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

[2015] HCATrans 255

[2015] HCATrans 255

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 WEDNESDAY, 7 OCTOBER 2015, AT 10.19 AM

Copyright in the High Court of Australia

__________________

MR R. MERKEL, QC:   If the Court pleases, I appear with my learned friends, MR C.L. LENEHAN, MS R. MANSTED, MR D.P. HUME and MS E. BATHURST.  (instructed by Human Rights Law Centre)

MR J.T. GLEESON, SC, Solicitor‑General of the Commonwealth:   May it please the Court, I appear with MR G.R. KENNETT, SC,  MS A.M. MITCHELMORE and MR P.D. HERZFELD for the first and second defendants.  (instructed by Australian Government Solicitor)

MR S.P. DONAGHUE, QC:   May it please the Court, I appear with MS K.E. FOLEY and MR C.J. TRAN for the third defendant.  (instructed by Corrs Chambers Westgarth Lawyers)

MR G.R. DONALDSON, SC, (Solicitor‑General for the State of Western Australia):   May it please the Court, I appear with my learned friend, MS F.B. SEAWARD, for the Attorney‑General for the State of Western Australia, intervening.  (instructed by State Solicitor (WA))

MR P.J. DUNNING, QC, (Solicitor‑General of the State of Queensland):   May it please the Court, I appear with my learned friend, MS F.J. NAGORCKA, for the Attorney‑General of the State of Queensland, intervening.  (instructed by Crown Solicitor (Qld))

FRENCH CJ:   Mr Merkel. 

MR GLEESON:   Your Honours, can I make an application at the outset if it is convenient?

FRENCH CJ:   Yes.

MR GLEESON:   On behalf of the first and second defendants, I would seek to move upon a summons which we would seek to have filed in Court and returnable instanter, a copy of which is only now being provided to the Court.  The purpose of the summons is to seek leave, which would be by consent, to file an amended special case which is in the form annexed to the summons.  I also seek to leave to file and rely upon an affidavit of Mr Andrew Buckland, which has been sworn this morning.  I make clear that the affidavit is only in respect to the interlocutory application and is not sought to be read in respect to the main appeal.

The purpose of the proposed amendment to the summons can be seen primarily if the Court would go to paragraphs 84 through to 89, which is on pages 22 to 23.  Paragraph 84, which was always in the stated case, was an agreement that Nauru as a sovereign state always had the ability to make or vary its own relevant laws and the then agreement of the parties to what would happen if the plaintiff were returned to Nauru was contingent upon Nauru keeping its arrangements intact.

The change which has now occurred is that, firstly, you can see from paragraph 88, or proposed 88, that the open centre arrangements which commenced in February and March of this year, first of all, have been sourced to their correct statutory foundation in Nauru.  Section 18C of the Regional Processing Centre Act and rule 3.1.3 of the centre rules but, more importantly, the arrangements which were in force from February and March until 5 October - that is, the beginning of this week - had these elements to them.  The original arrangements in paragraph 88 had four critical features. Firstly, they were five days a week.  Secondly, they allowed people to leave the centre unescorted.  Thirdly, they were 12 hours a day and, fourthly, there were eligibility conditions set out in the former paragraph 88.

If the Court turns to page 24, to paragraph 89, what is proposed is to record an agreement of the parties, firstly, as to the facts concerning the implementation of the arrangements up until 24 August, which indicates the number of persons who took advantage of those arrangements but then, most critically, in new paragraphs proposed, 89(b) and (c), two official documents of the Nauruan Government are proposed to be added as annexures to the stated case.  Your Honours may find those documents in a bundle, which is the proposed further amended special case book ‑ ‑ ‑

FRENCH CJ:   This is entitled “Further Supplementary Special Case Book”?

MR GLEESON:   Yes, your Honour.  The documents are at pages 41 and 45.  The document at page 41, which was issued on 2 October 2015, last Friday, by the relevant Minister in Nauru, indicates that from Monday, 5 October 2015 - that is, this week - the arrangements will be expanded in four relevant respects.  The first is they are to allow freedom of movement of asylum seekers 24 hours a day.  So 12 hours a day has become 24 hours a day.

Secondly, the expanded arrangements are seven days a week, so five days a week has become seven days a week.  Thirdly, there is an intention that these arrangements would be put before the Parliament of Nauru at its next sitting for consideration for legislation.  Fourthly, as per the third paragraph, the eligibility requirement is now satisfied in respect to all asylum seekers.  The final paragraph just indicates that the CLO network – that is the Nauruan Community Liaison Officer network which enables people to take advantage of these arrangements to catch buses to town, et cetera, is being expanded to enable this to take effect.  The aspect of the arrangements that people leave unescorted remains unchanged, as it were.

The relevance of the amendment, apart from making sure the Court decides the case on the correct basis as to the future, would be in the Commonwealth’s submission, which the plaintiff may wish to dispute, that the arrangement is now essentially come and go at the will of the relevant person.  The centre can be used for meals or sleeping or anything else the person wishes to use it for.  They do not have to remain there at any part of the day.

Your Honours, the second document which completes the more legal aspect of the arrangement is at page 45.  It is an amendment to the Immigration Regulations of Nauru.  Clause 4 indicates that regulations 9(6)(b) and (c) are repealed.  If your Honours could note as a cross‑reference that regulation is currently found in special case book 1 at page 504 to 505 so that, at least as for the future in understanding the law of Nauru, the Court could draw a line through paragraphs (b) and (c) which are on page 505, and the effect of that is that the visa still has condition (6)(a) which is residence is in the premises, but any obligations to remain in the premises at any particular part of the day have been removed from the law of Nauru.

The Commonwealth would, in due course, argue that the evident intent is to align the administrative exercise of discretion with the more formal statutory material.  So, your Honours, there are two submissions the Commonwealth makes in support of the amendment, apart from the fact it is now agreed.  The first is relevance - (a) it enables the Court to decide the case on the correct factual basis for the future and it will enable the Commonwealth, in due course, to submit that whatever be the position in respect of the past, in respect of the future, in no meaningful sense would this plaintiff or any person in Nauru be detained, either for the purposes of the Australian Constitution or the Nauruan Constitution and, therefore, all claims to relief for the future should be dismissed. 

The second submission by the Commonwealth is, while it is unfortunate that this has arisen so late, Mr Buckland’s affidavit explains how that has come about, namely, it was announced by Nauru last Wednesday, 30 September, and since that date the Commonwealth has moved heaven and earth to do everything ‑ ‑ ‑

FRENCH CJ:   You say the amendments are agreed.

MR GLEESON:   Yes. 

FRENCH CJ:   I do not think we need to hear any more about the amendments, if they are agreed.  On that basis the summons will be treated as filed, dealt with instanter and the special case amended accordingly.  Yes, Mr Merkel.

MR MERKEL:   Just so there is no misunderstanding, your Honour, we have given our agreement but we reserve our position in respect of costs.  We do not want to burden the Court with that at the moment.

FRENCH CJ:   I understand that, Mr Merkel.

MR MERKEL:   Your Honours, we have handed up an oral outline – an outline of oral submissions. 

FRENCH CJ:   Just bear with us for a moment, Mr Merkel.  Could we indicate, Mr Merkel, that we think it best if you deal with the question of standing in reply.

MR MERKEL:   If your Honour pleases.  Can I just hand up one document so it is before the Court for my learned friend when he addresses standing?  It is the amended application to show cause in M80, which is the parallel proceeding in Papua New Guinea, the issues of which substantially overlap with the main issues in this case.

FRENCH CJ:   What does that have to do with standing?

MR MERKEL:   Relying on what your Honour said in Corneloup, the determination of the issues in this case will have or may have a significant consequence for other litigation in the Court based on the same legal issues.  I would only want to have the document before your Honours.  It has been running in parallel with ‑ ‑ ‑

FRENCH CJ:   I understand that.  I just do not see the relevance of it, Mr Merkel.  I do not think we need to receive it at this stage.

MR MERKEL:   If your Honour pleases.  Can I go straight to the submissions that we wish to put in respect of Lim which are set out in our oral outline?  For the purpose of making these submissions, we assume that the legislation in issue, being section 198AHA and the Financial Framework Regulations, fall within a head of power.  My learned friend, Mr Lenehan, will be addressing your Honours later as to why that is an erroneous assumption, but we will assume it in the Commonwealth’s favour.

In our outline we set out three interlocking principles which we submit to the Court are established as constitutional principles by Lim.  That is in paragraphs 6, 7 and 8.  We wanted to go at the outset to the way in which Justice Gummow reformulated the Lim principle in Fardon 223 CLR 575, and the passages where his Honour discussed this issue in Fardon are at paragraphs 78 through to 84.

His Honour at paragraph 77 identified the constitutional principle which we say was stated in Lim and particularly the words that “involuntary detention of a citizen in custody . . . is penal or punitive in character” and his Honour then said at 78 the expression of the principle in that form has certain indeterminacies and then his Honour mentioned “citizen” and we say that this Court has recognised in a number of times the principle applies equally to an alien who has certain vulnerabilities in that regard, but to aliens and citizens, and his Honour makes the point over the page that many aliens “have a statutory right or title to remain in Australia”, therefore there is no rationale for confining the principle to citizens.

Then his Honour commented about the difficulty of an “unstable nature of a dichotomy between civil and criminal” and then his Honour stated at paragraph 80:

I would prefer a formulation of the principle derived from Ch III in terms that, the “exceptional cases” aside, the involuntary detention of a citizen in custody by the State is permissible only as a consequential step in the adjudication of criminal guilt of that citizen for past acts.

Then his Honour explains that at 81 that:

That formulation also eschews the phrase “is penal or punitive in character” –

and emphasises that –

the concern is with the deprivation of liberty without adjudication of guilty rather than with the further question of whether the deprivation is for a punitive purpose.

Then his Honour makes the point:

Further, “punishment” and cognate terms have an indeterminate reference, and are “heavily charged with subject emotional and intellectual overtones”.

Similar thinking was expressed by Justice McHugh in Lim itself.  We would say we are content to adopt both the Lim formulation or Justice Gummow’s variation of it.  We have actually expressed our approach in paragraph 7 of our outline which is basically that what their Honours in Lim and what Justice Gummow and a number of Judges of this Court in M76 have accepted is that it is the character and nature of involuntary detention as such makes it characterised as an incident of the exclusive judicial functions subject to certain exceptions. 

We say that – and we make this point in paragraph 8 - that the critical issue is the characterisation of the purpose of detention as discerned from the statute to see two things.  One is, is it a constitutionally permissible purpose and, secondly, does it satisfy the test as set out in paragraph 8 that the legislative mandate must be both limited temporarily as well as to purpose and must be for no longer than is necessary to achieve the administrative processes required to carry into effect those purposes.

FRENCH CJ:   Now, the factual premise upon which these legal submissions are being made is that the conduct of the Commonwealth in relation to the position in Nauru - in relation to the plaintiff in Nauru constituted detention by the Commonwealth of the plaintiff?

MR MERKEL:   Your Honour, that is correct but the key to what your Honour has asked of me lies in the word “by”.  We say ultimately that this detention on the facts set out and to be inferred from the special case is that that detention was procured, caused, effectively controlled by and was at the will of the Commonwealth and that is sufficient to attract the Lim principle, looking at it as a matter of substance and form and looking at it as a matter of practical consequence as well as the legal framework.

FRENCH CJ:   It is not so much a matter of inference, is it, as a matter of characterisation of the Commonwealth involvement in the arrangements in Nauru?

MR MERKEL:   Yes, your Honour.  We have a lot of evidence about the characterisation.  Part of it is within the statutory framework but part of it lies, for example, in the Transfield contract.  We will be taking your Honours to the Transfield contract to show that this is essentially characterised as the contract of the operator of the detention centre subcontracting out all the services required to be provided to conduct the Nauru RPC as a detention centre. 

So to the extent that contract requires an inference, the only inference is that the Commonwealth has the power and entitlement to do what it has contracted to do.  It is in that narrow sense that an inference is required but otherwise we say that the formulation we have used in our outline and I have just put to the Court is sufficient to attract the Lim principle which is not sort of set in statute.  It looks to the substance of whether the Commonwealth is effectively controlling this detention.  We will take the Court at some length to the factual basis and the legal basis for that conclusion.

I should say before leaving Fardon, Justice Hayne, at paragraphs 196 to 197, agreed with his Honour Justice Gummow’s analysis but, conceding the force in what his Honour said, preferred to leave for another day whether preventative detention of the kind that was being considered in Fardon would be beyond a Chapter III power or would offend Chapter III.  He left that for another day.  But subject to not deciding that point his Honour agreed with Justice Gummow.

FRENCH CJ:   But you are directing us to the Lim principle, as you call it, as something which informs the construction of the power to exercise restraint under section 198AHA?

MR MERKEL:   Yes, your Honour, and also to the extent that this Court is able to construe a power of detention embedded in the Financial Framework Regulations relied upon by the Commonwealth we say the Lim principle applies to those as well.  That is the statutory context in which this argument is put.  Can I just give your Honour references.  I do not think I need to take your Honour to it, but this Court on a number of occasions has accepted that the protection applies to citizens and aliens alike. 

I have taken your Honours to the passage of Justice Gummow in Fardon, but there is also in Vasiljkovic 227 CLR 614, at paragraph 49, Justice Gummow and Justice Hayne, an acceptance that there is no rational distinction between citizens and aliens. But also, importantly, we say that there is no rational basis for a territorial or extraterritorial dichotomy. A number of judges dealt with that in CPCF 316 ALR 1 and, again, I will just give your Honours the passages: Justices Hayne and Bell at paragraph 149; Justice Kiefel at 276; and Justice Gageler at 373 to 374.

We say that, particularly in reliance on what Justice Hayne and Justice Bell said at paragraph 149 it would be standing principle on its head to say that the Executive could do outside our territorial borders what it has no capacity or authority to do within the territorial borders.

So we come to what really is ultimately the critical part of the Lim analysis, which is the characterisation of what we say is the limited purposes available under the Constitution for involuntary detention by the Executive. Can I take your Honours to S4 253 CLR ‑ ‑ ‑

FRENCH CJ:   If you can cite the page numbers for those electronic advices, it would help.

MR MERKEL:   Sorry, at page 219, your Honour, and the relevant passage appearing from the judgment of the plurality is at page 231. 

FRENCH CJ:   Thank you.

MR MERKEL:   As we have set out in our written submissions we accept that, ultimately, this case turned on the statutory purposes in the Migration Act for the detention pending a decision on the non‑compellable discretion of the Minister as to whether to grant a visa, but the Court discusses Lim at 231 in paragraph 25 and then starting in 26 it said:

Importantly, the Court further held that the provisions of the Act which then authorised mandatory detention of certain aliens were valid laws if the detention which those laws required and authorised was limited to what was reasonably capable of being seen as necessary for the purposes of deportation or to enable an application for permission to enter and remain in Australia to be made and considered.  It follows that detention under and for the purposes of the Act is limited by the purposes for which the detention is being effected.  And it further follows that, when describing and justifying the detention as being under and for the purposes of the Act, it will always be necessary to identify the purpose for the detention.  Lawfully, that purpose can only be one of three purposes –

and that is the context of the Migration Act for aliens at that point.  Then, can I jump ahead to paragraph 34 at page 233 where their Honours said:

It follows that the Executive’s consideration (while the plaintiff was in immigration detention) of whether he might seek and be granted a protection visa had to be undertaken within that framework.  As already observed, the authority to detain the plaintiff is an incident of the power of the Executive to remove the plaintiff or to permit him to enter and remain in Australia, and the plaintiff’s detention is limited to what is reasonably capable of being seen as necessary to effect those purposes.  The purpose for his detention had to be carried into effect as soon as reasonably practicable.  That is, consideration of whether a protection visa may be sought by or granted to the plaintiff had to be undertaken and completed as soon as reasonably practicable. 

It is in that context that in our oral – the summary of our oral outline at paragraph 3 we have also referred to what was said by Justices Crennan, Bell and Gageler in M76 at paragraph 322.  I do not need to take your Honours to it - at paragraph 139 that for the, what I will call the “second Lim” principle – no, sorry, the “third Lim” principle, the purpose must be identified.  It is a limited purpose, limited by the constitutionally permissible purposes and it has then the temporal limitation as well, it must be for no longer than is reasonably necessary the administrative processes required to come in to effect those purposes. 

As was pointed out in S4 and the passage I had taken your Honours to, the characterisation of the purpose is the first question.  When we come to it, when we look at section 198AHA, it is not possible to discern from that statutory framework a purpose of detention as opposed to the purpose of a regional processing process, but if it were able to be read down, and we say it is not for the Court to supply the requisite connection, but if it were able to be read down it cannot be read down to confine constraints over the liberty of an individual in any temporal way or to any limited purpose given, and I will come to this shortly, that the criteria for the Minister’s discretion to designate a regional processing country is no more than and no less than the Minister thinks it is in the national interest.

So that is why we have put our central focus on the Lim principle as we have by purpose.  Can I now come to section 198AHA in that context?  I need to start with the statutory context, and I start in the Migration Act, your Honours, at Subdivision B of Part 2 of Division 8 which is 198AA.  Just looking ahead, I should say, when we come to the memorandum of understanding in the recitals between Australia and Nauru there is an embellishment of the purposes of the regional processing in Nauru which adds to the recitals set out in 198AA. 

But the section primarily is designed to do two things:  to prevent people smuggling and people coming to Australia via that process which could include the resulting loss of life, and also trying to satisfy Refugee Convention obligations by preventing non‑refoulement, but in (c) it makes it clear – this is 198AA(c):

it is a matter for the Minister and Parliament to decide which countries should be designated –

and then (d) relevantly the:

the designation . . . need not be determined by reference to the international obligations or domestic law of that country.

So we see a foundation laid for an extraordinarily wide discretion.  Section 198AB(1) gives the Minister power to:

designate that a country is a regional processing country.

And (2) is the critical subsection in terms of this analysis:

The only condition for the exercise of the power under subsection (1) is that the Minister thinks that it is in the national interest to designate the country to be a regional processing country.

Just jumping ahead, we say that if any limitation on the words “an action includes a restraint over the liberty of a person” is to be found, the characterisation of that restraint could only be ascertained from 198AA(2) which is as broad a basis as it gets.  In subsection (3) we get some assistance, not in respect to the relevant question but some assistance because the Minister must have regard under (3)(a) to whether the country is given assurances that will not expel or return a person in effect in a sense – in a non‑refoulement sense without stating that, and (ii), that the country will make an assessment to permit a person to make a claim under the Convention, and (b):

may have regard to any other matter which, in the opinion of the Minister, relates to the national interest.

The Minister is given power under subsection (6) to revoke the designation.  Section 198AC requires the relevant documents to be laid before Parliament.  Then we come to a section your Honours are very familiar with, 198AD, and may I just say this?  Not a lot turns on it in terms of 198AHA but the purpose of the Commonwealth in a taking is spent by the taking being carried into effect by the person being taken into Nauru. 

So, what 198AHA does is seek to create an extended purpose, no doubt, by reference to the national interest, conduct that the Commonwealth may itself engage in or contract for others to engage in in a regional processing country.  The other sections of 198AD I do not need to trouble your Honours with.  It has happened here where there are two or more, the Minister may designate or direct one to the place where persons are taken.  At the moment, the direction in place is that persons are taken to Nauru so the plaintiff would be taken to Nauru essentially but for this litigation. 

Again, on the direction at subsection (8) of AD the only condition for the duty under subsection (5) is that it is in the public interest to direct the officer to take the unauthorised maritime arrival to the country specified in the direction.  Section 198AE is significant because that is the non‑compellable discretion that 198AD does not apply.  There is an exception in 198AF that is not relevant.  Non‑acceptance is provided for in 198AG and there is an exception for certain transitory persons under 198AH.  We come in that context to 198AHA.

I put these submissions, again, on the basis that my learned friend, Mr Lenehan, will be taking your Honours to a construction of this section for the purpose of head of power and I am assuming those submissions are not accepted and we are giving this section its ordinary meaning.  But its ordinary meaning is one of extraordinary width.  Subsection (1) says:

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.

Subsection (5) defines an “arrangement” as including:

an arrangement, agreement, understanding, promise or undertaking, whether or not it is legally binding.

“Regional processing functions” we have already ascertained from the statutory provisions I have taken your Honours to essentially will mean processing for the purpose of determining whether a person is a refugee or not.  But that is the core function.  What the definition ensures is that the actions covered by 198AHA have a far broader ambit than what would normally be a regional processing function.  It is defined in subsection (5)(b) as including:

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, whether the implementation or the taking of the action occurs in that country or another country.

So we have the precondition for the operation of the section defined in the broadest possible terms to cover a multitude of arrangements down to understandings and a multitude of core and incidental functions which are given an extended definition in (5)(b).  Then subparagraph (2), in respect of the section once it applies:

The Commonwealth may do all or any of the following:

(a)take, or cause to be taken, any action in relation to the arrangement or the regional processing functions of the country -

So the only legal requirement is there be a requisite connection – that word may give some scope for reading down, but a requisite connection between the action and regional processing functions with its wide definition -

(b)make payments, or cause payments to be made, in relation to the arrangement or the regional processing functions of the country -

So again we have the same formula, and –

(c)do anything else that is incidental or conducive to the taking of such action –

Subsection (3) has been the subject of some difference in the written submissions.  What is said there is:

To avoid doubt, subsection (2) is intended to ensure that the Commonwealth has capacity and authority to take action, without –

this is an important word –

otherwise affecting the lawfulness of that action.

Our position for the purposes of our case is that we need go no further than say that the authorisation given in subsection (3) is a statutory authorisation for the purpose of the decision in Williams and is also a statutory authorisation for the purposes of the Lim principles – satisfying the Lim principles, namely that involuntary detention by the Executive must be authorised by statute. 

So, accepting the section is valid, we say that that is the intended and actual operation.  Whether or not it has a wider operation is not a matter that is necessary to decide.  We do not contend that it authorises the commission of an illegal act in Nauru, or constitutes a defence to a tort allegedly committed in Nauru, but once any question arises about whether the Commonwealth’s conduct is authorised by statute, we say this clearly is intended to be and constitutes such an authorisation.  We say we do not need to go any further than that.

FRENCH CJ:   I know you have a constructional argument about the application of the section based on the words “person or body” in subsection (1), but putting that to one side, assuming the section applies to arrangements with a country, do you accept that the section properly construed – questions of validity aside – would authorise for the purposes of Australian law Commonwealth action restraining the liberty, including detaining a person in another country with whom an arrangement has been made?

MR MERKEL:   Yes, your Honour.  We are putting this on the basis that we accept the Commonwealth’s contention.

FRENCH CJ:   Yes.

MR MERKEL:   There is an MOU, that is the arrangement and the Transfield contract is an action which is authorised by this section.  So our argument is put on accepting the Commonwealth’s position, although not on the nature and extent of the authority, although I am not sure that the Commonwealth would dispute our two essential limbs, namely it is an authorisation for the decision in Williams and it is authorisation required by the first of the Lim principles.  Now, it is in that context that we come to the extended definition of “action” in subsection (5) where it says it includes:

(a)exercising restraint over the liberty of a person; and

(b)action in a regional processing country or another country.

We say a number of things about the section in the context of Lim.  Firstly, we observe that there is no limitation on the restraint over the liberty of the person in terms of the nature of the restraint, the place where it occurs, the circumstances in which it occurs and, critically, amongst other things, about the purpose or duration of the restraint with the consequence that it is necessarily unable to satisfy the criterion so clearly enunciated in S4, but in the other cases, that the constitutionally permissible purposes are limited.

These are not limited in any definable way but if they were so limited to assist another country in respect of regional processing and exercise restraint in unconstrained circumstances could not be a limited purpose, nor is the duration able to be ascertained because of the breadth of the authorisation.  So we say the criteria in paragraphs 7 and 8 of our written outline simply cannot be satisfied by this legislative process.

We would also say that it is a process that is fraught with risk and that on a number of occasions, as we have set out in our written submissions, when it comes to liberty of the individual the Court should be very cautious about its interpretive approach to read up a power restraining liberty.  Quite the contrary, the principle of legality would suggest a reading of the power to confer a restraint in terms and for purposes no wider than the statute provides for.

So, even if we tried to read this down, we say that the only reading down that is capable is by reference to the Minister’s decision that it is in the national interest to designate a country as a regional processing country without regard to the laws of that country or the international obligations of that country.  So we say that this has been a somewhat overzealous endeavour to cover and protect anything and everything that the Executive does offshore and we say that the Court should be very cautious to look for a connection to limit the purpose or a basis for limiting the period of time.

FRENCH CJ:   I am sorry, what does that mean?

MR MERKEL:   We say that critical to the analysis is what is the purpose of the detention, not the purpose of regional processing.  We know that.  But what is the purpose of the detention or what is the purpose, more particularly, of the restraint over the liberty of a person?  We say it is not really discernable from the statutory scheme and, therefore, it is not ‑ ‑ ‑

FRENCH CJ:   That is a problem that goes to validity, you say?

MR MERKEL:   Yes, it goes to validity but it also goes to the inability of the scheme to satisfy the Lim principles.  If it be valid, there is no limitation to any constitutionally permissible purpose; it does not fall within any recognised or historical exception to attract the Lim principle, but also there is no restraint.  In Lim itself one of the reasons why the Court upheld the statutory provisions is built into the statutory scheme were time limits for the processing of the aliens application. 

In S4 there was not an embedded time limit, but there was a process which enabled the Court as set out in the judgment at the commencement of the detention and from time to time to determine whether the second limb of the Lim test, which is the one we have set out in paragraph 8, is satisfied.  In M76, in the judgment to which I have referred, we have this very strong statement, which is accepted in S4 as well, that the constraint on liberty - in this case we are saying involuntary detention - must be for no longer than is reasonably necessary to carry into effect the limited purpose.  We say there is simply no way for reading into this statutory scheme the protection that is required.

We also say, although we need not get there, in paragraphs 11 and 12 of our outline, to the extent that the Commonwealth and Transfield seek to put forward the analogy between Nauru’s functions of investigating and ascertaining a right to remain in Nauru of an alien with Australia’s functions, that a false dichotomy because Australia’s functions in respect of investigating and ascertaining a person’s right to come to Australia as an alien when they have no right to be here is dealt with entirely within Australia’s statutory framework and is an exercise and an incident of Australia’s sovereign power. 

Nauru may have the same right as a sovereign power but we say what the Commonwealth is seeking to do is to say Australia’s purpose can be the purpose of the exercise of a foreign country’s sovereign power, which we say is not a constitutionally permissible purpose in the context of the Lim principle for detention.  It may be in many other ways but not in that context.  We dealt with that in paragraph 11 of our outline.

Finally, before leaving the section, at paragraph 12, we have said in our written submissions at paragraph 93 that there is a punitive purpose underlying these provisions of detention.  They are ascertained in a brief form from what I took your Honours to earlier and that is the essentially deterrent nature of the exercise of power, but it is spelt out a little more fully in the memorandum of understanding between Australia and Nauru, which is at page 67 of volume 1 of the special case book, particularly at page 69, starting with the heading “Recognising”:

The need for practical action to provide a disincentive against Irregular Migration, People Smuggling syndicates and transnational crime and intended to promote orderly migration –

and we put an emphasis on “disincentive”.  Then the third dot point:

The impact that an arrangement could have in providing a disincentive for Irregular Migration and creating increased protection and settlement opportunities –

and the last dot point:

The need to ensure, so far as is possible, that no benefit is gained through circumventing regular migration arrangements –

Then what follows is the understanding that there would be a transfer to Nauru for processing of asylum claims and Nauru may raise and would settle an agreed number.  We have articulated that in our written submissions, paragraph 93, and I will just take your Honours to that for a moment.  We have cited Justice McHugh in Re Woolley but essentially there is no doubt from what I have taken your Honours to that deterrence is a principal objective and, as we set in paragraph 93, general deterrence bears a punitive character because it is a “kindred concept of retribution or punishment”.

FRENCH CJ:   But detention is not the necessary feature of the MOU, is it?  I have in mind paragraph 76 of the special case.

MR MERKEL:   Your Honour, we say that paragraph 76 is suggested to say more than it really says.  It really says no more than the Commonwealth and the Minister have not sought to impose or asserted a right to impose, but we know that neither has legal status in Nauru.  They have not said that they neither requested, desired or had any role in the detention so we say that paragraph 76 is really no more than a statement of the sovereign position of Nauru and that the Australian Government could not impose any such restriction.

But if it were given a wider meaning, your Honour, it still does not carry one to a conclusion that is inconsistent with what I am putting.  We say that it is clear from what we have set out here that the regional processing functions and the removal of people to Nauru and, as we well know, the statements from Ministers they will never be settled in Australia made continuously is designed to deter, and we say the conditions of detention in Nauru are one of the integral elements of that until now. But we do not wish to take that ‑ ‑ ‑

FRENCH CJ:   But that is not a necessary consequence of the MOU.  Detention arrangements are not contemplated by the MOU.

MR MERKEL: We accept that, your Honour. We say that they are not dealt with there. Can I move on to the Financial Framework Regulations? These are the Financial Framework (Supplementary Powers) Regulations, and four headings are relied upon - 417.021, 417.027, 417.029 and 417.042. We say that the subject matter in each of the headings is totally silent on detention and the words or language used is not capable of reading up detention as authorised and it is the involuntary detention that must be authorised, not the regional processing. So further, the principle of legality would suggest that the statutory authorisation that this may constitute not be read up to include a restraint on liberty.

Finally, there are the cases we had referred to earlier which require unmistakable clarity required to authorise what would be the commission of the tort, what would be detention and, of course, that necessarily is absent here.  So that is just on the construction point.  It just does not authorise and cannot be construed as authorising detention.  If we were wrong on that, then we say that the regulations suffer the same deficiencies as we have put forward in respect of section 198AHA.

If those steps in our argument were accepted, then we say it follows there is no statutory authority for the Transfield contract and therefore our claims that the contract is not valid because it was not entered into with statutory authority and it has not been performed and payments have not been made under it since with statutory authority means that it is invalid and our claims based on that cause of action ought therefore succeed and are not affected by what may be a dismantling of the statutory regime which may occur in the near future when Parliament – or if Parliament repeals the legislation that is still currently in place which would enable the detention system to be reimposed by withdrawal of approval at any time.

That, of course, is not sufficient for the other aspect of our case which is the Lim principles and we have set that out in paragraph 15.  The absence of statutory authority for the Commonwealth’s involvement raises the question of whether that involvement attracts the Lim principles and we say there are two matters in that regard.  The first is whether the plaintiff was involuntarily detained and, secondly, whether the detention was by the Commonwealth in the context I had mentioned earlier to your Honour the Chief Justice. 

We do not believe there is a serious dispute about her involuntary detention between January or, relevantly, March and August when she was taken to Australia.  There were no open centre arrangements.  She was detained in circumstances that were relevantly indistinguishable from the decision of Justice Von Doussa in Attorney‑General v Secretary for Justice which is set out in the special case book at 590.  So, we do not understand that his Honour’s decision is in any way disputed. 

His Honour analyses the circumstances in that case, but can I just indicate to your Honours two matters which were put to his Honour, namely that there was no offence for leaving the centre and there was no capacity to exercise compulsive or coercive power against a protected person or transferee under the earlier regime.  That has all altered since his Honour’s decision. 

So since his Honour’s decision, one of the matters relied upon for saying this was not deprivation of liberty or detention and his Honour acquainted the same for the purpose of Article 5(1) of the Nauruan Constitution, the two elements that have changed since - and I will take your Honours to this scheme in due course but, particularly, section 18C(1) of the RPC Act was enacted together with a number of amendments which gave coercive powers to strip search, search premises and so forth. 

So, the absence of criminality for departure and the absence of coercive power under statute that was sought to be unsuccessfully relied upon by the Nauruan Government before his Honour, that has all altered and the further alteration that came about as centre rule 3.1.3 was gazetted in July 2014. 

So the legal framework that his Honour was considering was essentially the immigration regulation that made it a condition of a visa that you must reside in the centre and could not leave except with permission and with escort which was – the escorting part was removed in February, the permission part, the other aspect, has just been removed now.  The involuntary detention, we say, is clear. 

That gets to the critical question of was it by the Commonwealth?  We approach this - and I do not need to take your Honours to it - but in reliance on the decision of the Court in Crump 247 CLR 1 at paragraph 60 at page 26 where, in the plurality judgment it was observed that in the:

fields of constitutional discourse, regard properly may be had to matters of substance as well as of form and to practical as well as legal effect.

Under that rubric we would now take your Honours to the facts in the special case that we say justify a finding of constitutional fact of the two matters set out in paragraph 15.  This is directed to the second of the matters, the detention as being funded, authorised, caused, procured and effectively controlled by and was at the will of the Commonwealth.  We are here concerned with the period of the plaintiff’s detention which was 23 January 2014 to 2 August 2014, but I make it clear that our claim in the application is based upon her detention from 24 March 2014 which is the date of the Transfield contract.

FRENCH CJ:   Now, this argument works on the premise, contrary to another argument that you want to put at some stage, that detention is effected under Nauruan law.

MR MERKEL:   We put it on both alternatives, your Honour.  We say the same result arises because we say that the reliance on Nauruan law is misplaced if it is still detention by the Commonwealth because the Nauruan Government cannot confer constitutional power under Chapter II on the Executive.  The Executive either has power under ‑ ‑ ‑

FRENCH CJ:   I understand that.  The assumption for the sake of argument, as it were, is that the plaintiff – and we are looking at past detention of course – was detained pursuant to the Act, regulations, conditions of the visa, et cetera, and the powers conferred on the operator of the centre pursuant to Nauruan law.  Now, you are saying the Commonwealth nevertheless can be characterised as detaining the plaintiff for a variety of reasons, a constellation of facts which you are putting to us.

MR MERKEL:   That is correct, your Honour.  In making that concession, I do not want it to be accepted that if it is contrary to Nauruan law that aspect is removed but ‑ ‑ ‑

FRENCH CJ:   Well, there is a cold question as to whether we should even be looking at issues of Nauruan law.

MR MERKEL:   I understand that, your Honour, but we put this submission on the assumption that the Nauruan law relied upon is operative and valid.

KIEFEL J:   Are you putting it that Nauru was acting effectively on behalf of the Commonwealth?  I will not use the word “agency” but that kind of – some of the words that you use in paragraph 15, “authorised”, “procured”, “controlled”, seem to convey that kind of notion.

MR MERKEL:   Your Honour, when I take you to the facts, we do not say there is any express agency but we say ultimately what these facts show is that the Commonwealth effectively operates and conducts the ‑ ‑ ‑

KIEFEL J:   Through Nauru.

MR MERKEL:   We say that it is quite difficult to add the words “through Nauru” on this factual scenario because when I take you to the Transfield contract but the totality, it is entirely under the Commonwealth hierarchy through Transfield and Wilson, and Wilson’s 138 authorised officers, that the powers of detention are effectively controlled and implemented.  The Nauruan Government has no real role in respect of that.

Now, our learned friends rely on the function of the operational manager but when you go to the Transfield contract, Transfield’s requirements – and I am jumping ahead a bit – are to act in accordance with direction, policies, et cetera, of the Commonwealth, not the operational manager.  In fact, her role is silent. 

So whether that ultimately is an implication that one might take from the facts that Australia is effectively conducting this centre for or on behalf of Nauru may be an implication but it is not a necessary part of our case because we only need to stop at the fact that Australia is in effective control of this detention and is operating the centre.

KIEFEL J:   It has provided - you say, provided ‑ effectively provided a detention centre and provision is sufficient for detention itself under the Lim principle?

MR MERKEL:   Well, provided and conducts because the operation of the centre, your Honour, is totally within the Commonwealth hierarchy save for a person who is called the operation manager that has certain functions but the evidence is totally silent on the operation manager having a role in the day‑to‑day detention of the individuals.  But I need to take your Honour through the whole of the hierarchy to come ‑ ‑ ‑

KIEFEL J:   Just before you do that, can I just take up a question directed to paragraph 76 of the special case again because I think that highlights the distinction that appears to be implicit in what we are discussing.  On one view of it, paragraph 76 reads that the Commonwealth would not have sought to detain the plaintiff.

MR MERKEL:   We say that is reading a little more into it than it actually says, your Honour.

KIEFEL J:   I would like to hear whether or not there is any dispute about this because this is one of the problems with these kinds of provisions in special cases but perhaps we could leave it for later.  You say the language does not bear that meaning?

MR MERKEL:   We say it does not bear that meaning because the word “impose” clearly has a meaning of requiring and it is a recognition of no more than the fact that is not in dispute that Nauru’s sovereignty means only it can impose those restrictions but we say ‑ ‑ ‑

KIEFEL J:   But in the way it is framed is it not capable of bearing the meaning that the Commonwealth would not have requested Nauru to impose the restrictions and thus stands in contradiction to part of your paragraph 15?

MR MERKEL:   Your Honour, we say the word “request” goes to a factual aspect beyond what the paragraph says because if the paragraph intended to say that the Commonwealth had no role in requesting, organising or facilitating the detention it would have said so, so that the wording there is restricted and should not have any more read into it than the words bear.  But, more importantly, your Honour, we say what we are looking at is the legal and factual framework by which the detention occurs and it does satisfy the practical and legal framework of this is effectively detention conducted and operated by the Commonwealth and at the will of the Commonwealth and it is that part of the case that I wanted to take your Honours to, to the facts that show this.

Whether or not the Commonwealth requested it or it was in the interests of the Commonwealth to have this detention is not to the point.  The question is whether the Commonwealth Executive is in fact conducting a detention facility in another country.

GAGELER J:   Mr Merkel, what is the purpose of looking at this closed historical period?  Where does it lead?

MR MERKEL:   The past historical period, your Honour, would show that we are entitled to the relief – all of the relief we seek in respect of past conduct and it lays the foundation, and this was part of the standing argument, to whether there is a risk of that being repeated in the future.  But it is all about whether her detention was unlawful as far as the Commonwealth is concerned, but it also leads to the Transfield contract because if this is unlawful, if we fail for some reason on the Williams limb of the contract it still fails on the Lim limb.  So there are two aspects to this case.

GAGELER J:   It leads to a declaration as to past events.  Is that right?

MR MERKEL:   Yes, but it could also lead to an injunction, your Honour, that they not be repeated.  At the moment, while we are standing here today, the only difference between the past regime and the present is that a blanket discretionary approval has been given for people to leave the centre, which the special case accepts can be withdrawn at any time without giving any reason.  So until the legal framework has altered, the past has a real risk of being reverted to in the future.  One only needs to foreshadow if some critical event occurred that made the government change its mind on this open policy, it only needs to say to people at the detention centre one day the open centre is now finished and that is it.

FRENCH CJ:   Which government are you talking about?

MR MERKEL:   The Nauruan Government.  But that does not in any way undermine our case.  The fact that the Nauruan Government has sovereign power we say is not inconsistent with the case we are putting on Lim.  Can I just go to what I will say is the legal framework, and I do not need to take your Honours to the detail of it, but the first series of steps is that Nauru was designated as the place to which the transferees were to be taken. 

The designation – and I will give your Honours just the references, under 198AB(1) was on 10 September 2012, and that is at special case page 37, paragraphs 10 to 11.  The first ministerial direction under section 198AD(5) was for Nauru and Papua New Guinea - that was on 29 July 2013.  That is special case 62.  The subsequent direction which is binding at the moment under 198AD(5) was made by the Minister on 5 July 2014 designating Nauru.  That is at special case 86. 

So the current situation is that the designation by the Commonwealth is that as from 5 July 2014, and this covers the current period, is that Nauru is to be the place where transferees are to be taken under section 198AD.  The second memorandum of understanding which came into effect on 3 August 2013 is at special case 67 and clauses 10 to 14 changed the original basis which was before Justice von Doussa, which allowed for transferees to get temporary settlement in Nauru, and that has led to changes in the immigration regulations.  So, finally, we have the administrative arrangements which are set out at special case 73 to 86 were made on 11 April 2014.  Could I just briefly take your Honours to those?

So what I should say in relation to the questions your Honour the Chief Justice and your Honour Justice Kiefel raised with me is it is not part of our case that Nauru has no role in or involvement in the detention centre.  When one looks at this legal framework and particularly these administrative arrangements, it is clear that at that high level it was joint endeavour.  Both Australia and Nauru had a critical role in overseeing the framework of the centre.

But when one goes down to the day‑to‑day operation of the centre as a detention centre, that joint endeavour becomes an Australian endeavour.  So at the top level we accept Nauru’s sovereignty and Nauru’s laws govern the centre and those laws impose the requirement of detention.  The next level, administrative arrangements made under the MOU, that is a solely Nauruan endeavour and we accept paragraph 73 of the special case about that.  At the second level you have got the MOU administrative arrangements which show the detention is a joint endeavour, but at the third level on the ground one sees this is an Australian endeavour, not a joint endeavour, as may be foreshadowed in the administrative arrangements.

So can I take your Honours to the administrative arrangements at 73 through to 86?  We see at page 75 the role of the operational manager who is a person declared under the RPC Act, if I can call it that.  The earlier MOU is superseded.  Programme coordinator – this is at page 75 – is:

an officer appointed by the Government of Australia –

So that is a Commonwealth government officer –

to manage Australian services contracts at a Centre.

So that is significant and it helps explain the Transfield contract which is managed entirely by – not the program coordinator but by the Commonwealth, but the program coordinator is one part of that coordinator.  “Service provider(s)” are the entities contracted to provide services, and they have a role because departure from the centre can be given – permission can be given by a service provider.  The special case would show that the only service providers are service providers contracted to provide services by the Commonwealth.  There are no Nauruan Government service providers that appear anywhere in the special case.

“Staff Member” is defined in the RPC Act has certain roles including officers of the Commonwealth who are assigned duties at the centre, and we have set up in the special case is a Commonwealth government officer at the centre.  Paragraph 1.1 makes it clear that all costs for constructing and operating the centre are to be costs of the Commonwealth.

The transfer process is set out in 2, but importantly, 2.2.6 at page 77 provides for Australian officials to lodge applications for transferees under the regulations, and can I just ask your Honours to note the form of the application is at page 331 of the special case and I will take your Honours in more detail to the regulations, but they require the Commonwealth to make the application and pay the visa fee of $3,000 and all extensions of the visa are to be made at the request of the Commonwealth officer.

Then there are the practical aspects about arrival at page 78 and then arrangements at the centre are dealt with at page 79, clause 4, 4.1.2 is the:

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

In 4.1.3 it says:

The Operational Manager will be supported by contracted Service Providers and Staff Members, who will provide –

the various services.  Then at 4.1.4 says:

The Government of Australia will appoint an officer as a Programme Coordinator.  The Programme Coordinator will be responsible for managing all Australian officers and services contractors in relation to a Centre.  This will include ensuring all contractors deliver services to standards outlined in their contracts.  This will be done in close liaison with the Operational Manager.

Then the Operational Manager is given a role under 4.1.6 to “monitor the welfare, conduct and safety of Transferees”.  I think they are the relevant provisions.  Centre security is at 4.3:

A Service Provider will be contracted to provide adequate security to ensure the safety –

and that is the Transfield contract, and there are provisions for media access to be the subject of agreement between the government and Nauru.  Then governance arrangements are set out at page 84, which gives rise to the concept of a joint endeavour. You have the joint ‑ ‑ ‑

FRENCH CJ:   You have passed over, I think, 4.2.1 – 4.2 “Duration of stay”.  So it is an accommodation for transferees at the centre.

MR MERKEL:   Yes, your Honour, they will accommodate transferees while their claims are recognised.  We will come to what that actually involves as a matter of fact as I dropped from the administrative level to the actual level of what happens in practice.

FRENCH CJ:   I understand.  At this level it is in terms of provision of accommodation.

MR MERKEL:   Yes, your Honour.  It is silent on detention.

FRENCH CJ:   Yes.

MR MERKEL:   Then you have got the working arrangements.  I mentioned the governance arrangements in clause 8 at page 84 of the joint committee and the joint working group and the terms of reference of those.  The joint committee’s terms of reference are at page 87, which is a joint Nauruan and Australian membership, as is the joint working group, at page 89.

So that is the framework at the highest level. Can I come now to the statutory regime?  Can I go first to the Immigration Regulations 2014?  There are a number of stages of these, but it seems to us that the relevant ones are the consolidated ones operative at the latest time during the plaintiff’s detention at the centre.  That is at page 492.  The relevant visa is at page 503 and that is what I will call the RPC visa.  Regulation 9(3) at page 504 says:

An application for a regional processing centre visa may only be made by an officer of the Commonwealth of Australia.

Then in subsection (4) the purposes are set out and essentially they are to enable a person to have a determination as to whether they are a refugee and in (c):

enabling a person whose recognition as a refugee has been cancelled –

sorry, (d) is:

enabling a person in respect of whom the Secretary has made a determination that he or she is recognised as a refugee to remain in Nauru pending the making of arrangements for his or her settlement in another country –

and regulation 9A over at 506 sets out the temporary settlement visa provision which a person would get who is recognised and that is for six months.  Then in sub‑regulation (5) the visa is for three months and then (5A) is:

a person who holds a regional processing centre visa . . . may be granted on the request of an officer of the Commonwealth of Australia –

an extension.  What happens in practise is the extension is granted but on a presumptive request by the Commonwealth and for each extension $3000 is payable.  Then regulation 9(6) is the one that your Honours have already been referred to:

the holder must reside in premises –

that is still extant but (b) and (c) have just been repealed on the weekend which restricts the circumstances in which a person may leave.  So, the effect of the repeal is that the visa condition to which the plaintiff would be subject were she to be returned as from Sunday would not contain conditions (b) and (c).  I should say back in February realised at a late point by the parties, the requirement in (b) and (c) that the holder must be accompanied by a service provider was removed in February but relevantly for our past case, the form of these regulations only permitted the plaintiff to leave in the circumstances set out in (b) and (c) which is the absence has to be organised and permitted by a service provider which is an Australian contractor, that is Transfield or Wilson:

and the holder is under the care and control of a service provider or of another person –

approved by the service provider.  So, when we get down to the nuts and bolts we start to see that the detention even during this period we are concerned with, was a detention, yes, under the law of Nauru but it was the service provider whose permission was required under the visa conditions and that service provider had to accompany the person.

FRENCH CJ:   Now, I think the definition of “service provider” in the regulations is taken from that in the Asylum Seekers (Regional Processing Centre) Act.

Was that the case, one would need to have a whole lot of things the Court does not have.  One would first need to have the relevant defendant, said to be, for instance, a tortfeasor or a wrongdoer.  One would need a joinder of issue on appropriate defences, and one would need appropriate claims for relief, and there would be a choice of law question as to which system of law would govern the conduct.  We would submit the law of Nauru would govern conduct.

That has never been the plaintiff’s case. The case is instead one about power. It is about whether the Commonwealth Executive has the power under the Constitution and legislation to do the things it is doing irrespective of whether those things produce lawful or unlawful consequences in Nauru.

Now, that is important for a number of reasons.  Firstly, in various places the plaintiff, in the written submissions and orally, slips into language of the Commonwealth behaving unlawfully.  That can only be understood as a claim to an excess of power, not as to an infringement of the lawful rights of the plaintiff.  But apart from mere language, it has some quite important significances for standing, for the Chapter III principles and for the application of section 198AHA.  So that is the first matter and I will come back to how that relates to other matters.

Now, your Honours, the second matter is paragraphs 10 to 14 of our submissions where, just before we get to the very heart of this case, we submit the Court should view it in a legal context which is entered earlier than simply Mr Merkel’s discussion about the Lim principle.  There are a number of markers which the Court has laid down which are not challenged.  The first is that the legislative power of the Commonwealth permits confer on the Executive of authority to detain at least onshore for the purposes of considering applications for refugee status.  That is established in Lim, confirmed in Al‑Kateb.

So that onshore detention of persons who arrive without permission for the purpose of processing refugee claims, is and remains accepted.  The second marker is that of the three arms of government, the arm of government that chooses to enter non‑binding obligations such as under an MOU, is the Executive.  Now, that relates back to a number of cases.  We have referenced them in footnote 3, including Justice Gummow in Re Ditfort (1988) 19 FCR 347 at 369 and earlier, amongst other judgments, Chief Justice Latham’s prescient judgment in Burgess; Ex parte Henry (1936) 55 CLR 608 at 643 to 4.

So there can be no attack by the plaintiff that the arm of government which determines whether to designate Nauru as a regional processing centre and enter an MOU is the Executive.  The third principle which we think is not trite, is that consistent with the principles of sovereign equality under international law, the entry of the MOU does not confer on the Commonwealth any entitlement to direct Nauru as to the content of its domestic laws, including whether there should be detention or not.

Now, your Honour Justice Kiefel asked Mr Merkel early this morning what is the relationship he is contending for between the Commonwealth and Nauru and is he, in effect, urging a finding or a characterisation of some form of principal agency relationship where the Commonwealth is in charge and Nauru is, as it were, a dependency, an external territory, a creature that does what the Commonwealth says.  Now, his answer to that was not pellucidly clear but, in effect, when he went on to provide his substantive argument, his answer was, yes, that is the finding he wants you to make; that this is, as he put it, the Commonwealth’s detention. 

Now, the only way one could rationalise that consistent with principles of international law is in effect a finding that as between Australia and Nauru they have become our dependency or our territory.  Now, that he does not put directly but it is the logic of his case.  The logic of his case is when you see provisions of Nauruan law requiring detention, you read that as Australia.  Australia has brought that about.  It is Australia’s will, Australia’s whim, he says.

Now, that finding that he seeks that, in effect, Nauru is not a sovereign equal with Australia, that it does not have the benefit of the provisions of Article 2, 1 and 7 of the Charter of the United Nations, we would ask you to reject.  The material in the stated case does not support such an extraordinary finding and he really has gone no distance towards establishing such an extraordinary finding.  So that is the third marker.

Then the fourth marker is this Court held in Plaintiff S156 - which has not been challenged directly, although indirectly there has been a little sideswipe at it, that the provisions of section 198AD and the like are valid and they require officers of the Commonwealth to take unauthorised maritime arrivals to a designated regional processing country.  That is why the plaintiff was required to be taken to Nauru and is now still required to be taken to Nauru.

Now, with those four markers, if we could ask your Honours to go to paragraph 14, we submit that the logic of the plaintiff’s case – the logic is that no arm of the Commonwealth of Australia, not the legislature, not the Executive, not the judiciary, has power to assist another country to process refugee claims where that process involves any element of detention, or one might say restraint on liberty, of persons who have been excluded by Australia.

That is Mr Merkel’s case.  That, although they can be detained onshore, although they can be taken to a designated regional country, the Commonwealth cannot be involved in any way in assisting the processing of their claims if that other country chooses as a sovereign country to engage in any form of detention, being the very thing that Australia itself does under the Migration Act and which many other countries do.  Now, that, we submit, is where they ask you to go.  That, we submit, goes well beyond anything which the Court has held or should hold under Chapter III and without getting ‑ ‑ ‑

FRENCH CJ:   Are they doing more than asserting that the Commonwealth cannot assist?  Are they putting it on the basis that on the facts in this case the Commonwealth can be characterised as a matter of fact as actually detaining the plaintiff and others in the past on Nauru?

MR GLEESON:   Well, to take up your Honour’s question, there may be two aspects to what they are putting.  Yes, they seek the finding of fact that this is not merely assistance; you should characterise this as something more.  It is a Commonwealth detention centre.  They ask for that finding and we have that type of issue.

But the effect of that is to say if there is any detention in the other country which can be attributed to the Commonwealth in that way, it is beyond power and so even, as it were, flying the person to the airport in Nauru or Manus Island and an appropriate Commonwealth official exercising restraint on the ground for the first minutes until the person is handed over to a local, that would be perhaps Commonwealth detention.  On the plaintiff’s case, that cannot happen.  There cannot be any detention attributable to the Commonwealth.

KIEFEL J:   Put at its simplest, is it not their case that under 198AD once a person is removed to a regional processing centre the Commonwealth no longer has powers for detention?

MR GLEESON:   It is, your Honour, and that perhaps in different, more rhetorical language, we had tried to capture as the Hobson’s choice in paragraph 76 of where they say the argument goes, that you can take persons there but the moment they arrive there you must, as it were, abandon them.  You must hands off, if that country has chosen to have any regime for detention, or you must abandon, which is what they want, you must abandon regional processing.

So in any circumstance where regional processing will call for detention by reason of the decisions of that other country, Australia must do nothing once they arrive, which seems to have the problem with it that the country may well say, well, we do not accept the persons in that situation, leading immediately to the second choice, which is regional processing is abandoned.

Now, it is not too much of a stretch really to tease out the logic of what Mr Merkel is wanting. The very thing the Refugees Convention does not give his client, which is a right to have the claim processed in Australia, is effectively what he seeks through the Constitution because one cannot imagine in terms of international relations that a country behaving responsibly could for terribly long simply abandon people in another country and say you process their claims. Clearly there has to be some form of co‑operation, which is why you have an MOU.

If that other country says our rules involve or include detention, then in some sense that has to be accommodated by the Commonwealth.  But what Mr Merkel wants is not really a Chapter III point.  He wants a constitutional right to have his client’s claims processed onshore unless Nauru removes all elements of detention.  In one sense, he has achieved his second aim because Nauru has now given him what he wants, which is why the case is finished for the future.

So, your Honours, the very stark significance of what Mr Merkel seeks is something we ask the Court not to disregard.  He asks you to look at substance, not form, and practical effect; we agree.  His case is he wants, through Chapter III, a constitutional dismantling of regional processing in any circumstance where the other country chooses detention while the claims are being processed; the very thing that can validly occur in Australia.

Now, that extended and unhelpful soliloquy was meant to be the first of my answers to your Honour the Chief Justice’s questions.  The second was, of course, coming back to it, that if on a correct characterisation of the facts you find, as the Commonwealth asks you to find, namely, this is a sovereign State implementing its laws and rules and Australia providing substantial assistance, particularly through funding, to enable the performance of the decisions of that sovereign State on its own soil, then that provides a very different characterisation of all the circumstances.

But as we would understand it - maybe we are wrong - Mr Merkel, even if you characterise this as assistance and not Australian detention centres, still wants to say there is an excess of power.  Perhaps he can clarify in reply whether, if the Court accepts our characterisation, his case is then extinguished.

Now, your Honours, that brings me to the extremely attractive point in paragraph 3 of our outline about standing, which relates to the claim about the past.  We have considered whether, in the light of the changed circumstances, there remains a basis to challenge the standing in respect to the past.  Our consideration is that we ought to retain that argument that the plaintiff lacks appropriate standing, so can I develop that argument now?  It comes back to the way the plaintiff’s case has been analysed in paragraph 10 of our written submissions.

The short submission we make is that for the Court to make a binding ruling upon whether the Commonwealth defendants lacked authority under Australian law to engage in the impugned conduct in the past has no relevant foreseeable consequence for the plaintiff.  That is where the submission needs to go.

If it travels that far, it then attracts the principles, amongst other cases, in Gardner v Dairy Industry Authority (1977) 18 ALR 55 - the familiar passages are at pages 61, 69 and 71 - that, of course, being the case where there was an excess of authority in respect to the milk scheme. It affected the claimant; however, the excess of authority no longer continued, and the Court considered in those circumstances there was no basis to grant any declaratory relief. It was a matter in State jurisdiction; applied by analogy in federal jurisdiction, there would be no matter and no standing.

This is what we say in support of that submission.  First, the mere fact that there is disagreement about the validity of things done in the past does not establish a justiciable controversy.  Second, because the plaintiff does not seek to establish that the Commonwealth’s conduct was tortious, there is no connection between a decision on excess of authority and the existence of any common law right, and the same is true for habeas.

Thirdly, and this comes back to your Honour Justice Nettle’s decision on the interlocutory basis on this matter, when the relevant Nauruan statutes I understand were not before the Court.  On the material now before the Court, there is nothing to show that the Nauruan statutes, or indeed law, were the plaintiff ever to invoke it, depends upon whether the Commonwealth has authority under Australian law.  So, there is no foreseeable consequence in that sense.

Fourthly, this case is not analogous to Plaintiff M61.  Your Honours are familiar with the passage at paragraph 103 of Plaintiff M61, where because the process which was infirm, had been adopted by the Minister in order to perform the statutory duties.  It was appropriate to grant a declaration about that infirmity because it could readily be connected to a correct performance of the statutory duty in the future.  No such connection exists in this case.

GAGELER J:   Mr Solicitor, is standing to be judged at the date of the commencement of the action or at the time of granting relief?

MR GLEESON:   Well, conventionally it would be the former.  It would be the former, the date of commencement of the action.  Has something ‑ ‑ ‑

GAGELER J:   You get quite a different answer, do you not?

MR GLEESON:   And you may get quite a different answer.

KIEFEL J:   Well, you are more concerned with the utility of the declaration.

MR GLEESON:   Yes, and everything I am putting is going to utility as well, because even in respect to the past, to decide and then grant orders about authority and power in the past, can only be done.  The only utility the plaintiff points to, which is quite transparent, is that might tell the Commonwealth what to do if in the future conditions in Nauru were to revert to those that were in the past.

Mr Kennett is trying to tell me that I have made another mistake, but I will come to that in a minute.  I think it is apparent in my answer where I was sliding between standing at the beginning and utility at the end that the proceeding might become moot in the middle. That could be ‑ ‑ ‑

FRENCH CJ:   It was a matter to start off with.

MR GLEESON:   A matter.

FRENCH CJ:   It is still a matter?

MR GLEESON: Well, there is no matter –there is a matter because we are arguing before your Honours about the Constitution, so there is still a matter.

FRENCH CJ:   The questions are entangled, are they not?

MR GLEESON:   The questions are entangled, but what I wish to say is that when we reiterated this point last week in the submissions that your Honour Justice Nettle ordered and the plaintiff was given a chance to say why should the Court be granting relief in respect to the past, the answer was simply, well, if in the future Nauru reverted to the past and if the Commonwealth were asking itself whether it should continue to be involved in the regional processing it would then know the answer to the question, namely, the answer is, according to them, you should not do it.

That was taken even further by Mr Merkel this morning when he tried to tender a separate set of proceedings in the Court and say it would be very good to answer these proceedings because then we will know the answer in the other proceedings.  Now, our short point is if that is what the plaintiff says is the purpose of it that offends In re Shipping and Navigation Act because that truly is hypothetical. That is saying it has no foreseeable consequence for the plaintiff now or that the plaintiff can point to but if something were to happen in the future then ‑ ‑ ‑

FRENCH CJ:   I think he was using it as a prop rather than a fallback position.

MR GLEESON:   A prop – a prop or fallback.  So, your Honours, that is why he asked you to decide the past so that the Commonwealth has a binding determination if these circumstances arise in the future. 

FRENCH CJ:   If there were no utility and declaratory relief there might be no utility in answering questions.  That is really the point, is it not?  That is not a matter that goes to jurisdiction, though.

MR GLEESON:   No.

GAGELER J:   Did you ask us earlier to draw an inference that the change in Nauruan law was associated with the commencement of these proceedings?

MR GLEESON:   I do not think I did that, your Honour.

GAGELER J:   Thank you.

MR GLEESON:   On the material before the Court, we know there is a change in the Nauruan rules.  We know when it occurred.  We know precious little more than that.  We do know it is a change which has a dramatic effect on the plaintiff’s legal rights.

Your Honours, at that point, I have covered inadequately down to paragraph 3.  Tomorrow, I want to start on paragraph 4 to make the two points, firstly, that what occurs in Nauru is by reason of the force of Nauruan law; secondly, that the Commonwealth in no relevant sense controls those arrangements, nor does its role in any way satisfy – perhaps I can conclude on this. 

The high point of the plaintiff’s case is the outline at paragraph 15 – that is what I need to address tomorrow morning.  Of that list of verbs, the only one that the Court could accept on the evidence is “funded”.  There is obviously a lot of money flowing, but everything else that is put in that paragraph, “authorised”, “procured”, et cetera, we would say is a false characterisation placed on the evidence.

FRENCH CJ:   Thank you, Mr Solicitor.  The Court will adjourn until 10.15 tomorrow morning.

AT 4.13 PM THE MATTER WAS ADJOURNED
UNTIL THURSDAY, 8 OCTOBER 2015