is pages 26 and following?  The plaintiff says, in effect, it goes straight to Justice Gummow in Fardon, Justice Hayne agreed with Justice Gummow.  Well, that is a reading of Justice Hayne which might be questioned.  Justice Hayne seemed more to be agreeing with the Al‑Kateb analysis.  But the plaintiff says, in effect, do not spend too much time on what was actually said in Lim.

We submit that what is said in Lim is really the place to spend a little bit of time on this part of the case because what page 26 at point 9 commences with is a very orthodox Boilermakers proposition that everything that is being said in this section of the judgment is about Boilermakers and that if one has judicial power of the Commonwealth it can of course only be given to a Chapter III court, and the whole of what follows is an attempt to flesh out that conventional proposition to establish several points, firstly, on page 27 at point 3 that if you have a function which has been established by nature or history as exclusively judicial such as the adjudgment and punishment of criminal guilt, then it can only be given to a Chapter III court; undoubtedly true.

So the starting point of much of this is to say:  is the function which the plaintiff impugns as having been given to the Executive one which is exclusively judicial in character or which can only be done as an incident of an exclusively judicial function?  Then in the next paragraph one looks to substance over form and it is then said:

It would, for example, be beyond the legislative power of the Parliament to invest the Executive with an arbitrary power to detain citizens in custody –

even if it was divorced from punishment and criminal guilt.  Now, that is to indicate that the power to detain – here we are talking about citizens – in custody will ordinarily – not always – will ordinarily be found as an incident of the exclusive judicial function.  One might interpolate there it would also be beyond the power of the Parliament to give to the courts an arbitrary power to detain citizens in custody - not just you could not give it to the Executive - you could not give it to the courts and they were the sort of issues which divide the Court in Thomas v Mowbray.  We then come to the proposition that, putting aside exceptional cases:

the involuntary detention of a citizen in custody by the State is penal or punitive in character and, under our system of government, exists only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt.

So, at that point if you see involuntary detention of a citizen in custody by a State – and whether that is done by the Executive, Parliament or by a court - it will ordinarily, but not always, be regarded as penal or punitive and something which can exist only as an incident of the exclusively judicial function of adjudging and punishing criminal guilt.

Now, pausing there, one thing the plaintiff urges you to do is to completely throw away the relevance to this exercise of punishment.  That is to depart dramatically from the very way it is expressed in these dicta, because it is critical to this exercise to say that ordinarily, but not always, involuntary detention is penal and therefore can exist only as an exclusive judicial function of adjudging and punishing criminal guilt.

When one comes to page 28 and the Justices deal with the qualifications, of course, the qualifications turn out to be quite a few, and they are all set out.  Then at the bottom of the page there is a passage which we would submit has been over‑read by the plaintiff, because the passage is:

Otherwise –

that is setting aside the exceptions –

and putting to one side the traditional powers of the Parliament to punish for contempt and of military tribunals to punish for breach of military discipline, the citizens of this country enjoy –

then we have a further qualification-

at least in times of peace, a constitutional immunity from being imprisoned by Commonwealth authority except pursuant to an order by a court in the exercise of the judicial power of the Commonwealth.

Now, what that is simply telling you almost as a conclusion is that because of the Boilermakers’ principle and because of the exclusive judicial character of the criminal trial and because punishment is ordinarily an incident of that, if there is punishment outside that category one will need to properly identify a legislative or executive purpose which it serves within the Constitution.

So to speak of it as a constitutional immunity is a conclusion rather than something that should be taken as if it were a Bill of Rights provision.  It is really saying if you find involuntary detention in the custody of the State, you must ask what the purpose of it is - why is that occurring - and if you cannot find a purpose other than a penal or a punitive purpose, ordinarily this will be something to be allocated to the judicial power of the Commonwealth.

Now, what the plaintiff seems to urge is that this constitutional immunity, that conclusory language, be treated, as it were, as a Bill of Rights provision, a little bit like Article 5 of the Nauruan Constitution.  So you start by asserting my private immunity has been infringed, you justify that infringement.  Then the plaintiff goes further and says, well, although the exception is not closed they should be treated as almost closed and the Court should be very reluctant to identify exceptions to an immunity.  Now, it is to over‑read this language to impose that sort of constraint on the exercise.  What one must be asking is what is the purpose?  Is it penal in character?  Can it properly exist as an incident of a non‑judicial exercise of power? 

FRENCH CJ:   What limitations on purpose do you import by the term “penal in character”?

MR GLEESON:   In its primary case, it will be the infliction of a harm as a response to a finding of wrongdoing.  That is its primary case.  The extended case is the case of the arbitrary punishment which the Court had referred to back on page 27 which is if they are acts of absolutely no enforceable limits around when and how and why you can inflict harm then it would permit you to do it as a response to wrongdoing and, therefore, suffer the same vice. 

FRENCH CJ:   Well, does it amount to anything which does not have a purpose which can be characterised as “non-penal” is penal?

MR GLEESON:   Probably, yes.  So, where this unhelpful soliloquy is going is to say the critical step here is to say what is the purpose of the primary exercise of executive power that we have before us and then is that a proper exercise of executive power and then is any element of detention properly incidental to that? 

Of course, we know, rushing ahead slowly, the result in Lim was that under the Australian Migration Act the purpose, the executive purpose of exclusion, deportation of the alien is regarded as properly executive and, therefore, detention which is incidental to that purpose takes the same character, therefore, it is not punitive.  That is the ultimate line of reasoning of the Court which we find on page 32. 

The simple answer to the present case is to simply apply the same type of analysis and say, well, what is occurring here is that we have a scheme for executive power which completes the task of removing persons from Australia who have come without appropriate permission, at the same time ensuring that those who have claims to protection have those claims assessed and then that their ultimate restoration of liberty occur consistent with that assessment. 

Now, that is the purpose which is embodied in the original provisions, 198AA through to AD and now taken further by 198AHA.  That purpose, first question for the Court is is that something that is properly non‑judicial in character?  The answer is clearly yes by analogy with what is on page 32. 

To complete the process of allowing for a determination of such claims with a view to determining where the person should reside after their liberty is restored is properly executive in character and any detention which occurs in the context and for the purposes of that power is incidental to it, therefore, takes the same character which is executive and, therefore, as the Court concludes on page 32 at about point 4 is that to that limited extent:

authority to detain in custody is neither punitive in nature –

reference certain cases in the footnote -

nor part of the judicial power of the Commonwealth.

So where we part company from the plaintiff is they really have not at all grappled with the characterisation of the power, the primary executive power being exercised under this scheme.  Sections 198AD, 198AHA, the entry of the MOU, the performance of the MOU, assisting Nauru to process the claims and then ultimately restore the person’s liberties ‑ ‑ ‑

KIEFEL J:   Just so I am clear about it, do you say the purpose in 198AD is obviously to ensure that the purpose to which detention might attach is to remove a person to a regional processing country.

MR GLEESON:   Yes.

KIEFEL J:   The power of detention under your argument, under Lim, attaches for that purpose, but are you contending that 198AHA permits the power of detention to continue after the person has reached the regional processing country?

MR GLEESON:   If that is incidental to the ‑ ‑ ‑

KIEFEL J:   Well, that is it.  Are you saying it is incidental to the purpose of 198AD?

MR GLEESON: Yes, because 198AD has started the process by providing for their removal to another place. It is pregnant in the sense that it left open the obvious question, what will then happen in the country to complete the processing of their claims? Previously that was dealt with under section 61. Now Parliament is regularising that process, and in that process, anything and everything Australia does to assist Nauru to process the claims, is executive in character. So the entry of the Transfield contract, the performance of the Transfield contract, Australian officials sitting on a joint working group, paying of money, that is all executive in character.

It is to assist another country, and to the extent that that other country has arrangements for detention for the purpose of completing the processing, and to the extent Australia assists that, it takes the character.  Our assistance has the same character, namely, executive, and at no point in that process is there any form of punishment for wrongdoing.

FRENCH CJ:   So, if their paragraph 15 is right, it is covered by 198AHA.

MR GLEESON:   Yes.  So, as I have said, if their 15 is wrong, the Chapter III issues are resolved fairly quickly.  Even if their 15 were correct, the answer would be 198AHA; (a) has Parliament authorising the executive to do it, but (b) doing it in the character of something incidental to what is executive, namely, assistance to this other country in the regional processing, all of it designed to complete processing and ultimately restore liberty to these persons after their claims have been assessed.

So that character of it as non‑punitive, we would submit, comes primarily from looking at our scheme, and that is our statutory scheme, plus the MOU which has engaged 198AHA.  If it be necessary to go further, once one looks at the Nauruan provisions to see what the regional processing involves, because it is analogous to what would happen under our Migration Act, it has the same purposive character which is an executive exercise to ultimately determine whether these aliens should be received into the Nauruan community or placed somewhere else and what should happen to their claims.

So, your Honours, that essential characterisation exercise of the primary executive power and the incidental detention, if there be any, we would commend that is the way to resolve this issue, if one reaches the plaintiff’s paragraph 15.  Even if you adopted their conceptual framework, this is a constitutional immunity with exceptions:  we have an exception.  In effect, you have still got to do the same characterisation exercise to find the purpose and to find that to which it is reasonably incidental. 

So in the present case, we would urge that just within a Lim analysis itself before one gets to Justice Gummow one can answer the problem.  If one were attracted to Justice Gummow’s reformulation, one would still be confronting the same question, namely, is this an exception to the immunity and one would find there is an exception.

In terms of Justice Gummow, we have indicated in our written submissions that to date his view has not found acceptance with the majority of the Court and, of those Justices who have had to address this conceptual question, in fact most have cleaved closer to the language in Lim itself.  That is not to say the distinction between punitive and non‑punitive is easy or that it is clear, and that was a point Justice Hayne made in Re Woolley, and Justice McHugh made that, but as to its conceptual utility it seems still to be important and that the Justices in Lim continue to insist in about four or five places that you ultimately come back to say is it punitive and is it an exercise of the judicial power of the Commonwealth is, we think, rather important to this area of discourse.

Just one final observation on Lim, in most cases where a Boilermakers’ exercise is involved, the endpoint of an argument would be that this power is illegitimately being conferred on the Executive and it ought to be conferred on a court.  It is judicial power of the Commonwealth and so a Chapter III court should be exercising it.  If one applies that sort of analysis here, it is revealing in terms of the plaintiff’s case, because the plaintiff is not arguing, and could not argue, that the judicial power of the Commonwealth could be applied by Australia to determine whether people are detained in Nauru.  It could not by reason of sovereign equality.

So the argument is not that somehow Parliament should have constructed a scheme where the Chapter III courts determined the length of detention in Nauru, but rather it is an argument about absence of power in respect to any arm of government, that no arm of government in Australia can have involvement at a low level or a high level in detention offshore even where the purpose is one that could properly be performed onshore, and that is why I commenced with that point at the beginning, that really it is a rather stark conclusion the plaintiff seeks.

Your Honours, in terms of the outline, I have now sought to cover most of paragraph 9 and you will see from paragraph 9 that we have put our argument at the level of principle as to how one understands Lim.  Then in 9(b)(i) and (ii) we have put our primary and easiest answer to this case, which is whatever way one understands Lim, this will be a case where it is properly executive power.

The next answer down is, of course, the factual one, that there is no detention in custody by the Commonwealth.  I have covered that, in any event.  Our final answer which is described as the third answer is found in our written submissions at 66 and 67 which hinges on the earlier methodological debate as to how one understands Lim.  So, we make that point but we submit that the earlier two points should probably be enough to dispose of this part of the case.

GAGELER J:   Mr Solicitor, could I ask you a question about paragraph 8 of the plaintiff’s outline of submissions?

MR GLEESON:   Yes, your Honour.

GAGELER J:   Do you accept the proposition in the first sentence of paragraph 8?

MR GLEESON:   No.  Firstly, the plaintiff is confusing some statements in the cases about the Australian statutory scheme and how it may comply with the Chapter III limit and the larger question of what is the Chapter III limit. 

GAGELER J:   So the temporal limit is not a Chapter III limit, you say?

MR GLEESON:   No, that is a statutory limit which brought the Australian scheme comfortably within the Chapter III principles, not a Chapter III proposition per se. 

GAGELER J:   If the temporal limit is a Chapter III limit, is there a temporal limit in this legislation?

MR GLEESON:   Yes, in the very same sense there is in the Australian legislation once one accepts Al‑Kateb, namely, in the Australian legislation there is an obligation to remove a class of persons which is to be effected as soon as reasonably practicable.  The time that may take could be long or short and that is accepted as adequately satisfying those types of limits in the case.  In the present case the limits come through the concept that the assistance is only in relation to the regional processing functions of that other country. 

That is why I said earlier that the Court could, on judicial review, police whether the regional processing functions of a country have meaningfully come to an end.  If they have meaningfully come to an end,

then the authority in 198AHA runs out.  So, to say temporally there is a limit, not only is that not a Chapter III limit but even if it were it has to be understood by looking at how the scheme works. 

Of course, the issue in S4, which was not one of the most glamorous outcomes for the Commonwealth, was about a hundred miles away from the issues in this case.  It was a scheme which had – with exercises of power which created very, very grave difficulties in terms of properly dealing with people’s claims in time.  So it was not really a case about these statutory limits, but the plaintiff’s paragraph 8 really – that is why they have over read Lim because you do not open Chapter III of the Constitution and find paragraph 8 and you do not open Lim and find paragraph 8.  Really, we would urge a lot of caution about the Court adopting a proposition as broad as paragraph 8, and how the plaintiff can be citing Al-Kateb in support of paragraph 8 is pretty hard to fathom unless they are asking the Court to overturn it. 

Your Honours, that is all I propose to say on Chapter III, unless there were questions, because that really is the battleground of the case.  I think on the remaining points on the outline, the reliance upon the Financial Framework provisions is in the alternative and unlikely to be necessary in this case.  I will leave that to Mr Donaghue and prospectively adopt what he says on that.  The non‑statutory executive power - paragraph 11 – is unlikely to need to be reached in this case, for the same reasons as in CPFC and I rely upon our written submissions for that.

As to paragraph 12, this is the very strange argument from the plaintiff that although 198AD in terms requires her to be taken to Nauru, one has to read that section down or qualify it so as to say it does not in fact require that in circumstances where there may or may not be restrictions on liberty of particular types in Nauru, and we would say simply that the plain mandate of 198AD cannot be read down on any view.  The plaintiff is required to be taken there.  If there was any strength in any other part of the plaintiff’s case, the result would be the Commonwealth could not do things in respect to what happens to her there afterwards.  But it does not give her some escape from section 198AD.

If your Honours will forgive me for being relatively short on at least paragraphs 10, 11 and 12, what I wanted to then do is to hand over to Mr Kennett for our paragraphs 13 and 14, and I have already made at the beginning of our submissions the observations about how the Court would approach relief should it get to that in this case.  If that is convenient, I will hand over to Mr Kennett.

FRENCH CJ:   Thank you, Mr Solicitor.  Yes, Mr Kennett.

MR KENNETT:   Your Honours, it falls for me to deal with the issues concerning the Constitution of Nauru, our first proposition in relation to which is that on our primary case, as also I think on the plaintiff’s primary case, your Honours will not reach that issue.  Insofar as there is still alive a prayer for injunctive relief in the matter to restrain removal of the plaintiff to Nauru under section 198AD, paragraphs 94 to 96 of our written submissions explain why the lawfulness or otherwise of detention in Nauru does not have a bearing on the success of that prayer. 

Of course, in reading that, your Honours will need to step back to paragraphs 89 to 93 for the matters relating to the construction of that section which the Solicitor‑General touched on a few moments ago.  Insofar as the effect of section 198AHA is concerned, and thus the authority of the Commonwealth to do what has been done in the past, paragraph 42 of the written submissions explains the limited effect of that section and the Solicitor‑General expanded on that earlier in the day. 

The consequence of that limited effect is that the provision is only directed at the capacities or authority of the Executive Government as a matter of the relationship between Chapters I and II of the Constitution, as the Solicitor‑General said, and what the section does it does regardless of whether particular actions would be valid or invalid or lawful or unlawful in the place where they occur. Those questions of lawfulness arise in different proceedings to the present one, so most obviously perhaps, a claim for unlawful imprisonment or habeas corpus brought in the courts of the place where detention is alleged to have occurred or to be occurring.

So on our primary case at least one does not reach any question about whether the detention of the plaintiff was unlawful under the law of Nauru.  Our next proposition is that if the case does turn on such a question, the answer to the question is that the relevant provisions of the Nauruan statutes, which are conveniently encapsulated in paragraph 66 of the special case, are to be taken to be valid by operation of what one can describe at the risk of some looseness perhaps as the Act of State doctrine, application of the principle for which we contend tells the Court not to go behind those statutory provisions, apparently regularly enacted, and to treat those provisions as forming part of the law of Nauru.

There are, of course, several strands of principle that tend to be referred to under the general heading of Acts of State and they are perhaps not always properly separated from each other.  The principle upon which we rely is discussed, we would say correctly, by the Supreme Court of the United States in WS Kirkpatrick 493 US 400, which is on the list of authorities. I just wanted to take the Court briefly to some passages in that case.

Justice Scalia wrote for the court and at page 404 his Honour noted that the courts – I should say this was a case where allegations were made about contracting a foreign country having been secured by a bribe and the party which was the beneficiary of that contract put on an application to say the court should not go into this because it was calling into question the acts of foreign officials.  At page 404, his Honour noted that the:

Court’s description of the jurisprudential foundation for the act of state doctrine has undergone some evolution over the years. 

His Honour referred to how the basis for it had been described in Oetjen v Central Leather Co and how it had been described in Sabbatino’s Case.  Then at page 405, his Honour says about the middle of the page that certain matters – in the particular case:

the factual predicate for application of the act of state doctrine does not exist.  Nothing in the present suit requires the Court to declare invalid, and thus ineffective as “a rule of decision for the courts of this country” . . . the official act of a foreign sovereign.

In every case in which we have held the act of state doctrine applicable, the relief sought or the defense interposed would have required a court in the United States to declare invalid the official act of a foreign sovereign performed within its own territory.

Just pausing there, we read his Honour not as referring matters in which relief is claimed to declare explicitly something done in a foreign country invalid, but rather to cases where the resolution of the issue between the parties necessarily requires a conclusion to that effect.  His Honour refers to the very well‑known case of Underhill v Hernandez and again to Oetjen and to Sabbatino and then on page 406 we get to the crux of that case which was that the:

Petitioners point out, however, that the facts necessary to establish the respondent’s claim will also establish that the contract was unlawful . . . Assuming that to be true, it still does not suffice.  The act of state doctrine is not some vague doctrine of abstention but a “principle of decision binding on federal and state courts alike.” . . . As we said in Ricaud, “the act within its own boundaries of one sovereign State . . . becomes . . . a rule of decision for the courts of this country.”

So we would respectfully adopt that statement of the effect of the principle, and then his Honour points out one of the important limits to it, that these:

issues only arise when a court must decide–that is, when the outcome of the case turns upon‑the effect –

that is the legal effect –

of official action by a foreign sovereign.

Then just finally and pithily, at page 409 in the last paragraph on the page, his Honour says that:

The short of the matter is this:  Courts in the United States have the power, and ordinarily the obligation, to decide cases and controversies properly presented them.

The same holds here in Australia, of course, and then his Honour says:

The act of state doctrine does not establish an exception for cases and controversies that may embarrass foreign governments, but merely requires that, in the process of deciding, the acts of foreign sovereigns taken within their own jurisdictions shall be deemed valid.

GAGELER J:   Mr Kennett, what here is the official act of a foreign sovereign?

MR KENNETT:   Well, relevantly to what I am addressing at the moment, your Honour, it is the enactment of section 18C of the Regional Processing Centre Act.  It is the promulgation of relevant parts of the Immigration Regulations and of the centre rules which brought about, at least on their face, the requirement upon people in the plaintiff’s position to be in the centre without - unless they had permission to leave it.

GAGELER J:   So, if this had been a tort case, as the Solicitor‑General says it should have been, and the plaintiff had sued Wilson Parking, for example, for false imprisonment and it was accepted that according to the relevant choice of law rules, it was the law of Nauru that applied, and if the defendant in that action had pleaded in defence authority to detain pursuant to Nauruan law, you say that it would not be possible by reason of the Act of State doctrine for the plaintiff then to say, by way of reply, that the Nauruan law relied upon as authority to detain is unconstitutional.

MR KENNETT:   That is what would follow, your Honour, if the proceeding were brought here.  If it were brought in Nauru, of course, there would be no problem.

GAGELER J:   Is there any authority that has applied the Act of State doctrine in that way?

MR KENNETT:   None that I can identify.  There is the early decision of this Court in Potter v Broken Hill Company which, in effect, went the opposite way.  As soon as a defendant had put the issue of the patent – the lawfulness of the New South Wales patent in issue, the Court decided that the whole thing had become non‑justiciable which is perhaps a conclusion that might be revisited if the issue ever arose again. 

But in most of the cases that we – well, all of the cases that we have reviewed, generally there is a way around – there is some reason why this principle which, of course, on the face of it, is a stark one, does not apply.  It is subject to various limitations, of course, that will not be applied when the foreign Act of State is an egregious breach of international law or human rights and one suspects that in ordinary tort cases the plaintiffs would ordinarily go to a court where they can be sure that all of the issues can be dealt with. 

So, we would, having identified what we say is the relevant principle here as enunciated in Kirkpatrick but also just note that I do not want to take time by taking the Court to the passages, but we would respectfully invite reference to what the Court of Appeal said in Belhaj v Straw [2015] 2 WLR 1105, particularly at paragraphs 67 to 68.

FRENCH CJ:   You agree with the proposition at paragraph 81 of that judgment that:

the doctrine may be disapplied on grounds of public policy where there is a violation of international law or a grave infringement of fundamental human rights.

MR KENNETT:   Yes, we do.  We say we are not in that territory here but, yes, there are cases where that happened.  I think Kuwait Airways is one such case.

FRENCH CJ:   Deprivation of liberty is not a violation of fundamental human rights?

MR KENNETT:   Deprivation of liberty – deprivation of the liberty of non‑citizens who arrive in a country without permission while their claims for permission are dealt with is something routinely done by countries around the world and so long as it is subject to ‑ ‑ ‑

FRENCH CJ:   If that is the question, I mean, I am not assuming the answer, if that is a question as to whether there has been a valid deprivation of liberty having regard to the requirements of the Nauruan Constitution, does the Act of State doctrine apply in light of the proposition with which you have just agreed?

MR KENNETT:   Your Honour, if it were put that what happens in Nauru is a fundamental breach of human ‑ ‑ ‑

FRENCH CJ:   Assuming it is relevant to an issue in these proceedings, anyway.

MR KENNETT:   We would have to have a debate about it and if your Honours held that it was then the consequence would be that the principle I am now seeking to rely on would not apply.  So this is not, as I think I have probably said, a discretionary rule of restraint or a proposition about justiciability, it is not something that results in the absence of a matter under Chapter III.  It is, as Justice Scalia puts, a principle of decision that dictates absent exceptions or limitations, an answer to your question that arises in a matter.

So the doctrine, as I have just noted, particularly in response to the Chief Justice, has limitations and exceptions.  As Kirkpatrick itself demonstrates, it only properly applies when the validity or legal effectiveness of an act of a foreign government needs to be pronounced upon.  It has nothing to say when a party merely seeks to prove that particular act occurred.

KIEFEL J:   Mr Kennett, do you say what was said in Kirkpatrick by Justice Scalia is consistent with the approach taken by this Court in Moti?

MR KENNETT:   It is, your Honour, and I will come to Moti very shortly obviously.

KIEFEL J:   I will not take you out of your sequence then.

MR KENNETT:   I will obviously have to deal with that, but just noting that the proper limits of the doctrine as expounded in Kirkpatrick explained the decision of the Full Court of the Federal Court in Habib because Mr Habib in that case sought to prove that certain foreign officials had committed actions and that those actions breached Australian law, but he did not need to take the further step of alleging that official acts of a foreign government were beyond power or legally ineffective, so Habib, although it is a complicated case to read, in the end was not about the matter that this present issue is about.  It was not about the legal effectiveness of actions of a foreign sovereign.

The other point is that the principle falls away in certain circumstances where one might think it would otherwise apply.  One is the case of breaches of human rights that we have mentioned and another is – and this is noted in Belhaj in paragraph 91(5) - a situation that corresponds exactly with the circumstances in Moti. 

The court in Belhaj in carving out that exception where a person is brought to the country in order to face trial and wants to argue that the trial is an abuse of process because they were brought to the country in breach of law, a person in that situation is able to say, as Mr Moti said, that the process of bringing them to the country was an unlawful one and that the trial is therefore an abuse of process.

So the Court of Appeal in Belhaj lists that as one of the exceptions to the doctrine and their Lordships cite two cases there which were also cited in Moti, and that situation is one where we would accept that there is an overriding interest in the integrity of the criminal justice system, so the courts have decided it has to trump the considerations of comity that underlay the principle in other circumstances.

GAGELER J:   These are exceptions, are they, to a common law principle?

MR KENNETT:   Yes.

GAGELER J:   Within the Australian common law, might there be an exception where what is in issue is the lawfulness of the conduct of Commonwealth officials?

MR KENNETT:   There, well, I suppose, may be.  I would have to say no.  A case about the lawfulness of conduct of Commonwealth officials is like any other matter in federal jurisdiction a case about the parties’ legal rights and obligations and there are various doctrines of the common law which prevent determination of such controversies according to what one might otherwise think their merits would be; public interest immunity is one, various advocates’ immunities and foreign state immunities.

There are various doctrines that interfere with the determination of a case according to its merits for public policy reasons and one of them, we would say, is this principle deriving ultimately from considerations of sovereign equality and comity that the courts do not as a general rule go behind official acts of foreign sovereigns.  So, I do not think I would accept a general exception wherever the case concerns lawfulness of something done by the Commonwealth. 

Now, the plaintiff in her submissions in reply at paragraph 59 cites a passage in Dicey and Morris, which asserts that:

there may be circumstances in which foreign legislation may be held by the English court to be unconstitutional under the foreign law.

It is not a particularly helpful statement without some explanation of what the circumstances are, but if one goes to the cases which the learned authors cite – and I am not proposing to trawl through them here – but the cases which the learned authors cite for their proposition, two of which are also cited by the plaintiff in reply in footnote 53, are almost without exception not cases that are on point for us presently.  Only one of those cases, on our reading of them, involved pronouncing on the validity of legislation of another jurisdiction, and that was the Canadian case of Hunt (1993) 4 SCR 289, and that concerned two provinces in a federation rather than truly foreign states.

Now, the written submissions at paragraphs 104 and 106 make some points about the, I suppose, awkwardness here of pronouncing upon the validity of things done or validity of legislation of a foreign state.  I did not particularly want to dwell on that, it is there in the written submissions and I am sure that your Honours have probably grasped those points already.  For these reasons, we say if the lawfulness of detention under Nauruan law is in issue, it is to be deemed, for reasons I have indicated, lawful, and the Court should not express its own opinion about the Constitution of Nauru.

If that submission is not accepted and the Court does need to look at the Nauruan Constitution, the issue would seem to be framed in this way.  Article 5(1) is a prohibition on deprivations of liberty.  It speaks, we would say, about actions, not at least in the direct sense about laws.  Then, there is a series of exceptions, one of which is paragraph (h).  The exception in paragraph (h) depends on the deprivation of liberty having attributed to it particular purposes. 

So the exercise calls for a characterisation, as it were, of the deprivation of liberty – not, as I apprehended Mr Merkel might have been suggesting, a characterisation of the law, the piece of legislation in some more general sense that requires that deprivation, although, of course, the law under which the deprivation takes place will at least ordinarily dictate the purpose of it.

Then, if the detention in an individual case does not satisfy one of the paragraphs in 5(1), the result is that the law purporting to require it is void to that extent.  Your Honours were taken to Article 2 yesterday, which has that effect.  We would also note as a preliminary observation that that paragraph (h) of Article 5(1) has two limbs to it.  One of them refers to preventing unlawful entry; the other refers to ensuring lawful removal.  I will have a little bit more to say about those in a moment.

Having noted those things about the issues that arise, we would make four very short points.  Firstly, as to the future, because of recent developments which your Honours have heard about, it is now very clear that the plaintiff would not be deprived of her liberty in any relevant sense if returned to Nauru.  Article 5 would not be engaged at all and there is, therefore, no need to dwell on the matters discussed in paragraphs 118 to 121 of the written submissions.

Secondly, as to the validity of the plaintiff’s detention in the past, what the Court would be doing here would be making a finding of fact about the content of foreign law, which would at least ordinarily be determined by seeking to understand what a Nauruan court would find about this if the issue came before it.  The first place to look in that regard is the judgment of the Supreme Court of Nauru in the Attorney-General v the Secretary of Justice which is at page 590 of the special case book, and your Honours have been taken to it. 

I just note a couple of short things about that.  At page 592, at paragraphs 11 to 14, his Honour notes several clauses of the then current memorandum of understanding with Australia, which provide a large part of the setting for what occurs.  The clauses which his Honour refers to are all contained in similar, if not identical, language in the current memorandum of understanding, which the Solicitor‑General referred your Honours to this morning.  The difference is that what is referred to as clause 11 has now become clause 15 because some other clauses have been inserted and what is referred to as 14 has now become clause 19. 

His Honour, at paragraph 21 on 595 set out the purposes for which at that time RPC visas were granted, and at paragraph 22 the conditions that applied to those visas.  Your Honours have been taken to those passages.  His Honour’s conclusion was that paragraph (h) of Article 5(1) applied because the detention there could be seen as being for the purpose of ultimate removal and it was important to his Honour’s conclusion, noted at paragraph 72 and at paragraph 75, on page 603, that it was never the intention to keep people in Nauru other than temporarily.  Everybody was to leave - that is, all transferees were to leave eventually and thus removal could be seen as the endpoint of the process.

The change which has occurred since then, and which, as we understand, the plaintiff relies upon, is the introduction of temporary settlement visas.  That, in our submission, would not lead a Nauruan court to distinguish the present circumstances from those in the case decided by Justice von Doussa.

If your Honours go to page 506 of the special case book, one sees the current provision, effective since May 2014, for temporary settlement visas, and the clue is in the title.  By subclause (2) of clause 9A, they have a duration of six months, and by subclause (4), they can be cancelled “at any time”.  This is a long way from a right of permanent residence, and does not alter the conclusion of his Honour that the endpoint of the regional processing scheme is that people leave.

It is also useful to note, in volume 2 at pages 792 to 793 is an example of the current form of the visa.  On page 793, starting about halfway down the page, one sees a record of the purposes for which a temporary settlement visa is granted, and the relevant one is:

To enable a person . . . recognised as a refugee . . . to remain in Nauru pending the making of arrangements for his or her settlement in another country –

So we still have a regime on the face of the Nauruan provisions that is directed in the end to everybody leaving.  To say that the detention is now for the purpose of regional processing, as our friend did yesterday, really does not add anything to the analysis because, of course, there can be more than one relevant purpose.  Consistently with what Justice von Doussa decided, one reason why there was detention up until recently, within the regional processing regime, was to be able to effectuate that intention that in the end everyone would leave.

The second point that we would make is that even if people found to be refugees were being settled in Nauru more than temporarily, keeping those people in detention prior to the determination of their refugee status would still be properly characterised as being for the purpose of ensuring their lawful removal.  The point here is that prior to the determination of their refugee claims the process has two possible endpoints - either removal or grant of permission to stay.  The detention at that point of the process can readily be characterised as being effective in order to ensure that if removal is the endpoint in the individual case that can be readily affected.

If I was wrong about that, it would seem to follow that the detention of people in the regional processing centre could only ever be valid if there was no possibility of anyone getting a visa and staying.  That would have the strange result that relaxing the detention regime would make it invalid.

The final point that we would make about this is that ‑ this relates to the first limb of paragraph (h) – it was conceded, appears to have been conceded before Justice von Doussa that this part of paragraph (h) did not apply.  One sees that at paragraph 61 of the reasons at page 601 of the special case book. 

We would seek to submit contrary to that concession that the first limb would apply in the present circumstances. We would say that read in context, the reference in paragraph (h) to preventing unlawful entry into Nauru is not limited to physical entry to the island. This must be so, since by reason of Article 3 on page 92 of the special case book, guarantees of rights in the Constitution are there for the benefit of people in Nauru, and the deprivations of liberty that are precluded by Article 5 would, at least ordinarily, be deprivations occurring in Nauru.

So that the paragraphs of Article 5 should, we submit, be understood to relate to people who are already physically in the country.  So, in that context, we would submit that the reference to preventing unlawful entry should be understood to at least include preventing entry into the Nauruan community.  In other words, people may be held in detention consistently with paragraph (h) in order to keep them separate from the community while their applications for permission to remain and permission to become part of that community are being dealt with.

That analysis, of course, reflects one of the purposes for which immigration detention in Australia has been held to be valid repeatedly.  There is a collection of references for that in footnote 134 of our written submissions.  So, for each of those reasons we would say if this matter came before a Nauruan court, your Honours would infer that the Court – your Honours would find that that court would regard the plaintiff’s detention in the present case as being valid so that if questions of validity under Nauruan law arise, the answer is that detention was and would be consistent with the Nauruan Constitution.  Your Honours, those are the submissions of the Commonwealth defendants.

FRENCH CJ:   Yes, thank you, Mr Kennett.  Mr Donaghue.

MR DONAGHUE:   Your Honours, just before lunch yesterday, Mr Merkel made submission to the effect that it has always been the plaintiff’s case in this proceeding that the law of Nauru is irrelevant to the case that they put and that the case can be decided entirely independently of the law of Nauru.  My main purpose in oral submissions, your Honours, is to examine the assumption that underpins that proposition that it is necessary that there be a Commonwealth law that provides the foundation for all action that is taken by either the Commonwealth or, more importantly, by its contractors in Nauru.

In saying that we accept, of course, as is established by Williams, that there does need to be a Commonwealth law that authorises entry into and payments under the Transfield contract.  We accept there must be such a law, but there is one - both 198AHA and also 32B of the Financial Framework provisions.

We also accept that if it were the case that the Transfield contract imposes an obligation to detain people who are transferred to Nauru, then there would also need to be a Commonwealth law capable of, and in fact having, the operation of authorising that step and, if your Honours were to construe the facts in that way, again we would say consistently with Mr Gleeson’s submissions this morning, there is such a law – 198AHA, particularly when attention is focused on subsection (5).

But, in our submission, absent any requirement under the contract to detain transferees, which we submit is the true position under the contract for reasons I will come to in a moment, the question of whether there is a Commonwealth law that authorises detention in Nauru is simply irrelevant to the validity of the contract.  The power for the Commonwealth to enter into a contract that does not require detention does not then need to be supported in some way by a Commonwealth law that would authorise detention.

Detention, to the extent that it occurs, is a product of decisions taken in Nauru by the government of Nauru and authorised by the law of Nauru, and that set of legal arrangements operates entirely independently of, and need have no parallel in, Commonwealth law.  So, our friend’s assumption that it is possible to look at what is happening under the regional processing arrangements and just focus attention completely on whether one can find a Commonwealth provision that authorises everything that is being done is, in our submission, not correct. 

That is, as our oral outline should make clear, the main intended focus of our oral submission.  The outline suggests that we also propose – this is paragraphs 8 through 10, to examine the Act of State type issues.  We will say little, if anything, about that in light of what Mr Kennett has just put to your Honours, and similarly in relation to the validity of Nauruan laws, 11 to 13, we will be extremely brief.  So, my focus is on paragraphs 1 through to 7.

FRENCH CJ:   Now, can you indicate what you are saying within that framework that differs from what has been put to us by the Solicitor‑General for the Commonwealth?

MR DONAGHUE:   I am intending to avoid repetition, your Honour.

FRENCH CJ:   I just wanted to see how ‑ ‑ ‑

MR DONAGHUE:   Yes, indeed – in oral submissions, the learned Solicitor‑General got closer to the propositions that I am proposing to advance than we think the Commonwealth did in writing.  But, in essence, your Honour, the point I am going to develop is this, that when one looks at what Transfield and Wilson employees are doing, neither of whom are officers of the Commonwealth, there is no reason why one would seek or need a source of power in Commonwealth law for their actions within Nauru.  That is the first point.

The second point is that even if it were to be the case that the Commonwealth was doing directly within Nauru the things that are presently being done by contractors, it would still not be necessary to find a source of authority in Commonwealth law. That, your Honour the Chief Justice, is probably the main point that has not arisen, because our point – to put it very briefly – is that the plaintiffs have assumed that there is to be found in Chapter II of the Constitution an equivalent implied limit to that that is found in Chapter III.

So, while it is clear in a Chapter III context that a federal court can exercise the judicial power of the Commonwealth and only the judicial power of the Commonwealth, it is not the case, in our submission, that the Commonwealth Executive can exercise only the executive power of the Commonwealth.  Indeed, the cases in this Court make it clear that it is possible for the Commonwealth Executive to be invested with functions that are not part of the executive power of the Commonwealth. 

So if a Commonwealth officer takes action in Nauru it is possible, subject to legislative permission from the Commonwealth Parliament, it is possible for that officer to derive authority for steps that they take from the law of Nauru, the law of the place where they act.  To give perhaps an uncontroversial example, if an AFP officer participated in a search warrant in a joint task force in the United Kingdom you would not expect to find the authority for the coercive action taken for that step in Commonwealth law.  You would look to it in United Kingdom law and as long as Commonwealth law permitted the investiture of that function in the Commonwealth Executive, that would be valid.  I accept I need to develop and justify that proposition but that is where I am going.

Before I get there, your Honours, can I start with the Transfield contract and here I can be briefer than I had intended because Mr Gleeson has covered some of this ground.  If your Honours could start at volume 2 on page 611 you will see at the bottom of what is page 8 of the contract clause 3.1.1.  The way this contract identifies the services to be provided are in the schedule, Schedule 1, the statement of works.  The contract there provides that:

Schedule 1 [Statement of Work] of this Contract sets out the specific requirements for the Services to be performed at the Sites.

Then, over the page in 3.1.2:

In accordance with clause 3.3 the Service Provider is required to comply with all applicable laws.  The requirements in Schedule 1 [Statement of Work] are to be read subject to that requirement.

So within its own terms, just within the four walls of the contract, the contract makes it clear that any of the services that might need to be provided only have to be provided under the contract to the extent that that requirement is in accordance with applicable laws of Nauru.  One then sees in 3.3.1 at the bottom of that same page the provision that Mr Gleeson identified that:

The Service Provider must, in performing its obligations in this Contract, comply . . . 

a.all applicable laws, including those applicable in the Regional Processing Country  ‑ ‑ ‑

The point that we would seek to add there is that, when one asks, well, what are those applicable laws, they must include the Constitution of Nauru and specifically the guarantee in section 5 of the Constitution of Nauru that there will be no deprivation of liberty except as authorised by law and, within the context of that constitutional provision, “authorised by law” can only mean authorised by the law of Nauru.  The Constitution of Nauru is talking about authorisation pursuant to or under the law of Nauru.

So that, again just looking at the contractual obligation, the contract is subject to a requirement that, even if one was otherwise to find provisions that would require detention, those provisions are to be read down so that they can require detention only to the extent that that detention is authorised by the law of Nauru.  That, we submit, is a proposition one reaches as a matter of construction of the document that ‑ ‑ ‑

FRENCH CJ:   That might be a convenient moment, Mr Donaghue.  The Court will adjourn until 2.15.

AT 12.44 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.13 PM:

FRENCH CJ:   Yes, Mr Donaghue.

MR DONAGHUE:   Your Honours, before the break I was making good the proposition that the Transfield contract does not in its terms even purport to require Transfield to provide any services in Nauru that would result in detention, unless that detention is authorised not by law of the Commonwealth but by law of Nauru.  If that proposition is correct, in our submission, it is very difficult to see how the power of the Commonwealth to enter into that contract could attract the Lim principles or Chapter III analysis at all because the Commonwealth is not causing or seeking to have anyone do anything that would engage detention of the kind necessary to animate that principle. 

But in fact when one looks at the Transfield contract it is clear that the overwhelming majority of services provided by Transfield, on any view of it, do not contribute or cause to detention, and insofar as there are a small number of obligations that might be said to have that effect they are, on analysis, doing more than responding to whatever the legal requirements of Nauru happen to be from time to time.  Your Honours, can I make that good by taking you just to a few provisions in the Statement of Works, which is the list of services, all of which, as your Honour saw before lunch, are expressly subject to compliance with the law of Nauru.

It is in volume 2 at 624 is the start of the Statement of Works.  If I could ask your Honours just to note the last sentence of clause 1.1.2, this is in the nature of a general background or overview of the services, and the contract there records that:

Host governments are responsible for in‑country arrangements and operations with support being provided by the Australian government.

So that is the backdrop.  If your Honours turn then to page 630, you will see there is a heading on page 46 of contract “Programmes and activities” with a list of things the service provider, Transfield, is required to do, particularly if you look at 3.1.4.  It is necessary to provide educational programs, religious programs, recreation programs and excursions, so many of the activities that Transfield are involved in are the provision of programs or activities of that kind.

On the next page, at 3.7.2 there are provisions requiring the provision of services at the centre such as a shop with various goods available.  There is the provision of a gymnasium required in the operation of the centre.  Looking over the page again at 632, clause 4.5, you see the kind of provision you would expect in relation to people who have been transferred to another country.  They have to be provided with the necessities to live within that country, so there is provision of bedding and clothing and other matters of that kind.

So this is a contract, in our submission, that is providing the obvious kinds of supports that are necessary to people who have been transferred to Nauru, but it is not calling for, at least in any of these provisions, anything that could on any view of it, in our submission, be said to be causing detention.  To the same effect, over the page again on 634 of the special case book, there is a clause dealing with communication management which requires the provision of telephones, computers, printers, internet services, television; all of those kinds of matters.

Mr Gleeson also noted, turning over the page, again at 634 you see under the heading, “Garrison Services”, a summary at 1.1.1 of the many other kinds of activities that Transfield carries out under this contract; cleaning, management, catering, work health and safety, et cetera.  So, in our submission, it is obvious just from a quick review of the contract, that there are many things being done pursuant to this contract that cannot fall within whichever variation of the list of verbs that Mr Merkel has advanced that are said to attract invalidity. 

Just on the question of list of verbs, Mr Merkel said yesterday it does not matter which words are used and in his paragraph 15 of the oral outline, your Honours will have noted the addition of the word “funding”.  That word is a word that has not appeared previously and importantly it does not appear in any of the questions that your Honours are asked, so the questions at the end of the special case ask about the validity of various different kinds of action to the extent that they list the verbs – fund, cause, facilitate, procure, et cetera, but not fund.

So, to that extent there is, we submit, some significance in the language because funding something in and of itself does not cause it, in our submission.  One cannot get to the link one needs to engage the Lim principle just from the fact that the money comes from the Commonwealth, if all of the decisions that are being made about to detain or not to detain are being made independently of the funding arrangement.

In our submission, the true characterisation of what is occurring in this contract is that the Commonwealth has contracted with Transfield to provide services in a context where, depending on what the government of Nauru chooses to do, it may or may not be detention, but that either way there will be a range of services that need to be provided to transferees.  The special case, in fact, recognises that at paragraph 23 where the parties have agreed that on page 5 of volume 1 that:

The performance by Transfield of its contractual obligations under the Transfield Contract, and by Wilson Security of its contractual obligations . . . require the provision of services in relation to persons taken to Nauru . . . who were required to reside at the Nauru RPC upon their arrival in Nauru by reason of the matters set out in paragraph 66 –

which is the list of laws, 18C and the centre rules.  So, that accurately, in our submission, captures what is going on here.  There is detention being required by a set of Nauruan provisions and then within that context a set of services being provided pursuant to a contract entered into between the Commonwealth and Transfield.  That contract follows the detention rather than causes it.  Your Honours, the plaintiff’s factual case, in our ‑ ‑ ‑

FRENCH CJ:   Is it right to say it gives the effect to detention arrangements in a physical sense?

MR DONAGHUE:   To some extent that is so, your Honour, yes.

FRENCH CJ:   Perimeter fences, lighting, security officers ‑ ‑ ‑

MR DONAGHUE:   Yes, perimeter fences, checks on – yes, it does all of those things, although the perimeter fence, in our submission, is not at least completely characterised as giving effect to detention, it also gives effect to security within the centre itself in terms of preventing people from entering rather than just preventing people from leaving and that is, we submit, an important function in terms of maintaining a safe environment within the centre.

What our friends, with respect, are inclined to do is to treat facts that show Commonwealth involvement in regional processing generally as equivalent to facts that show Commonwealth responsibility for detention.  And while there is, undoubtedly, significant Commonwealth involvement in the regional processing regime, in our submission, the facts just do not show that that involvement causes detention or, to use our friends’ phrase, that the detention that occurs is at the will of the Commonwealth. 

Mr Gleeson has addressed your Honours on this in some detail this morning but, in our submission, the analysis that he undertook is compelling in that one looks in vain in the memorandum of understanding, in the administrative arrangements, for anything that suggests that the Commonwealth has even sought or asked for detention.

Your Honour Justice Keane yesterday put to Mr Merkel: can you show us a request for detention anywhere?  His answer, I think, was that the application for the regional processing visa is itself to be understood as the request.  That, we respectfully submit, cannot be right because when the request is made for a regional processing centre visa that potentially engages all of those conditions.  Your Honours have seen regulation 9(6), the first of which is a possible residence requirement.  But if your Honours look at that regulation, which is ‑ ‑ ‑

FRENCH CJ:   Just before you go on, is anything that you are saying about the effect of the Transfield contract saying anything more than what is said in paragraph 76 of the special case in its application to Transfield?

MR DONAGHUE:   Yes, 76 in the special case book is the provision that says we would not have sought, if Nauru had not done so.  It certainly goes that far, but it is not just, in our respectful submission, that Transfield would not have sought to impose such restrictions; it is that when ‑ ‑ ‑

FRENCH CJ:   Well, it would have if you had a contractual obligation to do so.

MR DONAGHUE:   Well, if there had been a contractual obligation to do so and the law of Nauru had permitted it, then no doubt that is correct.  Indeed, as I will come to shortly, your Honour, at one point there is one provision that says Transfield will assist in – use reasonable endeavours to assist in the enforcement of restrictions arising from the visa.  So that is a contractual obligation the content of which varies depending on what Nauruan law requires from time to time.  So we do not cavil with that.

But the proposition I am seeking to make good is that when your Honours look at the relief that is sought in this proceeding, most of it is directed at the Transfield contract.  Your Honours are being asked to order that no payments can be made under this contract.  So I might take your Honours to that actually.  If your Honours look at volume 2, pages 866 and 867, the relief claimed in paragraphs 1(b), (c), (d) and (e) are all directed at the contract and the relief sought is, in our submission, astonishingly wide.  Your Honours are being asked to prohibit any payments under the contract at all and then, in the alternative, payments pursuant to the agreement which have the purpose or likely effect of – list of verbs - causing detention, giving effect to the agreement, et cetera.

So your Honours are being asked effectively to put an end to this contract in circumstances where when you look at the contract it just does not cause detention and, in those circumstances, it is very hard to see why the contract is appropriately tainted, if I use that word, with any detention that might be required by Nauruan law such that the Commonwealth did not have executive power to enter into it.  The question of the validity of this contract and the question of detention in Nauru are just separate issues; the detention in Nauru issue depending on Nauruan law and having nothing to do with the scope of Commonwealth executive power.

So I was, just in relation to the question Justice Keane asked to Mr Merkel yesterday about the visas, going to make the point that the visa conditions themselves, that is, the conditions that automatically arise on the grant of a regional processing visa – I am referring here to regulation 9(6) on page 504 of the special case book – do nothing more than require the holder to reside in any premises that are specified in the visa.  They do not in and of themselves require residence in the regional processing centre.  In order to get an obligation to reside in the regional processing centre, you need something additional, which is the officer of Nauru who issues the visa to choose to specify that premises as the premises where someone is required to reside.

So there is an intervening event between the Commonwealth application for the visa and any restriction under Nauruan law, the intervening event being the decision of the government official of Nauru to choose to impose a restriction of that kind, and the special case deals with the fact that such restrictions have in the past been imposed by the principal migration officer, but there is no requirement and no automatic restriction arising simply by the fact of the Commonwealth application.

So not only does one see no request for detention in the MOU, the arrangements, the visa request, most importantly for our purposes you do not see it in the contract.  There is no provision in the contract that requires transferees to be detained.  Perhaps the point is usefully illustrated, if perhaps slightly rhetorically, by saying if there were, the change in Nauruan arrangements that your Honours have heard about that occurred on Monday would not be effective to release people from detention without some variation of the contract. 

But no one has suggested that the contract itself is going to continue to impose restrictions on liberty despite the fact that those restrictions have been lifted by reason of the Nauruan changes in the arrangement, which tends to illustrate the point that there is nothing in the contract itself that requires detention to occur.  It is all just responsive to whatever the Nauruan arrangement happens to be from time to time.

Probably insofar as the contract deals with this topic of detention at all, your Honours will find the provisions at 639 in the special case book in section 4 of the Statement of Works under the heading “Security Services”, and these are the provisions I think your Honour the Chief Justice was asking about.  So, one sees in 4.1.1 a reference to the “safe and secure environment” in the centre.  Clause 4.1.3 is interesting in the sense that it contemplates that:

The Department will provide security infrastructure at the Sites, which may include perimeter fencing, lighting towers and an entry gate.

But that is not specified as a mandatory or requisite element of the contract.  Then one sees the clause I flagged earlier, 4.2.1, and this is really the high point of the case against us on the contract:

The Service Provider is required to take reasonable steps to ensure:

a)Transferees and Personnel behave at all times in accordance with relevant provisions of the visa –

So that, we submit, falls well short of a contractual obligation to detain.  It is nothing more than an obligation to take reasonable steps to do whatever Nauruan visas from time to time require and if as now seems to be the case those visas will not require residents at a centre, then the contract does not require any enforcement of residents at the centre.

Now, in terms of what the contractors under this contractual arrangement and your Honours are looking here at the Transfield contract, there is a subcontract with Wilson that reflects a number of the obligations through to the subcontractor.  The special case gives some information as to what the role of contractors on the ground actually is in Nauru and it is fairly limited.  So, if your Honours look at paragraph 69 of the special case on page 19, you see on this page a few relevant facts.  At 69 it is agreed that:

If the plaintiff attempted to leave RPC3 without permission and Wilson Security staff were unable to persuade her not to do so, the staff would have sought to gain the assistance of the Nauruan Police Force to deal with her unauthorised departure from RPC3.

So there is no evidence before the Court.  Indeed, there is agreement that force is not going to be used directly by the Wilson employees, that what happens is that Nauruan police are asked to enforce the law.

FRENCH CJ:   They could do so except under the authority of some law of Nauru. 

MR DONAGHUE:   That they could not stop them?

FRENCH CJ:   Yes.

MR DONAGHUE:   That is so, your Honour, but there may be, and this is the point I am coming to, if your Honours then go up the page to 67 you will see that there is an agreed fact that 138 of the staff of Wilson security have been appointed by Nauru, the Secretary of the Department of Justice of Nauru, to be authorised officers, and because of that appointment they could derive, those 138 people do have, as a matter of Nauruan law, the authority of authorised officers under the RPC Act, if I can call it that.

But your Honours may recall, and I will just if I may go back to it briefly, to the RPC Act at page 232 of volume 1, that in order for someone to be as an authorised officer, one needs to have an appointment by the Secretary acting under section 17 of that Act, which your Honours will see at 232 and 233, and not only does the Secretary there have a discretion to:

appoint an authorised officer –

as an authorised officer, a person –

who is employed by a service provider –

but before that discretion can be exercised, the Secretary has to satisfy him or herself about the matters in subsection (2), meaning they have to make a judgment both as to the competence of the person, whether they are a fit and proper person and the service provider staff member has to have consented. 

So, insofar as our friend’s submissions at times implied that any old service provider staff could control whether or not you could come and go from the centre – that they were enforcing detention – that, in our submission, is not correct.  In order to have as a matter of Nauruan law, the power to enforce the prohibition in 18C on coming and going, there needs to have been a judgment by a Nauruan official, applying Nauruan statutory criteria, that the person who is to have that power is given that power as a matter of Nauruan law.

Now, whatever the position might be with respect to a Commonwealth officer, and I will come to that in a moment, in my submission, when one asks the question, can an employee of a corporation be given power in Nauru by Nauru, of that kind, the answer must be yes.  The person is not an officer of the Commonwealth and there is just no issue of Australian constitutional law engaged at all by that question.  It is just another country within your territory doing something that they are entitled to do.

To the extent that detention in Nauru arises as a product of that statutory regime, in our submission, one never gets to first base on a Lim attack on the validity of the regime, because that is an attack that would depend ultimately on the proposition that the judicial power of the Commonwealth is being invested in a way that the Constitution does not permit and Nauru contracting with a private individual or employee to perform a security function is so far away from that, that your Honours need not trouble yourselves with the analysis. There is just no foothold for it.

So that is the question from the perspective of the actual performance of the contractual obligations.  In our submission, your Honours get no different answer if you approach the topic from the question of Commonwealth power to contract in those terms because, in our submission, if one assumes that the power to contract is co‑extensive with the power to do the things that the contractor is asked to do, and Williams (No 2) would suggest that might be the way one analyses that topic, if you asked yourself today, could the Commonwealth enter into the Transfield contract with Transfield in the exact same terms as the existing contract, the answer, in our submission, would clearly be yes, because today there is no deprivation of liberty happening in Nauru at all, so there is no possible Lim argument to read down 198AHA.  So, subject to the head of power question, there would today, in our submission, be no question of power to enter the contract.

If that is right, then, in our submission, the fact that Nauru’s laws wax and wane or change in relation to the detention that is required can have no bearing on the validity of the contract, because to say otherwise would be to say that the Commonwealth executive power to contract fluctuates depending upon decisions taken by Nauru as to the detention arrangement that it will impose under its law and, in our submission, that cannot be so, that Nauru’s decisions are capable of having that effect upon the executive power of the Commonwealth.

To take perhaps what I hope is not a trite example, if the Commonwealth wished to contract with someone to build a new embassy in a different country and to build that embassy it needed to knock down the existing building and then build a new one, the power of the contractor to perform that contractual obligation – you would need various permits and other powers in order to demolish property in another place, but you would never think of asking for a source in Commonwealth law to perform the contract in the foreign country. 

The question of whether the contract could be validly performed would not depend on Commonwealth law conferring the power to perform the contract.  It would just depend upon the contractor securing whatever powers they needed in the foreign country to do what had to be done.  If they failed to do that, they might breach the contract.  There might be private law consequences between the subcontractor and the Commonwealth, but it would not engage the power of the Commonwealth to enter into the contract at all, in our submission.

Now, if that is correct in relation to contractors, I think it useful briefly to address what would be the position if the Commonwealth performed the services that are provided by Transfield directly, because it might be thought, and there are some suggestions in the authorities that the Commonwealth cannot, by contracting out, avoid restrictions that would otherwise operate to limit the power of the Commonwealth Executive.

But, in our submission – and I foreshadowed this just before the adjournment – there would be no difficulty with the Commonwealth performing the same services as are performed by Wilson employees in Nauru and deriving their authority to do so from the Nauru Regional Processing Act, provided that there was Commonwealth legislation that consented to the conferral of a function of that kind.

Now, I accept, indeed, I submit, that that is not this case.  Ultimately your Honours do not need to decide this because all that is happening here is the contractors are the recipients of that power.  But, in the event that it is thought that there is some circumvention of a limit there, it does – in our submission, it is useful briefly to consider two decisions of the Court that would make good the proposition that the Commonwealth Executive is not restricted to performing functions in the exercise of the executive power of the Commonwealth and that it is possible, therefore, for the Commonwealth Executive both to perform functions that obviously fall within Chapter II but also to perform additional functions conferred, usually by States, but additional functions that have been given to Commonwealth officers not forming part of the executive power of the Commonwealth.

GAGELER J:   Does that mean that a Commonwealth officer can exercise the judicial power of a state?

MR DONAGHUE:   As a matter of principle, I think, the answer to that is yes.

GAGELER J:   Subject to Melbourne Corporation.

MR DONAGHUE:   Subject to Melbourne Corporation, yes.  But given that a State official can exercise the judicial power of a State, a Commonwealth official should similarly be able to exercise the judicial power of the State, subject to Melbourne Corporation and subject to the Commonwealth having consented to the official being given that function. 

Now, to attempt to make that proposition good, can I ask your Honours to go to two cases.  The first is ReCram (1987) 163 CLR 117, which was handed up to your Honours and distributed to our friends. This case involved a Commonwealth and State Coal Industry Tribunal and I am going to it to make good the proposition that is recorded as the third holding in the front page of the headnote.

The way that the scheme in question worked –and your Honours will see this at 127 of the report –is that Commonwealth and State legislation had vested both Commonwealth and State functions in both the Coal Tribunal and Local Coal Authority and the court held, at about point 3 on page 127, that both of those bodies derived their existence from both the Commonwealth and State Acts.  They were, in short, joint Commonwealth and State authorities. 

There was then an argument about whether or not that was permissible, whether it was permissible to vest executive power jointly in bodies of that kind and the Court made the point at about point 6 on the page that:

The Tribunal and the Local Coal Authorities only exercise State powers because they are so authorized by the Commonwealth Act, albeit that such authority is a matter of necessary inference rather than express legislative provision.

So their Honours are there acknowledging that the Tribunal could exercise State power - it did not become Commonwealth power –but only with authority.  Their Honours explained the need for that authority at the last four lines of the page and going on over to the next page:

The necessity for authorization under the Commonwealth Act for the Tribunal’s exercise of powers conferred by the State Act was explained by Brennan J in Reg. v. Duncan; Ex parte Australian Iron & Steel Pty. Ltd.:

“If the [Commonwealth] Act had merely constituted or authorized the constitution of a tribunal and had vested federal powers . . . in it without reference to State powers, an attempt by a State Act to vest similar State powers in the same tribunal would fail –

It is the next words I emphasise –

not because of a constitutional incapacity in a Commonwealth tribunal to have and to exercise State power, but because –

in effect of section 109 –

the Commonwealth Act would be construed -

So Justice Brennan there, in Duncan and endorsed in Cram said the problem would not be a difficulty of constitutional capacity with exercising State functions, but you would need to deal with section 109.  That is why there is a need, at least in a federal context, for a Commonwealth Act giving permission because, unless you have the permission, a Commonwealth Act will, by reason of 109, prevent the vesting of the State function.

FRENCH CJ:   What is the head of power?  Is it the intergovernmental agreement?

MR DONAGHUE:   Here?

FRENCH CJ:   Yes.

MR DONAGHUE:   Section 51(xxxix), in my submission, in relation to the giving of permission, and I will make ‑ ‑ ‑

FRENCH CJ:   These arrangements are not uncommon, are they?

MR DONAGHUE:   No.

FRENCH CJ:   I think the energy regulator, bodies like those ‑ ‑ ‑

MR DONAGHUE:   I think they are very common, following on from Cram in particular, accepting that there was no problem intermingling these functions so that a single body can deal in a unified fashion with State and federal law.  So there is no difficulty with the Commonwealth‑created Tribunal exercising State function, subject to a 109 problem but, as their Honours then point out at 131 of the report, the Commonwealth officer in that situation remains an officer of the Commonwealth subject to the supervision of this Court under 75(v) even when they are exercising State functions.

So that the 75(v) control does not depend upon the officer exercising a power derived from Commonwealth law.  The officer is subject to the jurisdiction and control of the Court in all of their functions, whether under State or Commonwealth law.  That passage in the middle of 131 appears to be a rejection of a submission that the then Solicitor‑General for New South Wales had made, recorded at the top of 123, that 75(v) was just about controlling the Commonwealth officer exercising the Commonwealth powers.

The other case that is useful on this point is R v Hughes 202 CLR 535, which is on the list. This is a case under the old Corporations Law co‑operative scheme and what it involved factually was the Commonwealth Director of Public Prosecutions had prosecuted offences that arose under the Corporations Law of Western Australia, and the question for the Court was whether the Commonwealth DPP could perform a prosecutorial function that was as a matter of construction conferred by State law. 

Now, to get to the conclusion as a matter of construction that the power was conferred by State law was not a straightforward exercise, it was a complicated regime, but the conclusion that the prosecutorial function was conferred by State law is found relevantly at paragraphs 27 and 28 on page 552 of the report. 

Your Honours I think do not need to be troubled by the detail of the regime, but what the Court concludes there is that the Commonwealth DPP Act had been rendered applicable as a law of Western Australia by the Western Australian pickup provision effectively, and that that law – the Western Australia law – had conferred the prosecutorial function.  So the case squarely raised the question of whether the Commonwealth Executive in the form of the DPP was capable of exercising a State law prosecutorial function not forming part of the executive power of the Commonwealth.

FRENCH CJ:   So do you have a case that says that the Commonwealth can exercise a power conferred upon it by the law of a foreign country?

MR DONAGHUE:   Yes, that is where I am going, your Honour, that there is no constitutional difficulty with that proposition.

FRENCH CJ:   I asked if you had an authority for the proposition.

MR DONAGHUE:   Well, no, your Honour, I do not have an authority for it, but as a matter of principle, in my submission, always subject to Commonwealth control, so that if – and I return, for example, to my AFP example.  In my submission, it would not be uncommon for Australian peacekeepers, say, the RAMSI mission in the Solomon Islands, or AFP officers seconded to other organisations, to exercise powers not sourced in Commonwealth law.  I imagine - I cannot demonstrate a case -that it happens all the time and there is, in my submission, no problem with it because there needs to be a Commonwealth law giving permission in order for that.

GAGELER J:   On that submission, a member of the AFP could be given power under a State law to adjudicate and punish criminal guilt under a State law. 

MR DONAGHUE:   Under a State law?  In circumstances where the Commonwealth has consented or permitted that to occur, well, that, your Honour is not contrary to Chapter III because the Chapter III limit is a limit on the investing of Commonwealth judicial power.

GAGELER J:   What do you make of the qualification to the first sentence of paragraph 31 of Hughes.

MR DONAGHUE:   Your Honour, because an officer of the Commonwealth includes a Federal Court judge, that qualification picks up, in my submission, the Wilson incompatibility‑type limits, at least, and that is the – we think probably what their Honours were addressing in that situation.  As your Honour will have seen, paragraph 31 is the key paragraph in the judgment, paragraphs 31 and 34. 

In paragraph 31 the joint judgment accepts the proposition, subject to the qualification your Honour Justice Gageler just noted, that Parliament may permit officers of the Commonwealth holding appointments under statute to perform functions and accept appointments in addition are not limited to “conferred by the State” and, in our submission, no reason why it should be so limited.  Where the Commonwealth is engaged in co‑operative trans‑national activities, the same should be, as a matter of principle, true of international bodies. 

It is then subject to two qualifications identified in the following part of the passage both of which are, at least in their terms, directly referable to 109 of the Constitution so that you need consent, you cannot unilaterally invest and the consent must be as wide as the function that is conferred. The 109 explanation would not directly answer the question of whether you need an equivalent permission when a foreign authority seeks to vest functions in the Commonwealth Executive but it is, in my submission, not difficult as a matter of principle to accept that a foreign authority could not co‑opt the Commonwealth Executive to perform particular functions if the Commonwealth had not agreed to accept them.

What happens on the balance of page 553 in Hughes is that the Court draws a distinction between what it calls in paragraph 34, if I could ask your Honours to jump down to 34:

We have stated above our acceptance of a proposition as to permissive provisions respecting the exercise of additional functions –

So permissive provisions are okay, that is paragraph 31.  Hughes turned on the conclusion that as a matter of construction the provisions in question were not permissive provisions because they imposed a duty to prosecute the State offences.  They were being so construed because the State prosecutors had had their functions withdrawn from them, so there would have been no one who had a prosecutorial function unless there was a duty to exercise the invested function. 

The Court holds in paragraphs 32 and 33, in particular, that if you are going to impose a duty there must be a head of power beyond 51(xxxix).  That was why the Court then embarked upon an analysis of whether there was a head of power that would have applied in the circumstances of the prosecution in Hughes. 

But, in our submission, both Cram and Hughes deny the assumption that our friends have made that Commonwealth authority must exhaust the universe of possible powers that can be exercised in discharging the regional processing regime.  There is no reason why, had it happened and it has not happened because of the role of the interposition of the contractors, but there is no reason why Nauru could not have authorised the Commonwealth Executive to take additional functions within Nauru, had the Commonwealth consented to that. 

We submit that at least one of the things that 198AHA does is evidence the necessary consent to the extent that your Honours were to reach any of these issues.  So, in our submission, for those reasons, one cannot accept – should not accept the plaintiff’s invitation to look at this case just through the blinkers of Commonwealth law only, because to do that is to miss the keystone upon which the past detention that occurred in Nauru was erected, being a set of Nauruan laws that authorised officers only, people appointed by the government of Nauru, to implement that detention. 

If your Honours ignore that, then you ignore the reason that detention exists in Nauru, because it is not the MOU or the administrative arrangements or any of those other documents.  It is the laws of Nauru that are causing it and our friends, we submit, agreed as much when they agreed to paragraph 66 of the special case, because paragraph 66 says by reason of all of these laws, if they are not invalid, it was unlawful to leave the RPC without the permission of the operational manager or an authorised officer.  Then in 75a they said again if those laws are not invalid their effect was to require the plaintiff to remain. 

So the agreed facts recognise, correctly, in our submission, that it is those laws, if valid, that bring about the state of affairs that is said by our friends to engage Chapter III, and that is really where the disjunct arises, because you cannot make a Chapter III criticism of a Nauruan law.  It just does not make sense. 

Now, your Honours, can I move from that fairly briefly to make some short submissions about the construction of 198AHA?  I will not say anything about the meaning of “arrangement” in subsection (1).  We adopt the Commonwealth’s submissions on that point.  We do submit that – and I should say if your Honours accept that the MOU is an arrangement for the purposes of that subsection, then there is no need to look at 32B of the Financial Framework provisions, because 198AHA would be engaged and would do all the work that needs to be done.

If your Honours were to find that the MOU is not an arrangement, then we submit in the alternative that the Transfield contract clearly is, and that submission we acknowledge means that we would have to find a source of authority to enter into the Transfield contract somewhere outside of AHA.  It cannot be a bootstraps argument to itself authorise the entry into the arrangement that then triggers the engagement of the provision. 

But if we can find a source of power somewhere else to enter the Transfield contract, then having entered into that contract, all actions then undertaken pursuant to it would be supported by 198AHA(2), including all payments made under the contract expressly supported by ‑ ‑ ‑

FRENCH CJ:   As all actions of the Commonwealth.

MR DONAGHUE:   All actions of the Commonwealth taken, indeed, your Honour, but critically here concerned with our friend’s challenge to the capacity to make payments under the contract and if there were authority elsewhere from this provision to enter into it, then AHA would fill any gap.  So there is also a challenge, our friends challenge the power to approve subcontracts, that gap would be filled also.  Now, the section in its terms, authorises the taking of action in relation to either the arrangement - I am looking at subsection (2)(a):

the arrangement or the regional processing functions of the country -

As a matter of construction, in our submission, that is a very broad conferral of power and turning to the definition of regional processing functions at the end of subsection (5), your Honours will see it includes, amongst other things:

the implementation of any law –

of the country, of the regional processing country.  That, we submit, must include section 18C.  So, to the extent that what contractors are doing under this contractual arrangement is taking action in the implementation of a law, or probably more properly, the analysis would be that to the extent that the Commonwealth contracts with Transfield to take steps in relation to the enforcement of the law, like clause 4.1.2, that is the very kind of thing expressly contemplated by subsection (2).

Subsection (3) has already been the subject of quite some attention and so I will be brief in relation to it.  In our submission, in using the word, “capacity”, the Court was directly responding to the language that, I think all members of the Court used in Williams (No 1) in relation to the question of power to contract.  Certainly, and I will not take your Honours to it, but your Honour Justice Kiefel at paragraph 595, Justice Hayne at paragraph 200, your Honour Chief Justice French at paragraph 62, the joint judgment of Justices Gummow and Bell, paragraphs 150 and 151, all use the language that undoubtedly inspired that provision.

The reference to “authority”, we submit, is used in, relevantly, the same sense, subject perhaps to the exchange your Honour the Chief Justice had with Mr Gleeson, but in Williams (No 2), when your Honours were summarising the holding in Williams (No 1), at paragraph 24 and again you do not need to go to it, but your Honour said, that Williams (No 1) had held:

that there was no authority in the Constitution or in statutes made under it to spend the moneys appropriated –

So, the authority language is again easily tied to the Williams line of cases but what this section, in our submission, mandates is that a distinction be drawn between the questions of capacity and authority on the one hand, and questions of lawfulness on the other and, our short point is that for the plaintiff to treat 198AHA as a provision that satisfies what they call Lim principle one - and one needs to be careful there for the reasons Mr Gleeson developed because in the end, Lim principle one is a common law principle that has not been shown to be part of the law of Nauru in any event - but, even if it were to be a common law requirement applicable in Nauru, that there be a source of statutory authority for detention, subsection (3) denies that 198AHA can play the role of the statutory provision that supplies the authority to detain in a sense that the detention is made lawful because there is that authority to detain, because that is the very thing that subsection (3) says the provision does not do.

It cannot make lawful something that would otherwise have been unlawful.  It just plugs the gap in “capacity” or “authority” in the Williams sense.  So, if that is correct as a matter of construction, in our submission the section cannot be invalid.  It cannot be invalid because it is not purporting to make lawful detention that would otherwise be unlawful.  It is therefore not purporting to do the very thing that Lim restricts.

FRENCH CJ:   Subsection (2), even without the assistance of subsection (3), presumably would not authorise the Commonwealth to pay bribes.

MR DONAGHUE:   Certainly not; indeed, your Honour, so that is part of the work the section is doing.

FRENCH CJ:   In other words, subsection (3) is unnecessary for the purpose of prohibiting or limiting the power under subsection (2) to make payments so that they do not include bribes.

MR DONAGHUE:   Probably unnecessary, but certainly making it clear that this section could not be pleaded in answer to that.

FRENCH CJ:   A bit difficult to imagine how you can have authority to pay a bribe and yet it is unlawful to do so.

MR DONAGHUE:   Well, often, your Honour, in my submission, one would think – ordinarily one would think that having authority to detain someone would mean that if you detained them you could plead that authority in answer to a false imprisonment claim and that therefore there would be no possible claim made against you on that basis.

The difficulty with trying to do that, if the Commonwealth were to detain someone – if the Commonwealth, rather than relying upon its express detention powers in 198AD said, “I don’t need to rely on that.  I can use this section to detain people for the purposes of getting organised before I move them to a regional processing country”, the Commonwealth would, in our submission, have difficulty defending a habeas claim or a false imprisonment claim just by reference to that section, because subsection (3) would be pleaded against them.

So, in our submission though, what the section does clearly contemplate as a matter of construction is that the action that it is authorising the Commonwealth to take – and I am looking here at subsection (5) – is action that can involve an exercise over restraint of liberty and that may occur in a regional processing country; that is, that may occur outside of Australia.

Whatever the distinction between authority and lawfulness might otherwise mean, in a context where the statute is contemplating executive action being taken outside of Australia, in our submission, it is clear that the Commonwealth could not, and would not be expected to be, purporting to authorise – purporting to make lawful detention in the foreign country, because the lawfulness of that detention necessarily depends on the governing law in the place where it occurs.

So, to the extent that Parliament has recognised that, pursuant to this regime, Commonwealth officers might be involved in exercising restraints over liberty but has left the lawfulness of those actions to be determined by statutory authority to be found elsewhere, Parliament has, in our submission, contemplated the very thing I was addressing earlier in the context of Cram and Hughes.

Unless it is thought to be contemplating that the Executive might by this provision unlawfully detain people overseas, it is contemplating that they may be given authority in the regional processing country to exercise restraints of the kind there contemplated.  For that reason, in our submission, whatever else it may do, to the extent that there needs to be permission in Commonwealth law for a foreign law to authorise action of this kind, you find that permission in 198AHA.

That, your Honours, is all I wanted to say about that provision.  If I could very briefly take your Honours to the Financial Framework provisions for this reason, if we need the Transfield contract to be an arrangement that engages 198AHA we submit it can be because entry into that contract was authorised by the Financial Framework provisions.  This is the Financial Framework (Supplementary Powers) Act 1997, section 32B.

It is exactly the same provision that your Honours looked at in Williams (No 2) albeit that the Act has been renamed.  In order for that section to apply, as your Honours may well recall from Williams (No 1), you need to have in terms of (1)(a)(i):

arrangements under which public money is, or may become, payable by the Commonwealth; and –

(b) the arrangement or grant as the case may be, relevantly here (iii), is for the purposes of a program specified in the regulations.  So the section directs attention to whether or not an arrangement or grant is of a kind specified in the regulations.  The relevant regulation is regulation 16(1)(d) of the Financial Framework (Supplementary Powers) Act.

Your Honours may recall in Williams (No 2) the Court held that this section was supported by every head of legislative power which supports the Commonwealth being entitled to have control of money.  So it is a bit like the prosecutorial provision in Williams, it draws support from the whole range of legislative powers in 51.  Here it draws support from the aliens power and from the external affairs power.  The regulation I just mentioned specifies that all of the programs in Part 4 are programs and if your Honours then go to Part 4 of the regulations you will find that on at least page ‑ ‑ ‑

FRENCH CJ:   Part 4 of Schedule 1AA.

MR DONAGHUE:   Part 4 of Schedule 1AA, that is right, your Honour.  On my print it is page 56.  I am asking your Honours to turn to item 417.042.  If your Honours have found that provision, the program there specified is “Regional Processing and Resettlement Arrangements”.  It follows the same form as the specification your Honours looked at in Williams.  The objective is:

To provide funding for costs associated with regional processing and resettlement arrangements, including costs incurred under the memoranda of understanding between Australia and regional processing countries.  This includes funding for accommodation, support, health, management services and claims processing for unauthorised maritime arrivals transferred to regional processing countries and for resettlement, returns and reintegration assistance –

That matches very well with what one finds when one looks at the Transfield contract.  You do not find a contract, as I have already said, providing for detention.  You find a contract providing for that very kind of thing.  Really, the only reason our friends have said this does not apply is that they have said, well, that does not expressly authorise detention.  That is true, but nor does the Transfield contract.

So, in our submission, there is no difficulty in concluding that that provision provided sufficient authority to enter into the Transfield contract and, it having done that, it may well have provided authority for all of the other things that happened but your Honours do not need to concern yourself with that because 198AHA would thereafter be engaged.

Your Honours, as I foreshadowed in opening, we had three points and I said I was going to be very short or I would say nothing on points 2 and 3.  I propose to say nothing on point 3 beyond adopting the Commonwealth’s submissions, so we will not add to paragraphs 11, 12 and 13. 

In relation to the second point, which is the permissibility of considering the validity of Nauruan laws, there are only four points that I seek to make and I will do them briefly.  The first point concerns your Honours’ holding in Moti (2011) 245 CLR 456. In Moti, your Honours did not overrule the Court’s endorsement in the Spycatcher Case in 1988 of the well‑known statement of Chief Justice Fuller in Underhill v Hernandez to the effect that the courts of one country will not sit in judgment on the acts of a government of another, done within its territory.

What your Honours did do was recognise that that was not a universally applicable rule; that there were exceptions to it.  In my submission, critically to the reasoning of the Court was the point your Honour Justice Bell put to my friend, Mr Merkel, yesterday and reflected in paragraph 2 of the judgment, that what was involved in the stay application was a stay application based upon Australian officials having played a particular role in the unlawfulness that was found to have occurred in relation to the Solomon Islands removal.

So, it was a case somewhat similar in respects to Habib, where the allegation was that in order to rule upon whether or not officers of the Commonwealth had acted in an unlawful fashion, the behaviour of foreign officials was implicated.  It was a long way, in our submission, from the situation where the Court might be asked to rule that a statute of a foreign legislature is unconstitutional.

KIEFEL J:   That in turn also involved questions of the abuse of process of an Australian court.

MR DONAGHUE:   Yes, indeed.  Now, when your Honours said, and I should say that the way your Honours formulated the principles in paragraphs, particularly 51 and 52, was directed, as the facts called for, to the conduct of foreign officials.  It was not dealing with the validity of foreign law in the way that this case throws up.  But the Court did say in Moti that Underhill should not be understood as establishing a general and universally applicable rule and also that there was no, in paragraph 52:

single, all‑embracing formula.

Having recognised that in his submissions yesterday, Mr Merkel then, in effect, invited your Honours to adopt a single, all‑embracing formula, being the formula reflected in the observations of Dr Mann that are quoted by the Court in the middle of page 476 but, in my submission, those observations no more provide the single, all‑embracing formula than the Underhill formulation.

Instead, in my submission, what the Court appropriately recognised in Moti was that there is not a “one size fits all” rule in this area and that is, in my submission, at least in part explained by the fact that the Act of State banner is a banner that actually covers a number of quite different considerations. 

So, sometimes it is talking about non‑justiciability, sometimes it is talking about sovereign equality of states or international comity issues.  Sometimes it is raising separation of powers type questions, and so the factual context in which the issue is thrown up is critical to any proper evaluation of the way that the doctrine might apply.

Here, in our submission, what your Honours are being asked to do is at one extreme of the spectrum in that your Honours are being asked to rule that the act of a democratically‑elected foreign legislature is unlawful under the supreme law of that country.  Dr Mann in the same article that your Honours referred to in paragraph 52 – and we have given that article to your Honours in the materials, and I will just give your Honours some pinpoint references – but at the bottom of page 147 of that article, Dr Mann, who was not a fan of the Act of State doctrine, nevertheless accepts that:

a court is likely to be precluded from inquiring into the constitutional validity of legislation enacted by a foreign sovereign.

So in that article he accepted that, whatever the limits might be, what the plaintiff asks your Honours to do here is outside them.  Indeed, even on his preferred approach, which your Honours will see at the bottom of page 153, Dr Mann said that a court would hesitate long before deciding in favour of constitutional invalidity.  So we submit that one cannot escape the significance of the principle just by a formulaic indication of the principle that was applied to deal with the particular facts that were thrown up in Moti.

The second point that I seek to make responds to a question that your Honour the Chief Justice asked Mr Kennett about the human rights exception to the doctrine, if I can very loosely call it that for the moment.  Our submission on that topic is that it is a large and complex topic that really has not been fully argued before your Honours.  The nature of that exception, if it exists - it is sometimes described as a public policy exception in some of the cases where the public policy of the forum just refuses to acknowledge the law of the foreign state.  It is sometimes described as an exception for what are called grave infringements of fundamental human rights.

The Commonwealth in the Habib case in the Full Federal Court denied that there was such an exception and, in our submission, your Honours do not need to decide the point in the context of this case.  You do not need to decide it because, assuming that there is a public policy exception, in our submission, it cannot be said that it would be contrary to the public policy of the foreign state – Australia – to recognise the operation of the Nauruan law, because the Nauruan law is much the same as our law in that it provides for the detention of asylum seekers during the processing of their claims, so there is nothing repellent about that law from a public policy point of view.

Insofar as there may be a grave infringement of fundamental rights exception, could your Honours go to the Belhaj Case [2015] 2 WLR 1105 that contains the passage that the Chief Justice put to Mr Kennett? I think your Honour the Chief Justice put to Mr Kennett paragraph 81, where the court says:

The act of state doctrine as applied by the courts in this jurisdiction is not an absolutely rule.  It is established that the doctrine may be disapplied on grounds of public policy where there is a violation of international law or a grave infringement of fundamental human rights.

In our submission, what their Honours meant there is explained by the next paragraph, paragraph 82, which includes a discussion of the famous decision in Oppenheimer, which was about the Nazi laws depriving Jewish citizenship and appropriating Jewish property, and at the end of that passage your Honours can see Lord Cross’s observation:

To my mind a law of this sort constitutes so grave an infringement of human rights that the courts of this country ought to refuse to recognise it as a law at all.

This statement, although obiter, came to be accepted as establishing an exception, in the case of grave violations of human rights –

In our submission, even assuming against us the exception exists, it is dealing with the case where the law in question is so bad that the underlying principles that support the Act of State doctrine about international comity and respect for sovereign equality cannot justify recognition of the law.  Or perhaps to put it another way ‑ ‑ ‑

FRENCH CJ:   Recognition is a different thing from a determination about validity, of course.

MR DONAGHUE:   Yes, your Honour.  In effect, in my submission, what those cases are saying is that in some laws, like the Iraqi invasion of Kuwait or the Oppenheimer Case it will not prejudice international comity or respect for sovereign equality for the courts of the foreign State to say we are obviously not going to give effect to this doctrine.  We are not in that territory in this case and, for that reason, your Honours do not need to concern yourselves with the subtleties of the exceptions in a case where they have not been fully examined.

The next point, very briefly, is that in this case to accept the plaintiff’s invitation that the rule on validity would carry particularly evident risks of prejudice to international relations, because when the Commonwealth and Nauru came to negotiate the international agreement pursuant to which this Court can exercise what are called in the Act the Nauru (High Court Appeals) Act but which have been held in this Court to be an exercise of original jurisdiction - however one labels that jurisdiction - when the two States came to negotiate about the role that this Court might play in respect of the Nauruan judicial system, they expressly excluded questions arising under the Constitution of Nauru. 

You see that in section 5 of the Act and in Article 2(a) of the Treaty, which is scheduled to the Act.  So to do what you are invited to do would be to do something that we know from the Treaty that was agreed between Australia and Nauru is something that Nauru expressly sought to withhold.

FRENCH CJ:   That was in relation to the appeals structure as between Nauru and here.  That is in a different box, is it not, from the question of ‑ ‑ ‑

MR DONAGHUE:   Perhaps, your Honour, although one interesting consequence of the fact that the Court has held that the jurisdiction is original rather than appellate is that there is no direct legal relationship between the appeal that would normally exist between an appeal in this –I will start that again –when an appeal is brought from another Australian court to this Court there is obviously a direct relationship whereby this Court can set aside the orders of the court below.  That is not what is happening in the Nauruan appellate‑ ‑ ‑ 

FRENCH CJ:   There is mirror legislation in Nauru.

MR DONAGHUE: Yes, there is, which, again, reflects what the Constitution says, which is that the Supreme Court of Nauru is supposed to be the ultimate authority on these questions. We were going to, like Mr Kennett, invite your Honours to adopt the approach in Kirkpatrick, so I adopt what Mr Kennett said to your Honours.

But the final point is that there was some discussion, I think, particularly between your Honour Justice Nettle and Mr Merkel of a presumption of validity and why should one not just assume or presume the validity of the law in the absence of a finding to the contrary?  In our submission, Mr Merkel originally accepted that and then he came back after lunch and read a passage to your Honours from South Australia v the Commonwealth, which was actually about voidness ab initio of invalid legislation rather than about presumptions of validity or otherwise.

The approach that an Australian court would take is well captured by Chief Justice Mason’s observations in Castlemaine Tooheys, which we have referenced in our submission.  On an interlocutory hearing, the Court presumed the validity of the challenged legislation until there is a finding otherwise.  If that is the approach that an Australian court would take in relation to Australian legislation, in our submission, it is equally apt as an approach to be taken in relation to foreign legislation.

There is also cited in footnote 96 of our submission a reference to Justice Murphy’s judgment in the Tasmanian Dams Case where his Honour undertakes a comparative review of the presumption of validity of legislation and effectively concludes that where you have a written Constitution, international practice suggests you also have a presumption of validity.

So, in our submission, for that additional reason, if your Honours reach the topic, the appropriate approach would be not to enter into the question of the validity of the Nauruan law but absent a decision of the Nauruan Supreme Court to the contrary to decide the case on the basis that the Nauruan law is valid.  If the Court pleases, those are our submissions.

FRENCH CJ:   Thank you, Mr Donaghue.  Yes, Solicitor for Western Australia.

MR DONALDSON:   If your Honours please.  Your Honours, Western Australia is intervening in support of the Commonwealth in relation to the Chapter III point and I will not repeat any of the submissions ‑ ‑ ‑

FRENCH CJ:   Can I just inquire as to why?

MR DONALDSON:   Because, your Honour, one often hears regrettably the words Lim and Kable in the same sentence.  The only additional submission we wish to make in relation to Lim, your Honours, is in relation to Plaintiff S4 which was not an authority that my learned friend, Mr Gleeson, spent very much time on.  I am at point 3 of our note, your Honours, and Plaintiff S4 is (2014) 253 CLR 219 and paragraph 26 is at page 231.

The plaintiffs in their written submissions, your Honour, and I think my learned friend, Mr Merkel, in his oral submissions focused some attention on paragraph 26 and your Honours will see it is really the last sentence of paragraph 26 that gets focused upon.  Paragraphs 25 and 26 deal with an understanding of Lim and that comes down to – and in 26 there is a reference to the centrality of the purpose of detention.  Then, the Court finally said:

Lawfully, that purpose can only be one of three purposes:  the purpose of removal from Australia; the purpose of receiving, investigating and determining an application for a visa permitting the alien to enter and remain in Australia; or, in a case such as the present –

and your Honours see that.  What is put by the plaintiff is they are the only three purposes fixed in stone and unless the circumstance of this detention or the purpose of this detention can be put into one of those three categories, it is unlawful. 

In response to that, your Honours, we say a number of things:  one, and I will not take your Honours to it, the Commonwealth in their submissions at footnote 86 refer to a number of authorities.  They are virtually all single judges or single judgments, your Honour, to the effect that the categories or the limbs derived from Lim at page 32 are not closed – and your Honours will no doubt look at those authorities in due course.  Secondly, your Honours, what is said at 26 needs to be understood in the context of this case and what is said in 25. 

This case concerned the factual circumstance of the third scenario of the three purposes that I have taken your Honours to.  So what their Honours say in that case is to be understood in the context of, well, it was the addition of this third purpose, because that is what it was in this case, to the purposes previously understood as Lim with which the case was dealing. 

Third, your Honour, we would say that if one looks at Lim, and could I invite your Honours quickly to turn to Lim (1992) 176 CLR 1 and the relevant passage, your Honours, is at page 32, which is really the part of the judgment – Mr Gleeson did not take your Honours in any great detail to this particular page. This is the page that deals with executive detentions in relation to immigration matters. Your Honours will see the first full paragraph and the second sentence:

authority to detain an alien in custody, when conferred upon the Executive in the context and for the purposes of an executive power of deportation or expulsion –

is an incident of executive power.  So that is the first category that is repeated in S4.  Then:

By analogy –

So there is the second category from S4.  So their Honours here simply seek a second category as arising by analogy from the first of the categories and,

if you like, the lodestone or the common feature or the basis of the analogical reasoning is really the final sentences of that paragraph:

The reason why that is so is that . . . authority to detain in custody is neither punitive in nature nor part of the judicial power –

So this notion of punitive seems to form – or penal – forms the basis for analogising particular circumstances.  We would not put it as high as the Commonwealth, your Honour, in this respect, that one simply determines whether a detention is penal or not.  If it is not penal then that is the end of the inquiry.  S4 says one must look at purpose.  If it is necessary to determine whether the purpose of detention here is analogous to those that are recognised in S4, then we would say, your Honours, they are analogous for two reasons. 

One, your Honours, is the proposition that we advance at 4.  That is, it would be difficult, with respect, to logically contend that the detention here is not analogous to that which has been lawfully recognised when what is done in Nauru would be lawful and not an exercise of judicial power were the precise same thing done directly by the Commonwealth in Australia.  The other basis we contend for the purpose as expressed by the Commonwealth of this detention being analogous is, your Honours, this.  I will not take your Honours to it because my friend, Mr Merkel, is eager to have as much time as he can. 

Your Honours will see our reference in the third bullet point to the case of I think it is Robtelmes v Brenan (1906) 4 CLR 395. I have referred your Honours to passages from each of the judgments there and what your Honours will see is that each of the Chief Justice and Justices Barton and O’Connor deal with the notion of excluding a person from coming to this country as the different side of the same coin of expelling a person who is here, that is, expelling a person who has no right to be here, or permission to be here, is the same as excluding a person who has no entitlement to come here from getting here. If that proposition is accepted, then the circumstances of detention are analogous in the sense that we have contended for. If your Honours please.

FRENCH CJ:   Thank you, Mr Solicitor.  Yes, Mr Merkel.

MR MERKEL:   Your Honours, I will be dealing with issues of standing and the Nauruan Constitution and my learned friend, Mr Lenehan, will deal with the other issues.  Can I go straight to standing?  Your Honours, we have made it clear from the outset that our application deals with two separate causes of action:  one discretely framed in respect of the Transfield agreement; and the other discretely framed in respect of the detention activities of the Commonwealth.

Can I go to the application which sets out how those two streams do not meet and how they are dealt with separately in the questions?  Could I go to page 866?  Can I deal with just the Transfield agreement cause of action, and the point of it is that the Transfield agreement does not involve any facts relating to the current detention regime.  It relates to the regime between 24 March 2014 and 2 August, which is the period the Transfield contract was entered into and the period in which the plaintiff was held in detention under the Transfield contract in Nauru.

Can I go straight to paragraph 1?  The relief in subparagraphs (b) through to (e) relates solely to the Transfield contract and it is premised upon – and the date of 24 March is the commencing date.  It is premised upon there being no statutory authorisation for that contract on that day, and it would follow, there being no authorisation for the contract, performance of it from that day on did not satisfy the requirement of the Lim principle to have detention authorised by statute if we are right in our claim.

Then, the alternatives in (c) and then giving effect to the Transfield contract in (d) that they are both the true alternatives, but payments are directly raised and my learned friend, Mr Donaghue, is not right when he said payments are not in issue and I will take your Honours to where that comes up in the questions.  So that is the prohibition that is sought.

In paragraph 2, the declaratory relief that is sought in association with what I have just pointed out is in 2(b) and 2(c).  Can I just indicate, your Honours, when Justice Nettle dealt with this matter on the question of allowing us to raise the amendments, at that stage, if I recall correctly, 198AHA had not been enacted or if it had it was not part of his Honour’s reasoning.  I do not think it was argued before his Honour. 

But the word “valid law” came in under paragraph 2 as an amendment made in August as a result of section 198AHA being passed and then we directly raise declaratory relief in paragraph 2(b) and 2(c) as an incident, not an independent cause of action, of the basis for seeking prohibition in paragraph 1(b), (c), (d) and (e).  Now, that cause of action is also related to the injunctive relief set out in paragraph 3 and that comes up under paragraph 3(a) and 3(c) in particular, is injunctive relief based upon relevantly, for present purposes, 2(b) and (c).  So there is an entirely discrete set of relief which is independently framed in respect of conduct restricted to the period we were in detention.

That would also – if there was no change, that would found the relief all the way up to the present time.  I should say the Transfield contract is due to expire on 31 October, but judging from what my learned friend the Solicitor‑General said, it is expected to be renewed in the same terms but that certainly will not change the nature of the relief we seek based upon the contract not having any statutory authorising when it was entered into.

GAGELER J:   Mr Merkel, how would your client be any better off as a result of prohibiting payments into the future?

MR MERKEL:   Your Honour, she would not be, but she falls within the well‑established principle of this Court, being able to seek prohibition as a stranger and therefore she does not have to have that special interest, subject to discretionary factors and what I have in mind, your Honour, is the decision of this Court in Batemans Bay (1998) 194 CLR 263, but that was considered by six judges of the Court in Truth About Motorways (2000) 200 CLR 591 and the passages from the judgments at 599 to 600, 611, 627 to 8, 652 to 3 and 670.

So her standing in respect of the past is it was her detention and therefore she does not have to come as a stranger because she was detained under the contract during that period but, more relevantly, insofar as prohibition is sought in the future in respect of the contract, because it is beyond the law, or unlawful if that is what she succeeds in establishing, then she has standing.  There may be a discretionary ground for refusing her relief, but no such discretionary ground is being put forward – discretionary on the basis of some of her conduct disentitling her to relief.

Now, can I give your Honours the references, but I do not want to take your Honours to it given the time of day and the time we need for reply, but in our amended statement of claim at page 873 can I just take your Honours – can I just give your Honours the references to paragraphs 20, 27 onwards to 36, 37A, 37B and 38 and to the Commonwealth’s defence at paragraphs 32b, 36 and 37A which show that the claim in respect of the Transfield contract, the defence to it and our reply to it at page 691 are framed entirely independently of any future conduct and it is not said she is disentitled to the relief she seeks by reason of any conduct on her part, the point being that that is an entirely stand‑alone cause of action. 

We would ask your Honours to note the Transfield agreement, in fact, applied to the detention centres in Nauru and Papua New Guinea so the same principles apply to both detention centres.  This you will see at page 608 and 610 and I do not want to take you there to it but the sites of both Manus and Nauru and the Transfield contract governs both sites. 

That is probably why my learned friend the Solicitor‑General said that if this contract is prohibited that it will have far‑reaching consequences but that is the relief that the plaintiff is entitled to, if she makes good her cause of action.  The point about it - what is put against us is just past conduct not having any relevance, we say that it has quite significant relevance.  Can I take your Honours next to question (1) at page 26?  When the standing issue was raised, the contract comes up in paragraph 1(vii) and 1(viii):

exercise rights and discharge obligations –

includes funding, and in the question insofar as those acts or that conduct facilitated and organised, et cetera, “facilitated and organised” includes funding, so that what we say is that her standing and entitlement to relief depends upon the validity of the Transfield contract when entered into on 24 March.  Her claim is based upon its invalidity as from that date, not on whether she will be detained in the future. 

If successful, in the normal course she is entitled to the prohibition she seeks.  In any event, she is entitled to seek prohibition as a stranger, as I have indicated.  We would say that the fact that it is past is inherent in the cause of action as pleaded and as the Commonwealth defence has dealt with it.

Can I now go to the relevance of her past detention?  The second set of claims, which – could I go back to 866 of the second volume.  This deals with her claims in respect of past conduct.  That comes up under the prohibition in paragraph (1)(a).  If the current regime – and I have taken your Honours to the fact the current regime legislatively is still in place, but there is an approval which can be withdrawn without giving reasons at any time, but if that regime is in place, then she will fail on her application for prohibition on the merits in paragraph (1)(a), not because she is not entitled to make it, but if there is a reversion to that regime, the situation will change.

So it is not a matter of whether there is a matter or whether she has standing; it is a matter of whether she succeeds on the merits in paragraph 1(a).  The declaration in respect of past conduct falls in paragraph 2, 2(a), (d), (e) and (f) and that is supported by the injunction sought in 3(b) and 3(c).

Now, what we say in respect of the circumstances of the present case is it is quite similar to other cases in this Court where the regime that brought a person to court had, in the running, been revoked or appealed and a point was raised as to whether there was utility in the Court deciding the matter.

Can I take your Honours to Wragg v State of New South Wales 88 CLR 353, which should be amongst our supplementary authorities. Sir Garfield Barwick was counsel and he put submissions at 369. It encapsulates the issue in the first sentence:

The plaintiffs’ cause of action, from a technical point of view, was not destroyed consequent upon the revocation of the price-fixing orders and the rescission of the declaration relating to potatoes.  There remained a threat to re‑enact the price‑fixing orders, or, in other words, to bring potatoes under control at any moment.

Then the Chief Justice, at the top of page 371, said:

We think you may proceed.  We do not propose to say anything to tie our hands in the matter but probably all of us are impressed with the view that really what is at issue is whether what has been done can be repeated.

With respect, that is precisely what was said or raised by me and your Honour the Chief Justice at page 48, lines 2055 to 2060, in the transcript yesterday when your Honour said:

But a legal answer to the past - an answer to the legal questions raised by past attention in your favour answers the questions for the future insofar as the future replicated the past.

That is precisely what happened in Wragg and Justice Taylor, with whom the other judges agreed, at page 392 said:

At the time of the commencement of the suit potatoes were declared goods for the purposes of the Act, and Prices Regulation Order . . . and which related to the maximum prices . . . But when this appeal came on to be heard the order was no longer in force and potatoes were no longer declared goods.  This circumstance, however, does not disentitle the plaintiffs to have considered the questions which have been stated in the case.

So we say that is really the situation that we are in present.  Can I just give your Honours the reference?  The same actually happened in Kable v Director of Public Prosecutions 189 CLR 51 at 125 point 9 where Justice Gummow noted that no current order was in effect concerning Kable but:

the appellant remains at risk of further application being made . . . under the Act.  For that reason, at least, the present appeal is not moot.

So we say we are in exactly the same situation as was heard in those two cases.  We say that the wrongful or unlawful detention of which we complain, if we establish that case is made out, then it can be repeated, using the words of the Chief Justice in Wragg.

KIEFEL J:   But what are you at risk of?  What is the plaintiff at risk of - removal or detention – removal and detention?

MR MERKEL:    Removal to detention, which is what she complains about in her application, and that risk remains and the directions and designations can change; other countries can be brought into the scheme at the moment.  Her only protection is an approval which has been granted but can be revoked.  We say that is a more fragile protection than occurred in respect of Wragg and with Kable.  So we say that they are the circumstances that she finds herself in. 

Can I go briefly to the decision of Justice Nettle on 26 June?  I think they have been handed up as part of our papers, at the transcript of 26 June, his Honour’s decision, as from pages 24 through to 34.  I only wanted to make two observations:  it was pre‑section 198AHA but we, with respect, adopt, as we have said in our written submissions, his Honour’s reasoning.

We just wanted the Court to note that Gardner, which has been relied upon by the Commonwealth - in that case the legislation had been repealed before the case began and really the case had no foreseeable consequence other than being used for advocacy purposes.  We just wanted also, finally, to note that the case referred to at 1160 at page 28 was Re Aala 204 CLR 82 and the passage from Justice Gaudron and Justice Gummow is at paragraph 55, the Court would effectively be slow to refuse declaratory relief under section 75(v). So we say that for those reasons, we have standing.

I just wanted to make it clear I have said that our cause of action in respect of standing on the Transfield contract stands independently of paragraph 15 of our outline.  The way we have approached our challenge to section 198AHA(5) – (2) and (5)(a) – is to say that to the extent that those subsections authorise the Commonwealth to enter into the Transfield contracts and to make payments in respect of the involuntary detention of the plaintiff and other transferees at the Nauru RPC between 24 March and 2 August 2014 are, for the reasons we have put at paragraphs 9 and 10 of the outline, the sections are invalid and do not constitute a valid authorisation.

That, your Honours will see in our pleading and in our submissions as a stand‑alone submission that does not depend in any way on the current state of detention.  Of course, for this matter, if judgment is handed down at some time in the future and there is a changed circumstance, either by the reinstitution of detention or by changed legislation, no doubt we will all have to look at the situation then.  But at the moment, as we have put in our submissions, the legislative foundation for the entirety of her detention remains in place.

Could I now go to the issue of Nauruan law and the Constitution?  Our learned friends keep saying that a question before the Court is whether the law is invalid.  Question (3)(a) took your Honours to this briefly in‑chief but (3)(a) asks at page 27 whether there was a deprivation of liberty other than in accordance with the law of a particular characterisation.  If the answer to that is yes then we are on all fours with Moti without declaring the law invalid but a consequence in (3)(b) is the law would be invalid because the plaintiff was wrongfully deprived of her liberty contrary to Article 5(1).

We would, with respect, say deprivation of liberty contrary to an Article such as 5(1) does raise a fundamental human right but, in any event, we say we satisfied the test in Moti because our learned friend’s submissions have not confronted the conundrum of their reliance on the law of Nauru but not the entirety of the law of Nauru.  We say a claim of unlawful conduct by Commonwealth officers under 75(v) resulting in an entitlement if that is what we are entitled to for prohibition and injunctions is an a fortiori case where the reluctance of the Court to enter into this area should not apply.

Spycatcher has had nothing to do with Chapter III.  We would say that the conduct of the abuse of power in Moti, albeit in respect of the criminal justice system, would stand in this context on the same principle as an exercise of power resulting in deprivation of liberty of an individual which is not supported by and is unlawful under Chapter III.

Now, in respect of Justice von Doussa’s decision, can I just say that our learned friends relied upon the use of the word “temporary” in his Honour’s judgment.  At the time of Justice von Doussa’s decision, the MOU did actually not only not require detention, but did two things:  it actually provided for people to be at liberty, not in detention, but also more relevantly, it required everyone, whether refugees or not, to be removed.  Under the legal regime at that time, everyone – no matter what the outcome of processing – was required to be removed. 

What our learned friends cannot justify and do not confront is that the current regime, which operated in 2014 during the relevant period and is still in place is that persons found not to be refugees are to be removed and persons found to be refugees are at that point taken out of detention and get temporary settlement visas for an indefinite period.  As I pointed out, they

constitute something approximating 80 per cent of the people who are undertaking regional processing.

So, we say collapsing those two groups hides rather than reveals the question to be asked.  The moment the question is asked whether all the persons with visas are there under a law for their lawful removal, the answer has to be no in respect of persons found to be refugees.  So, we say that this is involving just no more than a characterisation of the law, and there is no reason why this Court cannot do it. 

I just inform your Honours by way of conclusion that Nauru was given notice of this proceeding pursuant to his Honour Justice Nettle’s order.  It was entitled to come along and be heard.  It has elected not to, but that is its entitlement.  We say that the circumstances of this case – particularly where it is a preliminary step, both in our case and in the Commonwealth and Transfield case – should have this Court decide the issue if it arises.

Finally, on the presumption of validity, we say Castlemaine Tooheys was an interlocutory application and there is no principle of the Court of a presumption of validity at a final hearing in respect of Australian law.  We say the doctrine was as we put it, the law is either valid or not and there is no presumption either way.  On interlocutory application, the situation may be different because at that stage there might be a prima facie position in respect of a prima facie case, but we say that is not what the situation is.  If your Honours please, I will hand over to Mr Lenehan.

FRENCH CJ:   Yes, Mr Lenehan.

MR LENEHAN:   Thank you, your Honours.  Your Honours, I am going to make four points.  I am going to address your Honours on paragraph 15 which seems to be the principal battleground of our oral outline.  I am going to say something about the Lim principles.  I am going to briefly say something about Cram and Mr Donaghue’s point and bearing in mind that I am pushing into a considerable headwind I am going to say something very short about head of power.

In paragraph 15 of our outline, we set out, as your Honours have seen, really the factual basis for our case.  It is put against us by Mr Gleeson that your Honours could only be satisfied that the Commonwealth provided funding in respect of the detention and nothing more.  In response to a question from your Honour the Chief Justice, he may have gone a little bit further and accepted that the Commonwealth provided material support for the maintenance of the detention regime.  What I want to do is really identify the factual material just by reference to the various heads that we put forward in paragraph 15 and say how it all fits together.  Before I do so, can I respond at something of a higher level to the criticisms that are directed against us?

One of the principal points seems to be that there is no mention of detention in either the memorandum of understanding or in the administrative arrangements and Mr Merkel has accepted that that is so.  Mr Gleeson nevertheless accepts in response to a question from your Honour the Chief Justice that the regime set up under those instruments could accommodate detention. 

We say it goes somewhat further than that, and to make that good I need to take your Honours quickly to two points in the special case.  The first is page 153, and your Honours will see that this is the Immigration Regulations 2000, as in force from September 2012.  If your Honours keep in mind that the date of the MOU is almost 12 months later on 3 August 2013.  If your Honours then go forward in that instrument to pages 164 and 165, you will see a version of regulation 9A, which subsequently becomes regulation 9, dealing with the Australian regional processing visa.  Looking at the provisions relating to that visa, you will see in subsection (3)(a):

(a)the holder must reside in premises notified to the holder by a service provider –

Then, over the page on 165 in paragraph (c)(i), an earlier form of the so‑called open centre arrangements:

(c)after a health and security clearance is granted to the holder –

they must reside –

(i)during the hours between 7 pm each night and 7 am the following morning . . . at those premises or common areas –

A further version of the regulation was in force at the time of entry into the administrative arrangements.  Your Honours find that instrument at page 389 and you will see that that is notified by Gazette dated 30 January 2014 and if your Honours then go forward to page 400 in the special case book, you will see what has now become regulation 9 – I am sorry, your Honour, I am just picking it up, (6)(a):

must reside in premises specified in the visa ‑

Then making good the point that I want to make that the conditions are in fact more restrictive by this time, you see that the earlier version of the open centre arrangements was at this time gone.  What we say in relation to that then is that your Honours need to, in considering the MOU and the administrative arrangements, have regard to the broader context. 

That broader context indicates that detention was certainly in the contemplation of the parties. We would say it forms part of the factual matrix in which the MOU and the administrative arrangement were entered into and then completing that picture, the Commonwealth having, we say, caused that detention, effectively delivers up the plaintiff and others into it, to use a ‑ ‑ ‑

KIEFEL J:   How did the Commonwealth cause the detention?

MR LENEHAN:   I am sorry, your Honour.

KIEFEL J:   How did the Commonwealth cause the detention?

MR LENEHAN:   Your Honour, can I come back to that because I am going to go through the elements that we say point to that.

We rely on that also to address Mr Donaghue’s waxing and waning point.  The fact is that as a matter of practical effect these arrangements and entry into the Transfield contract, having regard to that broader context, necessarily led to detention, we say, combined with delivery up of the plaintiff to Nauru.  We also say no difficulty arises then in terms of constitutional limitations potentially changing depending upon the circumstances or the time, and I only have to refer to the defence power really to make that point good.

There was also some emphasis placed by Mr Gleeson on the fact that the visa provisions, which I have taken your Honours to just now, might be said to – and we accept this, they contain a discretion on Nauruan officials and the point Mr Gleeson seeks to make from that is that he says that it confers an opportunity to obtain a visa.  If I could just as regards that point direct your Honours to page 70 of the special case book, and specifically there clause 7 under the heading “Operation of this MOU”.  It is said there that:

The Commonwealth of Australia may Transfer and the Republic of Nauru will accept Transferees from Australia under this MOU.

More than that ‑ ‑ ‑

FRENCH CJ:   Could you lift your voice a little bit, Mr Lenehan?

MR LENEHAN:   I am sorry?

FRENCH CJ:   Just lift your voice a little please.

MR LENEHAN:   I am sorry, your Honour.  More than that, if your Honours look to complete that picture, paragraph 26 of the special case itself and paragraphs under 26a and b, you will see that the parties have agreed that:

2242 Transferees have been taken to Nauru pursuant to Division 8 –

and looking to the bottom of b, there had been an application made in respect of each of those people, “each of which has been granted”.  Now, we do not say, of course, that Australia can trespass upon Nauru’s sovereign authority.  But looking at the practical reality; what has been agreed, what has happened, is that all of these people have been taken to Nauru into detention.  What I will do now is, referring to each of the descriptions in paragraph 15 of our outline, set out for your Honours how we say those things fit together and how they are to be found in the evidence.

Now, the first one of course is “funding”.  I do not think it is suggested by my friends that there is any real issue about that.  I think Mr Gleeson, in fact, accepted that there was quite a bit of money flowing around for these purposes.  Just to specifically identify what that money was doing, I think it is uncontroversial that the Commonwealth has paid all fees associated with the visas, has paid for all the infrastructure used to detain the plaintiff and others, including the detention centre and the fences around it, pays for all services provided at the detention centre, and pays for all transport into and out of detention.  In contrast, Nauru does not pay any money whatsoever to keep the plaintiff in detention.  But as I say, we say it goes beyond funding.  Then, to come to your Honour Justice Kiefel’s question:  how do we say it causes and procures?

Our essential point is to say that but for the Commonwealth’s actions the Nauru RPC would not have come into existence.  It is necessary to note in that regard, your Honour, that at special case book page 50 which is the memorandum of understanding ‑ ‑ ‑

KIEFEL J:   That to which you are referring establishes an intention, is that sufficient?

MR LENEHAN:   I say it goes further and I will come to why.  So you see there in the last dot point that Australia has requested that the Republic of Nauru hosts a regional processing centre and that request was, obviously, granted.  The next limb in the cause pathway, we say, is that the Minister directed the persons in the plaintiff’s class were to be taken to Nauru and Mr Merkel took your Honours to that document yesterday.  Then we say the Commonwealth in each case applied for a visa for the plaintiff and for other transferees which required that she reside in the Nauru regional processing centre and did not leave without permission.  Then ‑ ‑ ‑

KEANE J:   So do you say that to submit to the condition of a grant of a visa is to request the condition?

MR LENEHAN:   We say that because of course that your Honour will recall that in the special case it is recorded that these visas have nothing to do with the consent of the plaintiff.  So it is done through the Commonwealth, the Commonwealth applies for it.  The plaintiff then bears the burden of the conditions in the visa.  That is what we say. 

KEANE J:   So you say that to submit to a condition of the grant is actually to request the condition?

MR LENEHAN:  Yes.

KEANE J:   That is not how one would ordinarily use language.

MR LENEHAN:   No, your Honour, but these are somewhat unusual circumstances.  We say that it is relevant to cause also to have regard to the fact that not only can the Commonwealth cause the plaintiff’s detention to commence, it is relevant to note that – and this is in fact indicated by the plaintiff’s current circumstances, that the Commonwealth can take a transferee out of Nauru either to Australia or to Papua New Guinea and we call in aid, having regard to that matter - and just to give your Honours the reference where this appears in our submissions, it is in paragraph 66 of our submissions in‑chief.

We rely on the UK decision in Rahmatullah v Secretary of State for Defence [2013] 1 AC 614, and the court there made clear that habeas corpus will issue in both cases of actual physical control and also where there are reasonable grounds to believe that a person will be able to obtain that control. We say that is an analogy which is useful in understanding what it is that the Commonwealth is in a position to do here.

So it is certainly true, we accept, Nauruan law provides the architecture for the detention.  However, we say that the Commonwealth requested at least a part of that architecture – that is the RPC – and can move transferees into and out of that architecture, which we say therefore leads to causing or procuring that detention.

We draw an analogy – and this then overlaps into what we describe as “effective control”, moving to the next description that we use in paragraph 15.  In relation to that, we accept, as I say, that the legal architecture for detention – and this is a point that both Mr Gleeson and Mr Donaghue emphasise against us – is supplied by the Nauru legislation.  We say within that legal architecture, in which discretions are broad, the Commonwealth operates the centre through its contractors.  That is why Mr Merkel put to your Honours yesterday that is, in effect, a Commonwealth detention.

The matters that we rely upon in that regard, Mr Merkel took you to yesterday – I do not propose to really go back – but just to identify them at a high level, we say employees of the Commonwealth contractors had effective control over the plaintiff’s movements within and outside the centre.  They could grant and refuse permission – within the boundaries of Nauruan law, we accept – to leave the RPC; to issue instructions whilst outside the RPC; and to issue orders and directions for good order within the RPC.  You find those in the provisions of the Immigration Regulations and the centre rules that Mr Merkel took you to.

It controls 138 Wilson Security officers, and we understood that there may have been yesterday some issue between us and Mr Gleeson as to some of the powers that they exercise – again, under Nauruan law – particularly in relation to searching.  But we do note, and I think this is now common ground between us, that there are no individual approvals required for actions such as searches.  There is, as Mr Gleeson directed your Honours to this morning, requirement for notification to the secretary or operational manager, but we say it is clear that they are exercising significant powers over people’s rights and liberties.

Of course, the Commonwealth possesses and exercises rights under the Transfield contract.  That includes potentially step‑in rights.  Perhaps at a more trivial level, but nevertheless we would say important in the overall direction and guidance of what is going on in Nauru, regularly meets with service providers running the RPC. 

It has representatives including from the department and the Australian Border Force in all of the committees having oversight of the macro and the micro management of the centre and, as I say, if the Commonwealth elected to do so and your Honour the Chief Justice noted that this is without breach of the contract, could exercise the step‑in rights under that contract.

Putting all that together, we say it is not right to say – and this is the proposition that Mr Gleeson started with yesterday – that the consequence of the plaintiff’s claim is that there is no power to provide some form of assistance to any sort of international co‑operation effort which involves some sort of detention.  Our claim is based upon what we describe as a thorough going Commonwealth involvement in the detention, such that has become a Commonwealth detention.  That is all I wanted to say about paragraph 15 and the factual basis for the claim. 

Moving then to what the parties are calling the first Lim principle, it was suggested by Mr Gleeson and I think the submission was adopted by Mr Donaghue, that it is not a constitutional principle your Honours are dealing with, it is merely a common law principle.  In meeting that submission, if I could invite your Honours to look to Vasiljkovic v Commonwealth (2006) 227 CLR 614 at paragraph 49. We adopt what is said there about there being a division under the Constitution between the competence of the Executive and the legislative branches of the government.

BELL J:   I am sorry, what paragraph is this?

MR LENEHAN:   It is paragraph 49, your Honour.  This is dealing with the rejection of a submission that Australian citizens enjoyed a constitutional immunity from removal from Australia.  Their Honours say:

There is, however, a qualification to any general proposition . . . The qualification is well settled and applies not only to citizens but to individuals generally.  It reflects a division under the Constitution between the competence of the executive and legislative branches of government.

They go on to say, by reference to Barton that:

a fugitive offender cannot be arrested for extradition overseas in the absence of a warrant issued under the authority of statute.

That is the analogy we seek to draw for the purposes of the first Lim principle.  That is why we say that the first and second principles are best understood as interlocking constraints on power.  One principle constrains the ability of the Executive to detain.  That is the first principle; it requires a valid law.  The other, the second principle, imposes constraints on the power of the Parliament to pass such a law.

Coming directly, then, to the second principle and as to the general point that is put against us, which is, as we understand it, that we are seeking to erect an immunity which is really in the nature of a right, with all the usual consequences that that would lead to against our submission. What we say is that this is another example of what your Honour Justice Gageler referred to as a protection of the systemic integrity of the system of government that is created by the Constitution.

We say – and this is addressed in paragraphs 3 and 4 of our reply – that the real matters of constitutional concern here are those identified by – we refer to Justice Gummow’s dissenting reasons in Al‑Kateb where he refers to what was said by Justice Scalia in Hamdi and we say that what is really in issue in Lim is the concern that the Executive not have the power of indefinite imprisonment at its own will.  It is by reason of those concerns, we say, that there is created an area of freedom or, if you like, an immunity, but it is really that negative right, the right to be immune from law. 

As to the manner in which we say that principle is to be understood or framed – we put it as a general rule – we say executive detention absent judicial warrant is generally impermissible.  That is to say that it is a negative limitation, I accept that that is a form of immunity, and then we say adopting the language of M76 there are recognised exceptions to that rule, and we say limited both as to purpose and limited as to duration. 

Your Honours have heard that our friends prefer instead a formulation of infliction of harm as a consequence of wrongdoing which they say then enables you to determine whether you have got something which is penal in character.  We have pointed to the difficulties in that analysis which, I think, my friend, Mr Gleeson, accepts in paragraph 6 of our reply.  The short point is that the difficulty is avoided in the manner that is suggested by Justice Gummow’s reasons in Fardon which Mr Merkel took your Honours to yesterday.  We say that analysis may be seen to be reflected in the analysis of M76 in the joint judgment which, as we have noted in our reply, eschews any mention of the notion of punitive detention. 

That then avoids the difficulties that we have identified in the reply.  That is the very benefit of a categorical rule with exceptions.  As to those exceptions, we do say they can be developed.  We say they should be developed conservatively using analogies.  My friends, the Solicitor‑General for Western Australia and Mr Gleeson, have both taken your Honours to the passage in Lim, where their Honours recognise the exceptions of the purposes of removal or the consideration of an entry permit as exceptions that apply in particular to aliens for the purpose – therefore authorising detention. 

We accept that those are firmly established, but we refer your Honours to, in particular, page 29 and 30 of Lim where it is made clear that those exceptions are really an aspect of sovereignty, and territorial sovereignty.  So we say that having that territorial connection is the way to properly understand what was in issue and what was decided in Lim.

What my friends seek to do by saying that you can then detain in another place for the purposes of a foreign executive is to divorce the exceptions from their real roots in the sovereignty of the particular state that has power to exclude, which is the language used in Lim.  So, applying that here, what we say is that permitting detention at the unconstrained discretion of the Executive is something that the Court would be very cautious about.  You get that from a number of statements of the Court, including M61. 

Therefore, even if executive detention is necessary for removal here, which is what I think is the way it is ultimately put by Mr Gleeson to the extent he needs to rely on an exception, we say that power should be construed narrowly.  It should be subject to the M76 and S4 constraints.  That means that it must be for the purpose of entry or removal, and must really be fastened to a connection with those matters, and it must be pursued as soon as reasonably practicable.

Then we say section 198AHA travels well beyond those matters.  It is not in terms or, we say by any available process of construction, confined to detention for the purpose of removal.  It is rather for regional processing functions which, as I took your Honours to yesterday, is a very broadly defined term.  It is also, we say, not in terms that by any available process of construction would be relevantly confined in time to the time required for removal.  Mr Gleeson puts it that it is confined in time by reference to the purposes of regional processing functions, but that points to the difficulty.  We say the permissible exceptions are more constrained.  Here it can only be removal.  Removal is completed once the person is in Nauru.

It is also significant that the purpose of detention and its length, for that matter – and this is to pick up a point that is frequently made against us – remain within the sovereign power of Nauru, and so the exercise of that sovereign power, we say, is not subject to any constitutional constraints and that, in our submission, exposes the bias.

To deal very briefly with the point that is made in relation to Cram and Hughes, we rely and point your Honours to Re Wakim (1999) 198 CLR 511 and the relevant passage – and I am just directing your Honours to this – is at page 573 in paragraph 113. It was there said by Justices Gummow and Hayne that:

no amount of co‑operation can supply power where none exists.

That requires reference to any relevant constitutional limitation.  Here, to pick up what your Honour Justice Gageler pointed out to my friend, Dr Donaghue, in Hughes at paragraph 31, including Chapter III, and the short point we make is that that is the limit that we rely upon here.

Now, with considerable trepidation and very shortly, could I just say something further about head of power?  In terms of the aliens power point,

and just to respond to the connection that we understand is put which is on the basis of 198AD, which is the point that your Honour Justice Kiefel made to me yesterday, and it is said that that completes the process of removal authorised by that provision, as we understand it.

We would test that submission in this way.  The absence of an express limit confining section 198AHA to aliens, and the combination of that with the word “any action” and the definition of “regional processing functions” means that if transferees were taken to Nauru, then subsequently granted Australian citizenship while in detention in Nauru, the Commonwealth could nevertheless take action, make payments in respect of that detention. 

That is really just a means of pointing to the fact that, in my submission, there is no sufficient singling out of aliens in that respect.  Your Honours could compare that provision with, say, section 189 of the Migration Act, which where detention is involved makes clear that the power being drawn upon is 51(xix) by providing as a condition on the power that the relevant officer knows or reasonably suspects that the person is an unlawful non‑citizen.

That then leaves me with external affairs, and the powerful point that is put against us to the effect that – I say it is powerful partly because your Honour the Chief Justice puts it to me – the irregular movement of persons without permission is a global phenomenon.  Necessarily, it seems, I think our friends say, either a matter of international concern, perhaps, or at least has the capacity to affect international relations.  Now, Mr Gleeson said we do not take up the notion that each of those aspects of 51(xxix) have some purposive element.

That is incorrect.  Your Honours will recall that I specifically, in oral submissions yesterday, did put that proposition.  That then brings with it proportionality, and the short point that we make then is section 198AHA, in its text, does not have anything that would indicate that it is limited to that which is tailored to those purposive powers.  That is all I want to say about head of power, your Honour, and that completes the plaintiff’s submissions.  Unless your Honours have any questions.

FRENCH CJ:   Yes, thank you, Mr Lenehan.  The Court will reserve its decision.  The Court adjourns until 10 o’clock tomorrow morning.

AT 4.20 PM THE MATTER WAS ADJOURNED