Precision Data Holdings Ltd & Ors v Wills

[1991] HCATrans 271

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No M37 of 1991

B e t w e e n -

PRECISION DATA HOLDINGS LTD,
DABBY PTY LTD, TITAN HILLS

AUSTRALIA LTD, GODFREY CULLEN,

MAXWELL LATIMER and GARRY GRACO

Plaintiffs

and

DEAN WILLS, ROSS ADLER, PETER

JOOSTE (in their capacity as

Members of the Corporations and

Securities Panel), THE

COMMONWEALTH OF AUSTRALIA, THE

AUSTRALIAN SECURITIES
COMMISSION and THE STATE OF

VICTORIA

Defendants

Case Stated pursuant to

section 18 of the Judiciary

Act 1903

MASON CJ
BRENNAN J

Precision 75 26/9/91

DEANE J
DAWSON J
TOOHEY J
GAUDRON J

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 26 SEPTEMBER 1991, AT 10.17 AM

(Continued from 25/9/91)

Copyright in the High Court of Australia

MASON CJ: Yes, Mr Solicitor.

MR GRIFFITH:  Your Honours, in our submission

Spratt v Hermes stands for two relevant

propositions. The first is that the source of

power to make laws for the government to the

Australian Capital Territory in section 122 is unqualified by section 52(i) and secondly, the legislative power conferred by section 122 enables

judicial power to be conferred on bodies created

independently of section 71 and section 72 of the
Constitution. It is our submission the decision
has stood for 25 years, bearing in mind its history

before then dating back, as Your Honour the

Chief Justice referred to yesterday, to Bernasconi

in 1915, and we submit to the Court that each of

the four matters referred to in John v The

Federal Commissioner of Taxation, 166 CLR 439-440,

militate against departure from these lines of
decisions. It was an unanimous decision of six
Justices of the Court and the decision of Spratt v

Hermes was reaffirmed by the unanimous decision of

seven Justices in the Capital TV and Appliances Pty

Ltd v Falconer case.

Its correctness has been repeatedly acted upon by Parliament and the legislatures for the

Territories established by the Parliament. In

particular, the whole system of inferior courts in

the Australian Capital Territory and other

Territories is built upon this proposition.	We
submit it does not produce a result which is
manifestly inconvenient or unjust.	The result is

to place the government of the Territories in much

the same position as the government of the States.

Spratt v Hermes was just an affirmation of a

consistent line of authority. The main authorities

were collected by His Honour Justice Gibbs in

Falconer at page 625 when he describes the

His Honour in essence is stating is that it is far principles as "well settled". We submit that what	too late in the day now for these authorities to be
reconsidered. His Honour the Chief Justice in Falconer, in reference to his judgment in Spratt v
Hermes said at page 598:

I then came to the conclusion after a close

examination of the decisions that, whatever I

might myself have thought if the slate were

clean, the doctrine of the duality of the

judicial power was so deeply entrenched that

it ought not now to be overturned.

There are numerous similar references in Spratt v

Hermes. Justice Kitto at page 257 said:

Precision 76 26/9/91

Bernasconi ..... has stood so long and been

acted upon by the Parliament so often that I

cannot doubt we will best perform our proper

service by accepting it as established law.

Indeed, in view of its history in this Court

and in the Privy Council, a departure from it

is a course which in my opinion the Court

should not contemplate.

Similarly, Justice Taylor at pages 260 to 261

expressed a view to similar effect, and

Justice Menzies at page 265 and Justice Windeyer at

page 275. I will not read those extracts to the

Court, but merely refer to them.

Whatever differences of emphasis may have

existed between the individual Justices as to the

scope and continuing vitality of the holding in

Bernasconi, we submit that the call of the

principle enunciated in Spratt v Hermes is clear.

It is that judicial power conferred under

section 122 is not a judicial power of the

Commonwealth in the meaning of section 71. It is

only this call with which we are now concerned.

The same approach, as indicated by Spratt

v Hermes, has consistently been taken in the

United States in relation to territorial courts since 1828. May I give the Court references to

American Insurance Company v Carter, (1828)

26 US 511, and as has been held in Pallmore v

United States, (1973) 411 US 389, the same approach

applies to courts created for the District of

Columbia.

My learned friend, Mr Jackson, yesterday gave

the Court perhaps a judicial glimpse of what his

argument would be if leave were granted to reargue

Spratt v Hermes. In our submission, for the

reasons stated, Spratt v Hermes should not be

reopened. However, if the Court were minded to

reopen Spratt v Hermes may. I give the Court a brief

summary of what our position would be to affirm

that Spratt v Hermes itself was correctly decided,

but otherwise indicate to the Court that we would

desire then an opportunity, were the Court minded

to grant leave, to appear before the Court and

argue the issue of whether or not it was correctly

decided or should be overruled. We were not clear

from my learned friend's submissions as to whether

or not he had exhausted his argument on that point

but we infer that he had not. He really indicated

the line of argument.

I could take the Court through this summary

but I think perhaps it sufficiently stands on its

terms.

Precision 77 26/9/91

MASON CJ:  I think we can read it, Mr Solicitor.

MR GRIFFITH:  Yes. Thank you, Your Honour, for that

indication.

MR GRIFFITH:	Thank you, Your Honour, for that indication.
MASON CJ:	I think you can take it, Mr Solicitor, that our

understanding was that Mr Jackson put to the Court

what he wanted to put in support of the submission

that Spratt v Hermes and Capital TV - - -

MR GRIFFITH: Well, Your Honour, we were not clear because,

of course, the Court did not rule on the issue of

whether or not leave should be granted to reopen,

so that it is - - -

MASON CJ: Well, he did not actually apply for leave in

those terms.

MR GRIFFITH:  No, but he knew that he should have,

Your Honour, and we are regarding it as -

MASON CJ: Well, I am not sure about that. I mean, the

application for leave is rather a machinery

provision, and there are cases where the Court
considers arguments by way of distinction in terms

of a past authority and overruling, where it is not

really possible to segregate the two. This is not

such a case.

MR GRIFFITH:  Of course, Your Honour, we never stand on form

in these issues and we are quite happy to go along

with that. We were not quite clear exactly how my

learned friend was putting it, but, Your

Honour - - -

MASON CJ:  I think it is clear now that he has put the

totality of his argument.

MR GRIFFITH: In that case, Your Honour, we submit that for

the reasons stated in this document we have just

handed the Court, Your Honour, if Spratt v Hermes

were to be reopened, it should be reaffirmed,

rather than overruled, and the propositions we make

which Your Honours indicated, I need not take the

Court through, are our fall-back position in the

event that the Court does not accept the argument

just put, that we hereby submitted that Spratt v

Hermes and what it stood for on this narrower

point, should not be reopened. These are matters

that have already been touched upon, but we draw

them together in this summary, Your Honour, and do

rely upon them.

Your Honour, we submit, for the same reasons

that there can be no objection to the capacity of

Precision 78 26/9/91

the Panel to exercise territorial judicial power;

there can be no objection to the capacity of the

Panel to exercise State judicial power. If there

is no obligation under Chapter III on the Panel,

arising from section 122 of the Constitution

exercising territorial judicial power, we would

submit there could be no great objection to it

exercising State judicial power for the principles

should be the same.

Our last substantial contention is that we

submit that in any event there is no express or

implied constitutional limitation on the power of

the Commonwealth Parliament to permit the States to

invest Commonwealth administrative bodies with

State judicial power. There may be an issue of the

powers of the States to divest jurisdiction of

supreme courts within the terms of their own

constitutions, but we submit that is another

matter; it is not one which we see as being engaged

by the argument of my learned friend. So that it

is not, we would submit, a matter before the Court

to determine in this case and, of course, as to
that issue, I would leave it for my learned

friends, the various Solicitors-General, to deal

with the issues arising under their own

Constitution.

But absent a consideration arising from those

parts of various State constitutions, in our

submission, Reg v Lydon, (1959-60) 103 CLR 15,

dealt with an argument there put that there was an

intent by the Commonwealth and State legislation to

confer judicial power on the Coal Industry
Tribunal, another example of a tribunal set up
pursuant to a legislative scheme involving the

States and the Commonwealth.

As to that argument, at 103 CLR 22, the Court

said:

We think that this contention is not well

founded and indeed appears to rest on a

misconception. Neither under the Federal

s. 38 nor under the States. 44 is there any

attempt to give a judicial power. So far as

the State legislation is concerned it would

not matter were there such an attempt.

Section 71 of the Constitution, of course, only

says that the judicial power of the Commonwealth

must be vested in a Chapter III court. It says

nothing about the judicial power of the States.

And the conferral of State judicial power on

Commonwealth administrative bodies, in our

submission, would not necessarily infringe any

principle of federalism. The integrity of federal

Precision 79 26/9/91

judicature would not be impaired in any way,

although, of course, the concept of State judicial

power must, in one aspect, include matters arising

under the Constitution under Commonwealth law, so

that conferral of judicial power in respect of that

narrow range of matters on non-Chapter III

Commonwealth bodies would undermine, as we see it,

the whole purpose of Chapter III. Once more, that

is a situation, we submit, that does not arise

here.

We submit that the conferral of State judicial

power in Commonwealth administrative bodies does

not adversely affect, in any way, the liberty of

the subject. Such due process as may be the result

of the formal separation of judicial powers at the

federal level is not now entrenched under State

constitutions and, we submit, is made no better nor

no worse by the recipients of power being

Commonwealth bodies.

For those reasons, Your Honour, we submit that

the Court should answer the question in the
opposite than the manner contended by my learned

friend, Mr Jackson. If the Court pleases.

MASON CJ: Thank you, Mr Solicitor. Mr Colbran?

MR COLBRAN: If Your Honours please, as I indicated

yesterday on behalf of the Commission, I adopt the

submissions of the Commonwealth and have nothing to

add unless there is anything the Court wishes to

put to me.

MASON CJ:  Thank you. Mr Solicitor for Victoria. We have

had the advantage of your outline of submissions,

Mr Solicitor.

MR BERKELEY:  It has been added to, Your Honour, not by much

but I will - - -

MASON CJ:  I was going to congratulate you on the brevity

and succinctness of it.

MR BERKELEY:  Thank you, Your Honour, I will enjoy that

before I hand this up.

MASON CJ: It looks as if you failed to hand in originally

the second two pages of the submissions?

MR BERKELEY:  Yes, Your Honour. We gratefully adopt what

was said by the Commonwealth in relation to the

question of whether or not the Panel is exercising

judicial power, but what we want to say something

about is whether the legislation being considered

by the Court is a law for the government of the

Territory. What we have here is a company which is

Precision 80 26/9/91

incorporated in the State of Victoria which is

taking over another company incorporated in the

State of Victoria, and it is all taking place in

Victoria, and a body established - the Securities

Panel of the Australian Capital Territory is given

authority to investigate those transactions.

Now, it is possible that if that question came

before this Court 50 years ago the Court would have

said that is not a law for the government of the

Territory. But the workings of the federal system

develop over the years, and the way that the

federal system works today is not the same as it

was in 1900 and the Constitution has to be applied

to the federal system as it operates from time to
time, and what we have seen develop in the last

federalism, and what we mean by that is that there are questions which arise in the working of the	50 years is what is known as cooperative national importance which require national answers,
and the Commonwealth does not have power to deal with them or the Commonwealth does not have
adequate power to deal with them. And an answer
has been sought by means of either the uniform
State legislation or uniform Commonwealth State legislation or legislation which is uniform between
some States and the Commonwealth.

One of the documents I have annexed to this

outline is called schedule 1, and I do not pretend

it is exhaustive, but going through the index to

the Victorian statutes we have picked out, as far

as we could recognize them briefly, Victorian Acts

which are either cooperative ventures between

Victoria and other States or between the States and

the Commonwealth, and the Court will see that over

a number of years they cover a large variety of
subject-matters. For instance, there is the

question of the labelling of products - food

products or dangerous goods. It is of interest to

the national economy that if a manufacturer

manufactures goods to be distributed all over

Australia he should not have to change the labels seven different times, it is wasteful.

So it is for the benefit of Australia and

therefore for the benefit of a part of Australia,

if some machine can be set up to prevent that type

of waste and to enable the efficient distribution

of those products throughout Australia without

changing labels. In the same way the Corporations

Legislation. There are companies incorporated in the Australian Capital Territory and it is for the

benefit of those companies and therefore of

interest to the Territory that when there are

incorporated they only have to be registered once.

Precision 81 26/9/91

That operates right throughout Australia to the

benefit of those companies and when they file
annual returns and do other things in the statutory
- they discharge their statutory obligations in the

management of the company, they only have to

discharge them once in Canberra, and that has

effect throughout Australia, and when the companies

wind up, it is of benefit to the creditors and to

the Territory that there is only.one winding up;

there is only one body of assets. Wherever those

assets are in Australia they are administered by

the liquidator appointed by the Supreme Court of

the Territory and there is one body of creditors.

Now, one can see that is a benefit to the

Territory and of interest to the Territory and the

law which enables that to be done is a law for the

government of the Territory, but the fact that it

is a co-operative scheme means that not only that

the scheme has benefits for the Territory, but it

imposes obligations and one of those obligations is

that the Companies and Securities Panel of the

Australian Capital Territory shall be one of the

bodies administering the scheme. There is a

national scheme; it has to be administered by
somebody and obviously this type of scheme has to

be administered by one particular body, not eight

bodies for the six States and the two Territories.

DEANE J:  Mr Solicitor, you are referring to the

Corporations and Securities Panel of the Australian

Capital Territory.

MR BERKELEY: Yes, Your Honour.

DEANE J: Is that an argumentative description, or is there

something in the legislation which makes it clear

that the section 174 panel is an instrumentality of

the Australian Capital Territory.

MR BERKELEY: Yes, I will come to that, Your Honour. It

begs the question, but I have to put the argument

in some sort of order and I chose to put that

later.

DEANE J:  I see, right.

MR BERKELEY:  So that it could have been the panel of Victoria or New South Wales. What is proposed at

the moment is there shall be uniform legislation

for none bank financial institutions and the

proposal in that case is that Queensland shall be

the home State. In this case, the choice was that

the obligation would fall on the Commonwealth and

one can see the historical reasons for that in the

history of the legislation and that the

Commonwealth should discharge that obligation by

Precision 82 26/9/91

passing an Act of Parliament which put the

obligation or allowed the obligation to be placed

upon the Australian Capital Territory Panel.

BRENNAN J: That assumes that the Commonwealth's capacity to

contribute to a co-operative scheme is limited to

the powers which it may have under section 122.

MR BERKELEY:  I will come to that too, Your Honour, but it

is not necessarily so. I accept what Your Honour

says, but if I might anticipate my argument for

this and would like to come back to it later.	It
may certainly come under section Sl(i), but the
assumption which is the basis of what we are
putting is that the power which the Panel is
exercising is judicial power, otherwise this

argument has no relevance. So we are assuming that

it is judicial power, and the question then is: Is

it federal judicial power or is it Territory

judicial power?

Now, a lot of this legislation may well be

under section 51, but what we will be saying is

that judicial power cannot be vested or conferred

under section 51. It just does not happen. Either

it is federal judicial power which is vested under

section 77, or it is Territory judicial power which

is vested under section 122.

Now, counsel for the plaintiffs put the

dichotomy saying it is either section 51 or

section 122. Section 51 creates the substantive
rights and obligations, but the creation of the

tribunal and the vesting of the jurisdiction either

comes under section 77 or it comes under

section 122, and Spratt v Hermes is the clearest

authority for that.

So I gladly accept what Your Honour says. instance, when the Trade Practices Act says the	For
part of the Trade Practices Act, the source of that	Federal Court has jurisdiction under this Act, that
power is section 77 of the Constitution, although the source of the whole of the rest of the Act may
be section 51.

What I have done in schedule 2 of this

document is: Part A sets out the more important

provisions which show - and they have already been

referred to - that this legislation purports to be

legislation for the administration of the

government of the Australian Capital Territory,

that is, Parliament says in so many words:	We
intend the source of this legislation to be section 122. I understand that that is not

conclusive as far as this Court is concerned, but

if it is possible to rely upon section 122, and if

Precision 83 26/9/91

not relying on section 122 would mean the

legislation is void, then obviously the expressed

intentions of the Parliament will have some

relevance in the construction of the Act. Part B
of schedule 2, refers to the more important

provisions which show the national co-operative

nature of the legislation and that it has

advantages for the Australian Capital Territory.

So the question is, and what Your Honour

Justice Deane put to me is: is this the Panel of

the Australian Capital Territory? And as far as

judicial power goes, the question is - and we would

put it in these terms - is this an organ of the

government of the ACT, that is, is it established

to discharge Commonwealth functions or Territory

functions?

Now, under this legislation - first of all, it

is established under the Australian Securities

Commission Act. The Act 110 of 1990 says the

purpose of it is to confer that legislation from

Commonwealth legislation under section 51 to

Territory legislation under section 122. There are
companies which are incorporated - there is a

regime of law in relation to companies in the

Australian Capital Territory which is, in our

submission, undoubtedly Territory legislation.

That is companies are incorporated as Territory

companies and, in relation to those Territory
companies, the Commission has a function and the

Panel also has a function and, in our submission,

that is a Territory function. That is, the power

which the Panel exercises in relation to companies
incorporated in the Territories, it exercises as an

organ of the government of the Australian Capital

Territory.

Now, if one puts on one side the functions

which it may exercise under State legislation, it

national function. There are no companies which	has no other function to perform. It has got no	are incorporated under a national or federal Act, and so, in our submission, the only function which the Panel has, apart from its State function, is a
Territory function.
Yesterday, Your Honour Justice Deane asked the question whether, under section 122, judicial power
could be vested in a non-judicial body. May I say,
with respect to Your Honour, that that question does not make sense in that context. That is to say, if a State or Territory vest judicial power in
a body, that vesting makes it a judicial body. It
may not be a court in the sense contemplated by
sections 72 and 71.

Precision 84 26/9/91

In relation to federal jurisdiction, the question of course is pertinent, because in

relation to federal jurisdiction, judicial power

must be vested in a judicial body which, in that

context, is shorthand for a court of the kind

described in section 72. But the question - - -

DEANE J: Is that right, though? I mean, if jurisdiction to

decide and punish criminal guilt was vested in an

individual who was empowered to decide according to

his own prejudices, you would have a vesting of

what lay at the heart of judicial power in what was

plainly not a court.

MR BERKELEY:  Your Honour, there would be a real question as

to whether that was judicial power. If you make a

man a dictator and give him an arbitrary despotic

power, that does not make him a judge.

DEANE J: It does not make him a court, but if you have the

power to determine innocence or guilt of a criminal
offence and to impose punishment for it, under our

Constitution that is indelibly and exclusively

judicial power.

MR BERKELEY:  Your Honour, the proposition as Your Honour

put it the second time was not the proposition as

Your Honour put it the first time, because the

first time Your Honour put it to me you said,

"According to his individual prejudices".

DEANE J: Yes, well, keep that. What I was putting to

you - - -

MR BERKELEY: Well, if it according to his individual

prejudices, we would say it is not judicial power.

If it is according to the standard lay down in the

legislation - - -

DEANE J: What, for the purposes of the Constitution, to say

X may decide criminal guilt or innocence and impose

a punishment according to his prejudices, is not

within the constitutional concept of judicial

power?

MR BERKELEY: There is a paradox in what Your Honour is

saying, because - - -

DEANE J:  I thought there was a deep constitutional truth in

what I was saying.

MR BERKELEY: Well, I hope not, Your Honour, because

otherwise I will not sleep soundly tonight. To

punish people according to individual prejudices is

not judicial power. To decide criminal guilt or

innocence is to do it without regard to your

individual prejudices. You cannot have it both

Precision 85 26/9/91

ways. To say, to decide criminal guilt or

innocence according to your own prejudices is a
complete paradox, because it cannot be done.

Criminal guilt or innocence means looking at the

facts and the law and deciding whether one matches

up with the other, and that can only be done by

putting the prejudices aside. So that to give

somebody power to punish another person or to

impose some detriment on him, that may not be

judicial power - - -

McHUGH J:  I though in Polyukovich, a number of us said that

it was. That if you punish somebody or take away

their property by some legislative act, it is an

exercise of judicial power. It does not matter

what the criterion is.

MR BERKELEY: Well, that has to be highly qualified.

McHUGH J:  The criterion might be your opinion or your

prejudices or some objective criteria, but it is

still an exercise of judicial power, is it not?

MR BERKELEY:  They would have to be highly qualified,

because, for instance - it happens in the public

service all the time, according to public service

regulations, and this Court has said that it is not

judicial power.

McHUGH J:  We said it was not a court, did we not?

MR BERKELEY:  The Public Service Board? I mean the power to

punish public servants can be vested in the Public

Service Board, because it is an exercise of

disciplinary power, not of judicial power.

McHUGH J: Yes.

MR BERKELEY:  But there is punishment there, and it may be

that the board has to act in a judicial way, but it

is not judicial power.

MCHUGH J:	I accept that.
MR BERKELEY:	But if you give somebody a power to punish a

third person, and he does not have to behave in a

judicial way - perhaps we are just arguing about

words, but our submission would be that that is not

judicial power.

BRENNAN J:  Mr Solicitor, if there were judicial power

vested in a Territory court, under a Territory law,

does an appeal lie to this Court under section 73

of the Constitution?

MR BERKELEY:  Under Tenancy Law - I will just have a look at

it, Your Honour. My instant reaction is no.

Precision 86 26/9/91

BRENNAN J: If your answer given off the cuff there is

right, it means that this body, if it were

exercising judicial power, could be insulated from

all judicial review.

MR BERKELEY: That is not so, Your Honour, because they

would still be officers of the Commonwealth.

BRENNAN J:  Would they?

MR BERKELEY: Well, Waters v The Commonwealth, that is the

decision of Mr Justice Fullagar at first instance, where an injunction was sought against somebody in the Northern Territory, His Honour there said that

this Court could not exercise its jurisdiction

under section 75, that is prohibition, mandamus,

injunction.

In Spratt v Hermes the Chief Justice said that

case was wrong and should be overruled. In my

recollection three of the other Judges did not go

so far but they severely criticized it, and two of

the Judges did not find it necessary to go as far

as that. But if Your Honour looks at what

Sir Garfield Barwick said about Waters v

The Commonwealth we would suggest, with respect,

that it is a pretty compelling argument.

I am indebted to my learned friend, the

Solicitor for Western Australia. Mr Jackson said

it did not come from Greece, so it is safe enough

to look at this gift. I was handed Capital TV and

Appliances Pty Ltd v Falconer, the headnote to

which reads:

The Supreme Court of the Australian

Capital Territory is not a federal court or a court exercising federal jurisdiction within the meaning of s.73 of the Constitution.

Accordingly no appeal lies as of right from

that Court to the High Court of Australia.

right, that there was no appeal to this Court,
there would still be the control, if I am right

But if the point that Your Honour made was

about the - they are Commonwealth officers. The

fact that they are appointed by - I mean, the judge

of the Supreme Court of the Australian Capital

Territory is appointed by the Governor-General. If

I remember correctly the members of the Panel are

appointed by the Governor-General. That does not

mean to say they are not appointed as organs of the

government of the Territory but it is some

indication that they are Commonwealth officers.

They are appointed under law made by the

Commonwealth Parliament, and this Court would have

Precision 87 26/9/91

the control of prohibition mandamus injunction at

least that much.

An appeal is a statutory thing. There are

many courts from which there is not an appeal to

it; well, there are intermediate appeals. But

there is judicial control in the section 75 sense.

I think that is all we want to say, except about the reopening of Spratt v Hermes. In that,

we would also adopt what was said on behalf of the

Commonwealth. If the court pleases.

MASON CJ:	Thank you, Mr Solicitor.
MASON CJ:	Thank you, Mr Solicitor.  Mr Solicitor for

Western Australia.

MR PARKER:	The Court has our outline, I believe.
MASON CJ: Yes, we have that.	I do not want to discourage

you, Mr Solicitor, but reading through your outline

it is, I think, to a substantial extent repetitive

of submissions already presented to the Court.

MR PARKER:  I am conscious of that, if it please the Court,

and I will be not following it exhaustively or

completely in what I have to say.

In taking up the first submission, if it

please the Court, Your Honours will see that it

seeks to set out what we submit are significant

characteristics of the Panel and its jurisdiction

and, by reference principally to the Reg v Trade

Practices Tribunal, we have sought to indicate the matters which, in our submission, indicate that

there is not, in the jurisdiction conferred upon
this Panel, the attributes which go to make

judicial power.

Rather than traverse those, could I develop

that submission a little by reminding Your Honours

of some of the legislative provisions that perhaps

have not been dwelt upon enough or have not been

adverted to and, in so doing, to make some

observations on some of the submissions of my

learned friend, Mr Jackson, about their proper

construction.

Turning first to the Corporations Law, which

was in volume 1 of the volumes Your Honours are

using, and at about page 20,553-4, the question of
the interrelationship of section 733(3)(b) with

section 731 was the subject of some submissions by

my learned friend.

Precision 88 26/9/91

In our respectful submission, turning to

section 733(3)(b), the Panel is required to have regard to the matters referred to in section 731 and any other matters the Panel considers relevant.

This, in our submission, should be read as

referring in its first passage to all section 731

matters and the words "and any other matters the
Panel considers relevant" to be in no way limited

or confined within section 731, which we understood

to be the force of my learned friend's submission

about it. In our submission the words are clear

that the Panel is free to go to matters entirely
outside section 731, subject only to whatever
limits come from the general scope of the Act. It

may take into account any other matters which the

Panel considers relevant, in that it is left to its

expert judgment and discretion and, in our

submission, that tends to emphasize that what the

Panel is exercising is an administrative and/or

legislative, rather than judicial, function.

And then, of course, section 733(3)(b) goes on

to fix, as the ultimate issue, the public interest.

In the context of the Corporations Law, in our submission, the essence of that ultimate issue,

public interest, the freedom to have regard to
unspecified criteria by an expertly constituted
panel, leads to the conclusion that questions of

policy may be determinative of the inquiry

undertaken by the Panel. That, in our submission,

is really fatal to a conclusion that it is judicial

power that is being exercised and in this respect may I refer the Court, or remind the Court of the

passage in Davison, 90 CLR 353, and particularly at
pages 366-7, which was adverted to yesterday,

commencing towards the bottom of the page, the

fresh paragraph:

Many attempts have been made to define

judicial power, but it has never been found

possible to frame a definition that is at once

exclusive and exhaustive.

After reference to Privy Council decisions and

Huddart Parker and especially the judgment of

Chief Justice Griffith in Haddart Parker, approved

by the Privy Council in the Shell Company decision,

it continues:

Nor do they doubt, as was pointed out in the

latter case, that there are many positive
features which are essential to the existence
of judicial power, yet by themselves are not
conclusive of it, or that any combination of

such features will fail to establish a

judicial power if, as is a common

Precision 89 26/9/91

characteristic of so-called administrative

tribunals, the ultimate decision may be

determined not merely by the application of

legal principles to ascertained facts but by

considerations of policy also".

In addition, my learned friend, Dr Griffith, has

given Your Honours the reference to Hegarty,

147 CLR 617, particularly at page 627.

And, of course, it is the effect of

section 733(3)(b) and the reference to public

interest, that even if the Panel formed a view that

conduct was unacceptable, the Panel may

nevertheless not make a declaration, if it felt it

was not in the public interest to do so.

Section 734(7) on page 20,603, is a provision

which, in our submission, is inconsistent with the

notion of the judicial process and judicial power.

It provides:

The Panel shall not make an order under this

section if it is satisfied that the order

would unfairly prejudice any person.

Now, the reference to ''any person" is, of course,

necessarily wider than those involved in the

conduct under examination. It is necessarily wider

than those who, in a judicial process, would be the

parties. In our submission, this is strongly

indicative of the administrative or legislative

nature of the power of the Panel to intervene in

the conduct of others.

Now, matters of administrative or legislative

nature and policy, unrestricted by express terms of
the Act, also intrude themselves by virtue of

sections 728 and 730. Section 728(1) provides

that:

The Commission may, on application by the

person or persons concerned or by a person or
persons included in the class or classes of

persons concerned, by writing, exempt a

specified person or persons, or a specified

class or classes of persons, subject to such

conditions (if any) as are specified in the
exemption, from compliance, either generally

or in a particular case or classes of cases,

with this Chapter or a specified provision or

provisions of this Chapter.

That, of course, enables the Commission, an

administrative body, to order any person to be

exempted, partly or wholly, from the provisions

Precision 90 26/9/91

which govern the operation and jurisdiction of the

Panel. Section 730(1) provides:

The Commission may on application by the

person or persons concerned or by a person or

persons included in the class ..... declare, in

writing, that this Chapter shall apply in

relation to a specified person or persons, or

a specified class or classes of persons,

either generally or in a particular case or

classes of cases, as if a specified provision

or provisions of this Chapter were omitted or

were modified or varied in a specified manner,

and, when such a declaration is made, this

Chapter applies accordingly.

That, of course, means that the Commission can

alter in a particular case even, the criteria the

Panel must apply in any particular case. These

provisions, with respect, in our submission,

indicate that the Panel is operating within a legal
framework, that is, administrative rather than

judicial, when such rules as there are applicable

to the Panel are able to be varied on a

case-by-case basis by an administrative body.

That also, of course, tends strongly against

any contention that the Panel is passing on the

legality of conduct or upon existing obligations or

upon antecedent rights, because by the Commission's

action under those two provisions, the rules can

simply be changed. In summary of an oversight of

the interrelationship between the Commission and
the Panel, the Commission, clearly an

administrative body, firstly is the only body which

can excite the Panel's jurisdiction so that it is

purely at the behest of the regulator that the

jurisdiction can be invoked at all. The

administrative body, the regulator, can exempt

persons partly or wholly from the Panel's

jurisdiction, can alter the criteria to be applied

by the Panel in a particular case, and the

regulator, the administrative body, is the only

body which may move to enforce an order made by the

Panel. The Panel, in our submission, can fairly be

seen in this legislative scheme to be in aid of the

Commission's administration of the Act.

Could I just briefly mention the reliance of

my learned friend, Mr Jackson, on section 1(2)(g)

of the Australian Securities Commission law which,

as Your Honours will recall, gave the Commission an

express obligation to enforce and to give effect to

national scheme laws. In our submission, that does

little, if anything, more than would be implied in

any statutory scheme which established a regulatory

body. It would not displace, in our submission,

Precision 91 26/9/91

the relevance of policy and discretion from the
course of the Commission's administration in

deciding whether to invoke the Panel's jurisdiction

or to seek to enforce orders. And, of course, in

any of this the Commission is always acting in the

role of a regulatory body. It is never acting in a

personal capacity, as it were, as a party affected

by conduct. So it is always the interests of the

regulator that are being brought.to the Panel.

If I could turn now, if it please the Court,

to our second and third submissions. The question

is, in our submission, what is the power being

exercised by the Panel, and our submission really

starts with section 174 of the ASC law which, in

our submission, could hardly be more clear that it

is not investing any jurisdiction. If I could

remind Your Honours of its few words:

The Panel has the functions and powers

conferred on it by or under a national scheme

law of this or any other jurisdiction.

In our respectful submission, if one stopped there

the Panel has no power or function. It is only

when a national scheme law confers jurisdiction,

and in this particular case in the particular

circumstances of our case, sections 733 and 734 of
the Victorian Corporations Law, it is only then
that the Panel has and is in a position to exercise

the powers and functions so conferred.

We would submit, that the distinction is

between enabling the Panel to receive and to be

able to exercise jurisdiction, jurisdiction which

is to be conferred later and separately, that is,

the capacity of the Panel and the actual conferral
of power and functions and, we would submit,
section 124 of the ASC law deals with the first of
those, the capacity of the Panel, and sections 733

and 734 of the various laws deals with the second,

that is, the actual conferral.

When the Panel acts in a solely Victorian matter the only power and functions that it

exercises, in our respectful submission, are those

directly conferred on it by the Victorian Act or

Law. Its powers are Victorian, not Commonwealth.

Now, this matter of capacity, as distinct from

the source of the actual power, seems to have been

recognized in the cases which we have cited in our

submission 2.	I need not really ask Your Honours
to turn to them.

BRENNAN J:  Which cases are they?

Precision	92	26/9/91
MR PARKER:	I am sorry, Your Honour.	The two BHP v National

Company and Securities Commission cases, the

decision of the Court in 160 CLR and the decision
of Justice Dawson in 61 ALJR, in that in each of
those the reference is specifically to the
capacity, taking the decision of Justice Dawson, at

page 126 of 61 ALJR, His Honour said - and I am reading between F and G of the left-hand column on 126:

It is, I think, clear that it is intended that the capacity of the Commission to exercise its powers or perform its functions, whether they

be conferred by Commonwealth law or be

conferred or expressed to be conferred by

State law, is derived from the Commonwealth

Act.

We would, in our respectful submission, entirely

concur that the capacity of the Panels in this case

Australian Securities Commission
derives from the of that capacity it exercises, in our submission, derives directly from the Victorian Act to which we

have referred. Your Honours will appreciate that

the sentence or two that follows, concerning

whether the Commission in that setting is:

representing the Crown in right of the

Commonwealth -

or not, is an issue that arises specifically from

the provisions of the statute then in question,

which provided that when Commonwealth power was

being exercised the Commission was representing the

Crown in right of the Commonwealth, and when State power was being exercised, representing the Crown

in right of the State. So those issues were alive

in that case because of the statutory framework.

There are not like provisions in the present

legislation.

The reasons of the five Justices who dealt

with the point at 160 CLR in the other BHP v

National Companies and Securities Commission - and

I am reading from page 505 of the report - is

tracking very much the same ground as

Justice Dawson in the earlier report and in the

first paragraph on page 505:

The Commission has, under s. 6(1) of the

N.C.S.C. Act, such functions powers as are conferred upon it by any Act that is a law of the kind referred to ..... Section 122 refers to

laws for the government of Commonwealth

territories. Under s. 6(2) ..... the Commission

is to perform any functions and may exercise

Precision 26/9/91

any powers that are conferred or expressed to

be conferred upon it by any State Act. A

distinction is thus drawn between functions

and powers conferred upon the Commission by

the N.c.s.c. Act and those conferred or

expressed to be conferred by a State Act,

although it would seem that in each case the

capacity to perform the functions and exercise

the powers is derived from the N.c.s.c. Act.

BRENNAN J: What, in your submission, is the Commonwealth

power which supports the law for the creation of a

body having a capacity to exercise a power

conferred by Victorian law?

MR PARKER:  I intend, in a few moments, if it please

Your Honour, to deal specifically with that.	Would
it trouble Your Honour if I delayed until then?

BRENNAN J:	No, of course not.
MR PARKER:	Thank you, Your Honour.  The only other

reference that we would take Your Honours to on

this point is Re Cram, 163 CLR, particularly at

page 131.

MASON CJ: There is no need to read that.

MR PARKER: If it please Your Honour. Simply to make the

point that there there is again recognized the

passage:

even if the power being or purportedly being

exercised is identifiable as power conferred

by the State Act.

So that, in our submission, there is recognized in

those decisions that there is a distinction between
the capacity of the body exercising the power and
the source of the power which it may be exercising.

It is the scheme of the Acts here under

consideration, in our submission, that in normal

circumstances it will not be necessary to identify

the legislative source of any particular power or

jurisdiction being exercised. It so happens in

this case that that is obvious.

This submission does not necessarily deny that

the Panel may be Commonwealth officers amenable to

section 75(v) and the review jurisdiction of that
provision, for the reasons that have been

considered in Cram, to which the Court has already

been referred. There are legislative differences,
and if that ever came to be determined, attention

may have to be paid to those, but they may well be

Commonwealth officers for that purpose.

Precision 94 26/9/91

But even if the Panel were Commonwealth

officers, it does not follow, in our submission,

from that proposition, that the power being

exercised in the present circumstances is

Commonwealth power. It is not apparent, however,

in our submission, that section 76(ii) would apply

where a Panel is solely exercising Victorian

jurisdiction.

To illustrate the submission we would put

here, the question whether the Panel was validly invested with Victorian jurisdiction, a question that would necessarily involve consideration of

section 174 of the Australian Securities Commission

Law, would be a section 76(ii) question. But once

it is determined that there has been a valid

conferral of Victorian law on the Panel and the

Panel is then proceeding solely to exercise that

Victorian jurisdiction, in our submission, no scope for section 76(ii) to operate exists in that

circumstance.

In summary, it is submitted that, in essence, the Panel in this particular case would be doing

what section 174 merely enables it to do, that is,

to exercise the powers and functions directly

conferred by the Victorian law. That is put
whether the power be administrative, legislative,

or judicial, in the scheme of this Act. It does

not matter, in respect of that submission, as to

the source and nature of the power being exercised.

Of course, in more general circumstances the

Panel is established to exercise the jurisdiction

conferred by all the States and the Territories.

If that jurisdiction be or includes judicial power

then, with reference to the Territories

jurisdiction, it is our submission that it is not

the judicial power of the Commonwealth. I will not

repeat the submissions, but would respectfully

adopt those that have fallen from my learned

friend, the Solicitor for the Commonwealth, in that

respect.

That brings me to some matters concerning

section 122, particularly, is section 174 a valid
exercise of the Territory's power and to the

question of section 11 of the Corporations

Legislation Amendment Act 1990 which provided that

the ASC law was a law for the government of the

Australian Capital Territory.

In our respectful submission, it is open to

the legislature of any State or Territory - and it

would appear to us that essentially the same issues

are involved, whether it be a State or a Territory

here - to take the view that it was for the peace,

Precision 95 26/9/91

order and good government of the Territory; to
participate in a national scheme to regulate

matters, which may give rise to similar

difficulties in each jurisdiction, or which may not

be confined wholly to any jurisdiction in a

particular case or which would appear to be most

efficiently regulated by a uniform or consistent

scheme of regulation.

A scheme of that kind need not involve all

jurisdiction. It will be for the peace, order and

good government of all States and Territories; it

will be for the peace, order and good government of

any two or more to co-operate with each other, but

the very fact that all jurisdictions participate,

points up, in our submission, the strength of the
perceived need for co-operation or the perceived

benefits of legislating in a co-operative manner.

In the case of corporations, Your Honours, it

is notorious that many corporate activities are not

confined wholly within - - -

MASON CJ: Well, you do not need to labour that; that is

self-evident.

MR PARKER:  The presence, of course, of the Corporations

power in section 5l(xx) suggests that this type of

concern that is interjurisdictional at the moment,
has been present and recognized since the

foundation of the Constitution. In our submission,

there is clearly not merely a remote and general

connection, but a very substantial and important

connection with each and all of the jurisdictions

in Australia in the enactment of this uniform

co-operative scheme. I used the words "remote" and

"general" in distinction to "substantial" and

"important", even though "remote" and "general" is

sufficient on the authorities to adequately found a

nexus to support the exercise of legislative power.

Your Honours have been referred to Union Steamship

case, 166 CLR 1 at page 14.

Now, in our submission there is clearly a

connection in a legislature joining in a

legislative and administrative scheme by which the

relevant matters will be regulated in and for the

jurisdiction and, of course, the first part about

all of this is that it provides a complete

regulatory scheme, including that part of it which

is the Panel and takeovers, for the ACT.

The scheme also enables those inquiring into

conduct in a jurisdiction to exercise their powers

beyond the particular borders of the enacting

jurisdiction and in that respect significantly

advantages the administration and effectiveness of

Precision 96 26/9/91

the Act for the purposes of the Australian Capital

Territory. Its officers do not find themselves

without any or adequate power if they have to be

dealing with people or circumstances that have
occurred out of the Australian Capital Territory.

Also, there are significant advantages to the

Australian Capital Territory in that not only is
there a law for the jurisdiction but that law and
the administrative standards under which it is
applied are dealt with in a manner which is
uniform, not only within the Territory but within
the country, and administrative standards are very
important, as Your Honours will appreciate,

especially in a legislative scheme where the

provisions are so capable of widely divergent

consideration. Uniformity of standards are a very

important consideration to those affected by the

administration as well as those administering and a
scheme of this type, in particular a single Panel,
is a means of ensuring that desirable consequence.

It is not the only way it could be achieved, but in our respectful submission it is an obvious

one, one which is likely to be appropriate and

successful, and therefore open to the Parliament to
take the view that that is the one which is to be

preferred.

Turning now to section 11 of the Corporations

Legislation Amendment Act. Reactions to this included: can the Parliament pick and choose its source of power, and my learned friend,

Mr Jackson's submission that this amendment clearly

was not just an exercise of the Territory's power

because it purported to change the character of

section Sl(xx) to a section 122 law, and that

necessarily involved an exercise of section Sl(xx)

power. We would make these submissions: firstly,

section 11(1) is not saying that in enacting this

amendment the Parliament is only exercising

section 122 power. It is providing that in its

future operation the ASC law is to be taken as a law for the government of the ACT in relation to the regulation - - - - -

DEANE J:  Mr Solicitor, can you help me find section 11(1).

MR PARKER: It was handed up separately, if it please

Your Honours.	I am sorry - page 34 of the pamphlet
copy.

DEANE J: Yes, I have it, thank you.

MR PARKER:  I am sorry that I went ahead of Your Honour

there. The point we were making is that the real

force of section 11(1) is to say that in its future

Precision 97 26/9/91

operation the law is to be taken as a law for the

government of the Territory. Such a legislative

declaration, in our submission, has important

consequences, especially in the interpretation and

operation and the effect that is given to the law.

For example, a provision which in so many terms

precluded conduct and provided penalties for a

breach of the provision before the 1989 amendment

would be read as precluding that conduct anywhere

in Australia.

After that 1989 amendment, in our submission,

that provision should be read as only precluding

that conduct in the ACT, in the absence of an

expressed or necessarily implied extraterritorial

operation. Section 11(1), in our submission, has

significant consequences in the intended force and

effect of some of the provisions of the ASC law.

The one we are particularly concerned with, in our

submission, does not appear to be affected by this

but, in our submission, to see the force of 11(1)

and its relevance, those other provisions need to

be borne in mind.

BRENNAN J:  Does that mean you can issue a false prospectus

in Western Australia in respect of an ACT company?

MR PARKER:  No, Your Honour, there you would be dealing with

either an express or a necessary implication of

extraterritorial operation. But conduct which was

clearly without more, simply precluded and created

an offence and nothing about the conduct or the

circumstances gave rise to extraterritoriality

then, in our submission, in accordance with the
ordinary principles of interpretation that
provision would be limited in its operation to the

Australian Capital Territory.

DEANE J:  You really say that 11(1) should be read as saying

the law only operates to the extent that it is a Territory? law for the government of the Australian Capital

MR PARKER:  In our submission, is one of the effects of that

provision. Now, to illustrate the effect of that,

could I take a law expressly enacted by the

Parliament, as here, to be a law for the government

of the Australian Capital Territory which dealt

with Posts and Telegraphs and in a way which

included a provision that enabled letters to be

opened by postal officers. In our submission, that

law should not be taken to give any authority to

postal officials to open letters anywhere but in

the Australian Capital Territory, in the absence of some clear indication, otherwise, from the words or the subject-matter.

Precision 98 26/9/91

The Posts and Telegraphs example is useful to

point up that where as Parliament had power to

legislate under section 51, to alter the law

throughout Australia with respect to Posts and

Telegraphs, if it chose only to exercise that power

under section 122, in respect of the Australian

Capital Territory, then its enactment should not be given effect, in our respectful submission, beyond

that intended operation.

It would be erroneous, in our submission, to

use notions which, in other contexts, are

appropriate to ensure the validity of an enactment

so that it has its intended force, notions which

involve drawing on other heads of power if one is

deficient for the purpose. It would be erroneous to use those notions for the purpose and with the

effect that the intended operation of this law is

expanded from merely regulating affairs, in or

relating to the Australian Capital Territory, into

a national law.

Now, none of that of course denies that a law

made under the Territory's power has force,

according to its intended terms and effect,

anywhere where the authority of the federal

Parliament runs and it does not, of course, in any way deny that the Territory's power has an extraterritorial component as the States power.

There must, of course, be a nexus with the

Territory for a Territory law to be valid if

enacted as a Territory law, and if there is

intended extraterritorial operation the nexus must

support that extraterritorial operation for the law

to be valid as a Territory law. We have already

submitted that in this case there is sufficient

nexus to support both of the laws in question in

their relevant operation, although in so far as we

are dealing with extraterritorial operation we

would entirely agree with my learned friend, the

Commonwealth Solicitor's submission that there is

limited scope in these provisions for

extraterritorial operation beyond perhaps

supporting the mere existence of the Panel.

In our submission, the ASC law in the

provisions with which the Court is concerned, is
wholly valid as a section 122 law. If it should be

found to confer judicial power it is, for the

reasons we have submitted, not the judicial power

of the Commonwealth.

In our submission, it is something of a red

herring to suggest that many of its provisions, at
least in part of their operation, could have been

enacted under other powers of the Parliament. But

Precision 99 26/9/91

if section 5l(xx) or some other power can be said

to be available to reinforce section 122, we would

submit two things should follow: firstly, the

resulting Act should be given no wider operation

than a law for the Territory would have; and

secondly, if there was thereby an infringement of section 72 with the consequence that the exercise

of power in so far as it relied upon section 5l(xx)

or some other 51 head of power would to that extent

be invalid, then, in our submission, what we would

be left with is the Act as enacted as a valid law

of the Territory pursuant to section 122.

In view of what has been put to Your Honours,

I would leave the balance of our written

submissions to speak for themselves.	May it please
the Court.

MASON CJ: Thank you, Mr Solicitor. Mr Solicitor for South

Australia

MR DOYLE:  Does the Court have our outline of submissions?

MASON CJ: Yes.

MR DOYLE: Perhaps if I could get in first and say the Court

should not be discouraged or despondent. I do not

propose to develop all the matters covered in the

outline.

Your Honours, could I just mention one matter?

It is only a minor matter. There is a 1991

amendment to the legislation, Act No 110 of 1991,

initiation of these proceedings and also a further

order made by the Panel following a judgment of

Justice Ryan in the Federal Court. So as we

understand the position, Your Honour, there are

interim operations by undertaking an order in

place, but one would suppose that so far as market

regulation is concerned matters should not remain

the status quo any longer than is necessary.

MASON CJ: Very well, the Court will consider its decision

in this matter and will adjourn until 10.15 am

tomorrow.

AT 12.36 PM THE MATTER WAS ADJOURNED SINE DIE

Precision 117 26/9/91