R v Trade Practices Tribunal; ex parte Tasmanian Breweries Pty Ltd

[1970] HCA 8

HIGH COURT OF AUSTRALIA

McTiernan, Kitto, Menzies, Windeyer, Owen and Walsh JJ.

THE QUEEN v. TRADE PRACTICES TRIBUNAL; Ex parte TASMANIAN BREWERIES PTY. LTD.

(1970) 123 CLR 361

24 March 1970

Constitutional Law (Cth)—Restraint of Trade

Constitutional Law (Cth)—Powers of Commonwealth Parliament—Judicial power of Commonwealth—Trade Practices Tribunal—Power to determine that agreement or practice examinable and whether contrary to public interest—Agreement or practice rendered unenforceable by determination—Power to make restraining order—The Constitution (63 &64 Vict. c. 12), ss. 51 (i.), 71, 72—Trade Practices Act 1965-1968 (Cth), ss. 47, 49, 50, 52. Restraint of Trade—Restrictive practices—Trade Practices Tribunal—Whether vested with judicial power of the Commonwealth—The Constitution (63 &64 Vict. c. 12), ss. 51 (i.), 71, 72—Trade Practices Act 1965-1968 (Cth), ss. 47, 49, 50, 52.

Decisions

1970, March 24.
The following written judgments were delivered:-
McTIERNAN J. In my opinion, none of the provisions of the Trade Practices Act 1965-1968 (Cth) is repugnant to Ch. III of the Constitution, and the establishment of the Trade Practices Tribunal is not open to attack on the ground that the members are not given by the Act the specific tenure enacted by s. 72 (ii.) of the Constitution. (at p370)

2. The proceedings to which the order nisi for prohibition relates were instituted under s. 47. The validity of this section is not impugned. The institution of proceedings under s. 47 is a ministerial act. The provisions of the Act which are called in question on the ground that they are repugnant to Ch. III begin with s. 49. In my view, the nature of the function assigned by this section cannot be properly understood without reading with it ss. 47 and 51. These sections are in Pt VI of the Act, the heading of which is : "Examination of Agreements and Practices by the Tribunal." Section 47 limits the Tribunal's function of "examination" to (1) agreements which the Commissioner has reason to believe are examinable agreements and which he is of opinion contain restrictions contrary to the public interest ; and (2) to practices which he has reason to believe are examinable and are contrary to the public interest. The proceedings now in question were instituted in respect of monopolization, a term defined by s. 37 and an examinable practice referred to in s. 36. The institution of the proceedings is within s. 7A of the Act. The effect of s. 49 is to interpose a quasi-judicial inquiry by the Tribunal between the Commissioner's consideration under s. 47 and the operation of s. 51 (which depends upon the determination under s. 49). The execution of the mandate given by the section to the Tribunal involves adjudication. But it is commonplace in the field of administrative law that adjudication is not distinctive of judicial power exclusively : and it is not necessarily inconsistent with true executive or administrative action.

"The power and function of finally determining matters of fact and even of discretion are not solely indicative of judicial action. That is an attribute common to administrative bodies, to subordinate bodies that are adjuncts to legislation, and to judicial bodies" : Federal Commissioner of Taxation v. Munro, per Isaacs J. (1926) 38 CLR 153, at p176

A determination under s. 49 is not in my opinion a judicial act. It is the factum on which the operation of s. 51 depends. Proceedings under s. 47 are not, in my view, a civil or criminal suit ; the document which the Commissioner files to commence proceedings is not a pleading seeking the protection or enforcement of a right nor claiming judicial relief. I think that s. 49 is not an attempt by the Parliament to exert the power conferred by s. 77 (i.) of the Constitution to define the jurisdiction of the Trade Practices Tribunal (as if it were a "federal court"), in a "matter" arising under the Trade Practices Act. In the joint judgment in the case In re The Judiciary Act 1903-1920 and In re The Navigation Act 1912-1920 (1921) 29 CLR 257, at p 265 , the following statement is made :

" . . . we do not think that the word 'matter' in s. 76 means a legal proceeding, but rather the subject matter for determination in a legal proceeding. In our opinion there can be no matter within the meaning of the section unless there is some immediate right, duty or liability to be established by the determination of the Court."

The judgment continues : "The word 'matter' is used several times in Ch. III of the Constitution (ss. 73, 74, 75, 76, 77), and always, we think, with the same meaning." After referring to opinions expressed in South Australia v. Victoria (1911) 12 CLR 667 , their Honours said, in the joint judgment mentioned above (1921) 29 CLR, at p 266:

"All these opinions indicate that a matter under the judicature provisions of the Constitution must involve some right or privilege or protection given by law, or the prevention, redress or punishment of some act inhibited by law."

None of the provisions of the Trade Practices Act 1965-1968 assigns jurisdiction to the Tribunal in any "matter" within the meaning of Ch. III arising under the Act. The dominant statutory functions of the Tribunal are appropriate exclusively to administrative action. They pertain to trade and commerce. "Courts do not execute or maintain laws relating to trade and commerce" : New South Wales v. The Commonwealth, per Isaacs J. (1915) 20 CLR 54, at p 93 . (at p372)

3. In my opinion the order nisi should be discharged. (at p372)

KITTO J. Part II of the Trade Practices Act 1965-1968 (Cth) establishes a tribunal which it designates the Trade Practices Tribunal. The Tribunal is constituted in a manner which does not comply with the requirements of s. 72 of the Constitution for the creation of a federal court. By s. 71 of the Constitution the judicial power of the Commonwealth is vested exclusively in the High Court, such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction. Since the Tribunal answers none of these descriptions it is not a competent repository of any part of the judicial power of the Commonwealth. (at p372)

2. Part VI of the Trade Practices Act contains provisions purporting to confer upon the Tribunal authority to entertain certain proceedings instituted by an official styled the Commissioner of Trade Practices. Section 54 provides that the Tribunal in such proceedings may make interim orders where there is a likelihood of grave hardship to a person or irremediable injury to the public interest, and s. 49 provides for its making such inquiry as it considers appropriate having regard to the matters alleged by the Commissioner. The latter section then provides that if the Tribunal is satisfied that an agreement of a certain description, called in the Act an examinable agreement, exists or has existed, or that a practice of a certain description, called in the Act an examinable practice, has been, or is being, or is proposed to be, engaged in, it shall make a determination by which it (a) records its findings as to those matters, including its findings as to the parties to, and terms of, the agreement, or the particulars of the examinable practice, and (b) determines, in accordance with its opinion, whether the relevant restrictions to which the proceedings relate (i.e. under the examinable agreement) are contrary to the public interest or, as the case may require, the examinable practice is contrary to the public interest. (at p373)

3. The question is whether the powers which Pt VI thus purports to confer are within the concept of the judicial power of the Commonwealth. Questions of this general description are often difficult to decide, for it has been found possible to frame an exhaustive definition of judicial power. But this is not to say that the expression is meaningless. The uncertainties that are met with arise, generally if not always, from the fact that there is a "borderland in which judicial and administrative functions overlap" (Labour Relations Board of Saskatchewan v. John East Iron Works Ltd. (1949) AC 134, at p 148 ), so that for reasons depending upon general reasoning, analogy or history, some powers which may appropriately be treated as administrative when conferred on an administrative functionary may just as appropriately be seen in a judicial aspect and be validly conferred upon a federal court. The judgments in Reg. v. Davison (1954) 90 CLR 353 provide illustrations of this. (at p373)

4. But I do not think that any such difficulty confronts us here. There are no traditional concepts to be applied as there were in Reg. v. Davison, and two considerations, one negative and the other positive, appear to me when taken together to require the conclusion that the powers entrusted to the Tribunal are essentially non-judicial. The powers must, of course, be performed in a judicial manner, that is to say with judicial fairness and detachment, but the same is true of many administrative powers. Close examination of the relevant provisions of the Act shows, I think, that on the one hand no exercise of any of the Tribunal's powers is an adjudication (in the proper sense of the word), and that on the other hand the result achieved by an exercise of any of the powers is a result foreign to the nature of judicial power. (at p374)

5. In Labour Relations Board of Saskatchewan v. John East Iron Works Ltd. (1949) AC, at p 149 , Lord Simonds for the Privy Council said :

"It is a truism that the conception of the judicial function is inseparably bound up with the idea of a suit between parties, whether between Crown and subject or between subject and subject."

Tis is not to say that some powers may not be held to be judicial though no adjudication in a lis inter partes is involved, for there may be sufficient justification for such a conclusion in an analogy with an admittedly judicial function, or in the fact that the power is ancillary to a judicial function, or in some such consideration : see Reg. v. Davison (1954) 90 CLR, at p 368 . But in general the notion is there, even if in the background, of arbitrament upon a question as to whether a right or obligation in law exists. Griffith C.J. fastened upon it in the passage in his judgment in Huddart, Parker &Co. Pty. Ltd. v. Moorehead (1908) 8 CLR 330, at p 357 which the Privy Council has repeatedly approved, not as a comprehensive definition but as a statement of the broad features of judicial power : see Labour Relations Board of Saskatchewan v. John East Iron Works Ltd. (1949) AC, at p 149 . It will be remembered that to him the central idea was "the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or poverty". See also the statements of Palles C.B. and Holmes J. cited in Reg. v. Davison (1954) 90 CLR, at pp 367, 370 . Thus a judicial power involves, as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons. In other words, the process to be followed must generally be an inquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined ; and the end to be reached must be an act which, so long as it stands, entitles and obliges the persons between whom it intervenes, to observance of the rights and obligations that the application of law to facts has shown to exist. It is right, I think, to conclude from the cases on the subject that a power which does not involve such a process and lead to such an end needs to possess some special compelling feature if its inclusion in the category of judicial power is to be justified. (at p375)

6. The powers of the Tribunal do not present any such feature, and they are not directed to any determination or order which resolves an actual or potential controversy as to existing rights or obligations. The Commissioner alone is authorized to institute proceedings before the Tribunal. He is of course a party to the proceedings (see e.g. s. 71), but he does not come before the Tribunal asserting a right to relief in either a personal or a representative capacity. He makes allegations of fact relevant to the questions the Tribunal is required by the Act to consider, and the Tribunal, if it is satisfied that the agreement or practice is examinable, has then to form and give expression to its own opinion as to whether the relevant restriction or practice is "contrary to the public interest". Even where the Commissioner makes submissions on these questions in order to assist the Tribunal, he is not seeking the vindication of any right or obligation. In particular, if he submits that a particular restriction or practice is or is not contrary to the public interest he is not thereby contending that a decision should be made for or against the existence of any right or obligation so as to be binding as between the parties to the restriction or practice, or as between them and either the Crown or the public. The inquiry is not into the validity of the agreement or the legality of the practice, as s. 51 shows most clearly. Even in relation to an agreement, the question is not whether it is contrary to public policy in the sense in which the term is used in the common law: cf. In re Chemists' Federation Agreement (No. 2) (1958) 1 WLR 1192, at p 1212 . The determination does not resolve any question as between opposed interests. It merely records whether the Tribunal has satisfied itself, first, that an agreement or practice has the characteristics which the Act comprehends in the word "examinable", and, secondly, that the restriction or practice, if examinable, is contrary to the public interest. Such determinations as these have quite often to be made in the exercise of administrative power. The fact that an official is given a power conditionally upon being satisfied of a particular state of facts - and so is authorized to determine unexaminably "the jurisdictional fact" upon which his power depends (if the expression be thought appropriate) - is no indication that in deciding whether he is so satisfied he is exercising judicial power. In the well-known judgment of Palles C.B. in R. v. Local Government Board for Ireland (1902) 2 IR 349 there is a passage which has been repeatedly cited in this Court and has been relied upon in the present case as tending against this view. The learned Chief Baron observed that if the existence of a ministerial power depends upon a contingency, although it may be necessary for the officer to determine whether the contingency has happened, in order to know whether he shall exercise the power, his determination does not bind, for as his Lordship went on to say:

"The happening of the contingency may be questioned in an action brought to try the legality of the act done under the alleged exercise of the power. But where the determination binds, although it is based on an erroneous view of the facts or law, then the power authorizing it is judicial." (1902) 2 IR, at p 374

The reference is to a power which depends upon the happening of a contingency. We are here concerned with a power which depends upon nothing but the Tribunal's own satisfaction that certain conditions exist. The determination of the Tribunal that it is so satisfied - the making of its "findings" (as s. 49 calls them) - does not bind in the sense in which Palles C.B. used the expression; that is to say, it does not conclude for all purposes any question as to which the Tribunal declares itself satisfied. It answers only the question whether the Tribunal is in fact so satisfied - and does not answer even that question conclusively, for if the Tribunal were to record that it was so satisfied when in fact it was not, the next step, which the Tribunal is authorized to take only if it is so satisfied, could be set aside by this Court in exercise of the jurisdictions which s. 102 (2) acknowledges. (at p376)

7. A determination that an agreement or a practice is examinable therefore has, in my opinion, no point of contact with the concept of judicial action unless it derives it from the nature of the power to which it is preliminary. But the power which the Tribunal may exercise if satisfied on the preliminary point is to determine, "in accordance with its opinion", a question that is essentially non-justiciable. I so describe if for the reason that it does not depend upon the application of any ascertainable criterion. The Act requires the Tribunal in considering the question of the public interest to make a basic assumption and to take certain matters into consideration (s. 50), but the question upon which it has to pronounce is not as to whether the relevant restriction or practice satisfies an ascertained standard but as to whether it satisfies a description the content of which has no fixity - a description which refers the Tribunal ultimately to its own idiosyncratic conceptions and modes of thought. In words which I take from the joint judgment in Reg. v. Spicer; Ex parte Waterside Workers' Federation of Australia (1), it may be said here that there is no "claim of right depending on the ascertainment of facts and the application to the facts of some legal criterion provided by the legislature". The judgment proceeded:

"The existence of some judicial discretion to apply or withhold the appointed legal remedy is not necessarily inconsistent with the determination of such a matter in the exercise of the judicial power of the Commonwealth. But it is perhaps necessary to add that the discretion must not be of an arbitrary kind and must be governed or bounded by some ascertainable tests or standards." (1957) 100 CLR 312, at p 317

Similarly, to confer a power of discretionary judgment as to whether a restriction or practice has a specified quality may be to confer judicial power, but only if the quality is so described that its existence is to be judged by applying an objective test or standard supplied by the legislature. When the Tribunal, in conformity with s. 49 (1) (b), "determines, in accordance with its opinion, whether the relevant restrictions to which the proceedings relate are contrary to the public interest" it necessarily supplies for itself its own subjective criterion for deciding, as a matter of individual opinion, though on the assumption required by s. 50 (1) and taking into account all the matters specified in the Act, where the public interest appearsto it to lie in the circumstances in which the restrictions or practice operate. Thus the work of the Tribunal is work which would be appropriate for the legislature itself to do if it had the time to consider individual cases. It would be obviously impracticable for the Parliament to apply its own ideas as to what is contrary to the public interest, either by passing a special Act for every individual case or by laying down a definition which in every case would be sure to produce a result satisfactory to it. There is probably no practicable alternative to setting up an authority which with some but incomplete guidance from the legislature will apply its own notions concerning the public interest. This course the Trade Practices Act adopts, contenting itself with prescribing the qualifications for membership of the Tribunal, giving a limited measure of guidance, and then relying upon the Executive's choice of members to ensure, so far as assurance is possible, that the notions applied will be such as the Parliament would approve. (at p377)

8. None of the powers of the Tribunal, then, involves any adjudication upon a claim of right. This negative consideration, however, does not stand by itself. The effect given by the Act to a determination under s. 49 that a restriction or practice is contrary to the public interest is to render unenforceable for the future an agreement under which the restriction is accepted or the practice is provided for (s. 51), and to enable the Tribunal to make such orders as it thinks proper for restraining future conduct which falls within certain descriptions (s. 52). The determination itself has no operative effect: it constitutes the factum by reference to which the Act operates to alter the law in relation to the particular case. And an order under s. 52 (or an interim restraining order under s. 54) is in like case. It presents a direct contrast with an injunction granted by a court as a means of enforcing obligations that have been established by adjudication. The order restrains future conduct, not as being in breach of ascertained obligations, but as being in conformity with ascertained obligations or practices - not in order to ensure observance of them but to prevent observance of them, because it is considered that their observance would be against the public interest. The Act, particularly s. 52 (7), operates upon the order to give its provisions the force of law, and thus to alter the law for the future in relation to the particular case. (at p378)

9. For these reasons the powers of the Tribunal seem to me to be of a nature foreign to the concept of judicial power. If analogy be sought it may be found in a regulation made under the authority of a statute, for a determination under s. 49 and an order under s. 52 or s. 54 are in aid of the law-making process. (at p378)

10. In my opinion the attack upon the validity of the provisions conferring powers upon the Tribunal fails and the order nisi should be discharged. (at p378)

MENZIES J. Since 1918, when Alexander's Case (Waterside Workers' Federation of Australia v. J. W. Alexander Ltd.) (1918) 25 CLR 434 ,was decided, it has been established that it is contrary to the Constitution for Parliament to seek to establish a tribunal otherwise than as a federal court constituted under Ch. III of the Constitution and to attempt to confer upon that tribunal part of the judicial power of the Commonwealth. Such an unconstitutional grant of judicial power may be inseparable from the establishment of the Tribunal, so that the Tribunal itself falls. Where, however, the unconstitutional grant is separable from its establishment, the Tribunal stands, but without judicial power. (at p378)

2. The Trade Practices Act 1965-1968 (Cth), establishes the Trade Practices Tribunal otherwise than as a federal court constituted under Ch. III, and the case for the prosecutor is that certain sections of the Act unavailingly attempt to confer upon the Tribunal part of the judicial power of the Commonwealth. It is the validity of these sections that are here in question. (at p379)

3. The sections are 49 to 84 and 102. By these sections the Tribunal is authorized to make and review certain determinations and orders, ss. 49-66; provision is made for the enforcement of orders made by the Tribunal, ss. 67-69; the proceedings of the Tribunal are regulated and protected, ss. 70-84 ; and the validity of a determination or order of the Tribunal is protected from challenge, save by prerogative writ or injunction in this Court, s. 102. (at p379)

4. The Act provides for a Commissioner of Trade Practices and that officer is authorized by s. 47 to institute proceedings in the Tribunal in respect of (1) restrictions contrary to the public interest accepted by an examinable agreement, and (2) examinable practices contrary to the public interest ; where the Commissioner has reason to believe that there was, or is, an examinable agreement or that there is, or will be, an examinable practice, and he is of opinion, that the restriction or practice, as the case may be, is contrary to the public interest. (at p379)

5. Upon the institution of such proceedings by the Commissioner, the Tribunal is to act as is provided in s. 49. Section 49 (1) and (2) are as follows:

"49 (1). In proceedings under section 47 of this Act, the Tribunal, after such inquiry as it considers appropriate having regard to the matters alleged by the Commissioner, if it is satisfied that an examinable agreement exists or has existed, or an examinable practice has been, is being or is proposed to be, engaged in, shall make a determination by which it - (a) records its findings as to those matters, including its findings as to the parties to, and terms of, the agreement, or the particulars of the examinable practice ; and

(b) determines, in accordance with its opinion, whether the relevant restrictions to which the proceedings relate are contrary to the public interest or, as the case may require, whether the examinable practice is contrary to the public interest. (2) Where the Tribunal makes a determination under this section, it shall state, and record in the records of the Tribunal, the reasons for its opinion that the restriction or practice is, or is not, contrary to the public interest."

In considering whether any restriction or practice is contrary to the public interest s. 50 (1) requires the Tribunal to take as the basis of its consideration:

". . . the principle that the preservation and encouragement of competition are desirable in the public interest, but shall weigh against the detriment constituted by any proved restriction of, or tendency to restrict, competition any effect of the restriction or practice as regards any of the matters referred to in the next succeeding sub-section if that effect tends to establish that, on balance, the restriction or the practice is not contrary to the public interest."

The next succeeding subsection sets out matters (a) to (f) as follows:

"(a) the needs and interests of consumers, employees, producers, distributors, importers, exporters, proprietors and investors;

(b) the needs and interests of small businesses; (c) the promotion of new enterprises; (d) the need to achieve the full and efficient use and distribution of labour, capital, materials, industrial capacity, industrial know-how and other resources;

(e) the need to achieve the production, provision, treatment and distribution, by efficient and economical means, of goods and services of such quality, quantity and price as will best meet the requirements of domestic and overseas markets ; and

(f) the ability of Australian producers and exporters to compete in overseas markets."

Section 50 (3) provides:

"In considering the public interest in relation to a practice of monopolization, the Tribunal shall weigh against any detriment (including detriment constituted by any proved restriction of, or tendency to restrict, competition) that has resulted, or can be expected to result, from the practice any effect of the practice as regards any of the matters referred to in paragraphs (a) to (f) of the last preceding sub-section if that effect tends to establish that, on balance, the practice is not contrary to the public interest." (at p380)

6. The effect of the determination that a restriction accepted, or a practice provided for, by an examinable agreement is contrary to the public interest is that the agreement - if in force - becomes unenforceable as regards observance of the restriction or engaging in the practice on and after the date of the determination, s. 51 (1) and (2). (at p380)

7. Section 51 (3) provides:

"Where the Tribunal determines that a restriction or practice is contrary to the public interest, a transaction entered into, whether before or after the making of the determination, in pursuance of the restriction or in accordance with the practice is not illegal or unenforceable by reason only of the making of that determination." (at p381)

8. Section 52 (1) and (4) authorizes the Tribunal, upon making a determination that a restriction accepted under, or a practice provided for, by an examinable agreement is contrary to the public interest, to make orders restraining the parties thereto from giving effect to, or enforcing, the agreement in respect of the restriction or practice, or entering into another agreement whereby a like restriction or practice is accepted or provided for. (at p381)

9. Section 52 (2) is as follows:

"Where the Tribunal determines that a practice is contrary to the public interest, it may make such orders as it thinks proper for restraining the person concerned, or the combination concerned or any of its members - (a) from engaging or further engaging in the practice ; (b) from engaging in practices of a like kind ; or (c) from doing acts or things that, in the opinion of the Tribunal, would, unless there were a change in circumstances, amount to, or contribute to, a continuance or repetition of the practice or engagement in a practice of a like kind."

Provision is also made in s. 52 for ancillary orders. Section 52 (7) provides:

"Subject to section 57 of this Act, orders of the Tribunal have the force of law." (at p381)

10. Section 57, in substance, confines the operation of an order to parties to proceedings on whom the order is expressly binding. (at p381)

11. The making of interim restricting orders is authorized by s. 54, the subject of the restrictions therein set out. (at p381)

12. The Tribunal is authorized to refer a question of law arising in proceedings to the Commonwealth Industrial Court which is authorized to hear and determine any such question, s. 66. (at p381)

13. By ss. 62-65 provision is made for the review of determinations made by the Tribunal by a Review Division of the Tribunal which may direct reconsideration. Thereupon the Tribunal may confirm, vary or reserve its previous determination. (at p381)

14. The provisions relating to the enforcement of orders of the Tribunal are to be found in Pt VII. They are, in substance, that disobedience to an order of the Tribunal is contempt of the Tribunal and is punishable by the Commonwealth Industrial Court as if it were a contempt of that Court. (at p381)

15. The only other sections to which specific reference is necessary are ss. 98 and 102 which are as follows:

"98. In proceedings under Part VII. or Part X., a determination or order of the Tribunal out of which the proceedings arose is evidence of the facts stated in the determination or order to have been found by the Tribunal." "102. - (1) Subject to this section, the validity of a determination or order of the Tribunal shall not be challenged, reviewed or called in question in any proceedings, including proceedings under Part VII. or Part X. (2) The last preceding sub-section does not limit the exercise of any jurisdiction of the High Court to issue a writ of prohibition, mandamus or certiorari or an injunction." (at p382)

16. There are one or two matters arising out of this review of the provisions of the Act which deserve emphasis. The first is that the Tribunal makes determinations and orders. To determinations the statute itself attaches consequences for the future. Thus, for instance, restrictions accepted under agreements become unenforceable, s. 51 (1) and (2). The making of a determination is also made the condition of further action by the Tribunal. Thus restraining orders may be made under s. 52 which are given the force of law. Nevertheless, the Tribunal cannot enforce its orders. It is the Industrial Court that has that authority under Pt VII. (at p382)

17. It seems to me that two critical questions emerge:

(1) Does the making of a determination which has statutory consequences and provides the basis for further action by the Tribunal, involve an exercise of judicial power?

If not,

(2) is the making of a restraining order having the force of law the exercise of judicial power?

By a determination the Tribunal (1) records its findings that "an examinable agreement exists or has existed, or an examinable practice has been, is being, or is proposed to be, engaged in" including "its findings as to the parties to, and the terms of, the agreement, or the particulars of the examinable practice" ; and (2) determines, with reasons, whether the restriction or practice, as the case may be, is contrary to the public interest. These findings are unchallengeable except in this Court, s. 102 ; and this Court cannot be concerned merely with the question whether the Tribunal was right or wrong. The fact that a prerogative writ may go, is, for present purposes, insignificant. It is part of the constitutional powers of this Court to issue prerogative writs to officers of the Commonwealth, whether or not such officers are exercising judicial or administrative powers. The Act merely recognizes this power and its existence affords no indication whatever of the type of power being exercised by the officer to whom writs may go. If, therefore, a determination is followed by a restraining order and such an order is followed by proceedings in the Industrial Court for its enforcement, the Industrial Court cannot investigate the correctness of the determination made by the Tribunal which provides the basis for all that follows. The Court must accept that determination, including that part of the determination that there is an examinable agreement or practice. Similarly, if civil proceedings are taken under Pt X the determination, upon which the order supporting such proceedings is based, is altogether beyond challenge. Moreover, the determination does more than provide a basis for an order which may lead to further proceedings. By virtue of the statute the determination renders unenforceable what theretofore had been enforceable. A determination, therefore, results in the destruction of existing agreements in part, but does so only for the future. (at p383)

18. There is no doubt that a determination does operate to the legal detriment of persons party to the agreement or practice that is found to be examinable and contrary to the public interest, but that, although sufficient to require that, in making its determination, the Tribunal should act judicially, is not in itself enough to compel the conclusion that the power to make a determination is judicial power. (at p383)

19. The Act defines examinable agreements, s. 35, and examinable practices, s. 36, and by s. 38 directs the Tribunal to disregard certain matters in determining whether an agreement is an examinable agreement. An examinable agreement has that characteristic upon its making or variation, or, if made before the date of the commencement of the Act, at the expiration of thirty days from the commencement of the Act, s. 35. It is the Act, not the decision of the Tribunal, that makes an agreement or practice examinable. The determination is a decision, or a record of a decision, made in the course of the proceeding that the agreement or practice is to the satisfaction of the Tribunal of the kind specified in the Act, i.e. examinable. If such a decision is coupled with a further decision that, in the opinion of the Tribunal, the agreement or practice is contrary to public policy, a determination, in the case of an agreement, has immediate consequences, i.e. part of it becomes unenforceable. The making of a determination is also the basis of further action by the Tribunal. The point to which I am addressing myself can best be developed in relation to agreements rather than practices, although in each case the principle is the same. That part of a determination which records the finding that an agreement is an examinable agreement as defined in the Act, and the finding which is so recorded, may be different in character from that part of the determination recording that, in the opinion of the Tribunal, the agreement is contrary to the public interest. The former finding seems to me to require the application of judicial standards ; the latter may, perhaps, require no more than the application of an administrative discretion for which guide-lines are provided by s. 50. An agreement is contrary to the public interest only when the Tribunal determines that, in its opinion, it is ; an agreement or practice is examinable because it falls within the terms of s. 35 and of s. 36 as the case may be. In determining whether or not it is specified that an agreement is an examinable agreement the Tribunal must construe the Act, make findings of fact about the agreement and apply the Act, as it construes it, to the agreement, as it finds it. The findings of the Tribunal leading to its satisfaction that there is, or has been, an examinable agreement, together form part of its "determination". In face of the language of s. 49 (1) (a) and (b) I cannot accept the contention of the Solicitor-General that the Tribunal's finding that there is, to its satisfaction, an examinable agreement, is not part of its determination under the section, for by the determination the Tribunal records such a finding. However, even if the decision of the Tribunal that it is satisfied that an examinable agreement exists, or has existed, precedes the making of the determination, the decision is part of the adjudication of the Tribunal and its character is the same whether or not it is part of the determination. Section 49 confers power to make a determination based upon and recording findings that a particular agreement or practice is of a particular character, i.e. examinable under the Act, and this by virtue of the definitions to be found in the Act. Such findings by a court would be, clearly enough, judicial. Are they of a different character because they are made by a non-judicial tribunal in the course of proceedings which do not stop with what, by itself, would seem to be a judicial determination ? (at p384)

20. In considering this problem an example may be useful in showing the course which the Tribunal may take in reaching a determination. "Related companies" are defined by reference to the Companies Ordinance 1962 (A.C.T.). Whether companies are related is a question of law. Agreements between related companies, without other parties, are excluded from s. 35 (1) of the Act by reason of s. 35 (3). Let it be supposed that in proceedings under s. 47 the question arises whether the agreement is excluded from s. 35 (1) by s. 35 (3). The Tribunal decides to determine this question itself and, in accordance with the opinion of the Presidential Member presiding, decides that the companies are not related companies, and the agreement, having the other characteristics that satisfy the Tribunal that the agreement is an examinable agreement as defined by the Act, so decides. Reaching this decision involves the construction of the Companies Ordinance 1962 and the Trade Practices Act, the finding of facts in relation to the companies in question, the application of the ordinance to the companies party to the agreement, and the application of the Act to the agreement. If this were to be done by a court it would be the exercise of judicial power. The matter, moreover, does not stop here. The determination embodying the finding that there is an examinable agreement is made unchallengeable and if eventually the parties are proceeded against in the Industrial Court for contempt of an order made by the Tribunal on the basis of its determination, the Industrial Court cannot investigate the question whether the Tribunal's decision upon the question of law raised before it was right or wrong. The Court must accept that decision and can only decide for itself whether or not there has been a contravention of an order which could not have been made without the Tribunal's determination that the agreement was an examinable agreement. In other words, a question of law, upon which all subsequent proceedings depended, has been finally decided by the Tribunal in proceedings between parties instituted before it. What is it then that takes the making of the determination of the Tribunal, or its decision that it is satisfied that there is an examinable agreement, outside the exercise of judicial power ? (at p385)

21. Two contentions have to be noticed. The first, that so much of the determination constituted by findings that an agreement is, to the satisfaction of the Tribunal, an examinable agreement, of itself and without more, has, so it is argued, no legal consequences. Legal effect is given by the Act to the whole of the determination, viz. that there is an examinable agreement and that a restriction accepted thereby is contrary to the public interest, but the finding that there is an examinable agreement is but prefatory to the determination. Secondly, that the effect of the determination, in rendering unenforceable part of an agreement, operates only from the making of the determination. Its effect is prospective in that a determination is a circumstance that brings into operation a legislative frustration in futuro of part of the agreement. Are these things so, and, if so, is the consequence, that the making of a determination is not the exercise of judicial power ? (at p386)

22. Before considering the problem raised by the foregoing contentions, I think it desirable at this point to dispose of an argument which would, perhaps, make the examination which I propose unnecessary. It was argued that the power of the Tribunal is similar to that of the Commonwealth Conciliation and Arbitration Commission, which, it is established, is non-judicial. It seems to me that there is a real distinction between the power of the Tribunal and that of the Conciliation and Arbitration Commission. The Commission has no power to determine finally jurisdictional facts. Unless there is a dispute of a particular character the Commission has no arbitral or conciliatory power whatever and any determination that it may make, that such a dispute exists, is not conclusive of its jurisdiction. On the other hand, the statement already made indicates that the jurisdiction of the Tribunal to make a determination and an order thereon depends upon its own unchallengeable finding that, to its satisfaction, there is an examinable agreement, i.e. upon its own decision of a question of law going to its own jurisdiction. The power of the Tribunal to make a determination depends, not upon whether there is, in law, an examinable agreement, but upon the Tribunal's own satisfaction, right or wrong, that an examinable agreement exists or has existed, s. 49 (1). The capacity so to decide is indicative of judicial power. R. v. Local Government Board for Ireland (1902) 2 IR, at p 373 , per Palles C.B., adopted by Isaacs J. in Huddart, Parker &Co. Pty. Ltd. v. Moorehead (1909) 8 CLR, at pp 383 and 384 , by Latham C.J. in Rola Co. (Aust.) Pty. Ltd. v. The Commonwealth (1944) 69 CLR 185, at p 199 , and by Dixon C.J. and McTiernan J. in Reg. v. Davison (1954) 90 CLR, at p 367 (at p386)

23. Turning back to the contentions already stated, I am not prepared to accept the first as accurately describing the effect of the Act. So much of the determination as consists in the finding, to the satisfaction of the Tribunal, of the existence of an examinable agreement, although by itself it does not affect enforceability of the agreement, is the determination of a jurisdictional fact which provides the basis for further action by the Tribunal. The determination, by a court of limited jurisdiction, that it has jurisdiction, is a determination of the same order and, when made by a court, is, of course, clearly judicial and it would matter not whether the determination to be made is expressed to be of the jurisdictional fact itself or of the court's satisfaction that the jurisdictional fact exists. (at p387)

24. The second contention may be more substantial, because the making of a determination is not a decision upon existing rights and obligations, notwithstanding that it does involve a statutory consequence for the future and it does provide the basis for further action by the Tribunal. (at p387)

25. The determination and enforcement of existing rights or liabilities of parties is, of course, the simplest form of the exercise of judicial power. To go further, however, as the Solicitor-General contended, and to make such a determination and its enforcement the test of whether or not the judicial power is involved would, in my opinion, be to limit too restrictively the nature of judicial power. See Reg. v. Davison (1954) 90 CLR, at pp 367-370 , per Dixon C.J. and McTiernan J. Where the question is whether a power is judicial or not history may, in some cases, help to provide a solution. See Reg. v. Davison (1954) 90 CLR, at pp 369-370 . In others the purpose for which a particular power has been conferred upon a particular body may help to determine its character. In this case history provides no assistance. The Solicitor-General did, however, urge that Parliament clearly enough intended the Tribunal to be something other than a judicial tribunal and that, therefore, no intermediate step on the way to a final administrative determination should be regarded as judicial in character. This is a circumstance to which some weight must be given but it remains true that a non-judicial tribunal cannot be given power to make decisions that are judicial on the way to a final administrative determination. Here, in proceedings in the Tribunal between parties in which allegations are made by the Commissioner, including necessarily the examinability of an agreement or a practice alleged against the other parties, the Tribunal is required, as the first step in the proceeding and in accordance with criteria laid down in the Act, to reach a conclusion whether it is satisfied "that an examinable agreement exists or has existed, or an examinable practice has been, is being, or is proposed to be engaged in" by the parties against whom the allegation is made. If the Tribunal is not so satisfied, that would be the end of the proceedings. If the Tribunal is so satisfied, it goes on to determine, in accordance with its opinion, the question of public interest referred to in s. 49 (1) (b). (at p387)

26. I have come to the conclusion that, in finding to its satisfaction the matters referred to in the opening words of s. 49 (1) and by the determination which it makes recording that finding, s. 49 (1) (a), or by refraining from making such findings and so putting an end to the proceedings before it, the Tribunal would be exercising judicial power. In short, the legislature has, as it seems to me, prescribed a judicial process as an essential part of the proceedings before the Tribunal. That part of its decision which relates to examinable agreements or practices is not merely a determination by the Tribunal, in the exercise of its discretion, that an agreement or practice should be examined ; it is rather a decision that it is satisfied that an agreement or practice is what the Act defines as an examinable agreement or practice ; that decision has, as I have shown, legal consequences. In my opinion, in discharging its task pursuant to s. 49 of the Act, the Tribunal would be exercising judicial power. (at p388)

27. Although the decision which I have just expressed concludes the matter in favour of the prosecutor, I should, perhaps, say that, had I decided otherwise, I would not have been satisfied that the making of a restraining order under s. 52 or s. 54 of the Act would be the exercise of judicial power. An order made under one or other of those sections is not an order based upon an ascertainment of facts and law in accordance with the Act ; rather it is an order preventing the exercise or enforcement of existing rights, or, against entering into new agreements or practices of a like character. I think such an order would lack the quality of a judicial order. Its making constitutes part of a legislative scheme for destroying existing rights and for preventing the creation in the future of rights of a like character. To me the decisive consideration about such an order is not that the Tribunal cannot itself enforce it - that is not decisive - it is rather that an order is part of a procedure, not being in itself essentially judicial, for changing existing rights and obligations. However, as I regard s. 49 as invalidly attempting to confer judicial power to make a determination, there can be no determination and therefore no order thereon. (at p388)

28. In my opinion prohibition should go. (at p388)

WINDEYER J. This case is a challenge to the validity of the Trade Practices Act 1965-1968 of the Commonwealth Parliament. The attack is mounted on a narrow front and concentrated upon one objective, the Trade Practices Tribunal set up by Pt II (ss. 9-22) of the Act. (at p388)

2. The judicial power of the Commonwealth is vested in courts : and the judges of courts created by the Commonwealth Parliament must hold office during good behaviour. It is now firmly established that this means that members of federal courts exercising the judicial power are to be appointed for life. The Restrictive Practices Tribunal does not meet this requirement. Section II of the Act provides that "a member holds office for such period not exceeding seven years as is specified in the instrument of his appointment". Therefore, if the Tribunal is to exercise the judicial power of the Commonwealth, it is not validly set up. Levering on this as the point d'appui the prosecutor sought to loosen the whole scheme and bring the statute down. No other ground of invalidity is asserted in these proceedings. The point of attack is limited in this way because the events from which the case arises occurred in Tasmania : and the Parliament of that State has, by Act No. 62 of 1966, referred to the Parliament of the Commonwealth power to deal with certain matters which may be compendiously called restrictive trade practices. There is therefore in this case no room for any question of the power of the Commonwealth Parliament to make a law to operate in Tasmania with respect to restrictive practices. The critical question is thus whether the Act purports to vest in the Tribunal the judicial power of the Commonwealth within the meaning of that term in s. 71. (at p389)

3. One must not, I think, start by asking what is a judicial function, but what is meant by "the judicial power of the Commonwealth". The words bring at once to mind the political doctrine of the separation of powers. The place this has in our Constitution, or rather its place behind the words of the Constitution, has been the happy hunting ground of learned commentators. I do not propose to follow them far. I mention, because I have found it helpful, the succint discussion, with references to other works, by Professors Friedmann and Benjafield in their book, Australian Administrative Law, 2nd ed. (1962), Ch. III. The pure or strict concept of the separation of powers assumes that the functions of government may be divided between three distinct branches or departments. It then insists that these should be performed by separate organs - the legislature, the executive and the judicature. Each organ should keep to its proper field and not encroach upon other fields. To secure this the same persons must not at any one time compose, or exercise the functions of, more than one organ of government - that is to say a separation of personnel is necessary for an effective separation of powers. This last requisite cannot exist in relation to the executive and the legislature where, as in Australia, the British system of responsible government prevails ; for ministers of the Crown not only may be, but must be, members of Parliament. The doctrine of the separation of powers, in its original form, has no place in our constitutional law. In the joint judgment of Dixon C.J., McTiernan, Fullagar and Kitto JJ. in the Boilermakers' Case (Reg. v. Kirby ; Ex parte Boilermakers' Society of Australia) (1956) 94 CLR 254, at p 275 , their Honours said :

"Probably the most striking achievement of the framers of the Australian instrument of government was the successful combination of the British system of parliamentary government containing an executive responsible to the legislature with American federalism":

and they went on :

"The fact that responsible government is the central feature of the Australian constitutional system makes it correct enough to say that we have not adopted the American theory of the separation of powers."

But that does not mean that the separation of powers has no place in our system. Indeed it is well-recognized dogma for us that the judicial power is to be exercised separately from the exercise of the other two powers, and by different people. This is a necessity of our written constitutional law as well as a compelling part of our inheritance of the British tradition of the independence of the judges. (at p390)

4. Today political philosophers often prefer the term "functions" of government to "powers", when discussing the doctrine of the separation of powers, which is, of course, the classic phrase. The word "powers" can no doubt be misleading. So can the word "functions". The phrase "the judicial power of the Commonwealth" predicates not merely a capacity for adjudication, but the authoritative character, the binding consequences and the indirectly coercive effect of adjudication by a court. It began, I assume, as a translation into English of Montesquieu's doctrine as expressed in L'Esprit des Lois. In Ch. vi of Book xi, he spoke of "pouvoirs" and also of "puissance". The sentence which is ordinarily translated "Again there is no liberty if the judicial power is not separated from the legislative and executive power" is originally "Il n'y a point encore de liberte si la puissance de juger n'est pas separee de la puissance legislative et de l'executrice". "Puissance" or "pouvoirs", the judicial power of the Commonwealth, is the judicial function of the Commonwealth as an attribute of sovereignty, exercisable by the organs to which it is constitutionally committed. Every Commonwealth official who, in the course of administrative duties, has to decide some incidental question does not thereby exercise the judicial power of the Commonwealth. I shall return to this later. I want first to look at some matters which are the background of s. 71. (at p391)

5. Lord Simonds, delivering the judgment of their Lordships in the Privy Council in the Boilermakers' Case (Attorney-General (Aust.) v. The Queen and the Boilermakers' Society of Australia), (1957) AC 288, at p 311; (1957) 95 CLR 529, at p 537 said:

"That the Constitution is based upon a separation of the functions of government is clearly to be seen in its structure, which closely follows the model of the American Constitution."

Later he said (1957) AC, at pp 312, 313; (1957) 95 CLR, at pp 537, 538 :

"But enough has been said to suggest that in the absence of any contrary provision the principle of the separation of powers is embodied in the Constitution. Section 1, which vests legislative power in a federal parliament, at the same time negatives such power being vested in any other body. In the same way s. 71 and the succeeding sections, while affirmatively prescribing in what courts the judicial power of the Commonwealth may be vested and the limits of their jurisdiction, negatives the possibility of vesting such power in other courts or extending their jurisdiction beyond those limits. It is to Ch. III alone that the parliament must have recourse if it wishes to legislate in regard to the judicial power. That chapter is in its terms detailed and exhaustive, and their Lordships dissent from the contention sometimes explicitly, sometimes implicitly, advanced that, inasmuch as there is no express prohibition of other legislation in this field, it is open to the parliament to turn from Ch. III to some other source of power."

Later again he said (1957) AC, at p 314; (1957) 95 CLR, at pp 539, 540 :

"In the first place it has been a matter of somewhat theoretical controversy how far the Constitution embodies the doctrine of separation of powers. It is a doctrine, said Williams J., which should be applied 'with great circumspection'. Their Lordships do not dissent, but must bear in mind how often it has been stated in the High Court that the Constitution is based upon a separation of the functions of government. One among many examples may be found in New South Wales v. The Commonwealth (the Wheat Case) (1915) 20 C.L.R. 54, at p. 88. But, first and last, the question is one of construction and they doubt whether, had Locke and Montesquieu never lived nor the Constitution of the United States ever been framed, a different interpretation of the Constitution of the Commonwealth could validly have been reached." (at p391)

6. The last sentence is a reminder that our task is one of construing the Constitution as it stands. Yet I find it impossible to do this on the assumption that Montesquieu had never lived - I say nothing as to Locke - or that those who framed our Constitution did not copy s. 71 from s. 1 of Art. III of the Constitution of the United States. We know that they did. In Reg. v. Davison (1954) 90 CLR, at pp 380-381 , Kitto J. said:

"It is well to remember that the framers of the Constitution, in distributing the functions of government amongst separate organs, were giving effect to a doctrine which was not a product of abstract reasoning alone, and was not based upon precise definitions of the terms employed."

With that I entirely agree. The important fact is that the phrase "the judicial power of the Commonwealth" in s. 71 of the Constitution is derived from America, where it got its meaning from Montesquieu's political dogma. Whether or not Montesquieu had originated that dogma, it was from his writing that it became esteemed as a guarantee of civil liberty. He based it upon a view of English institutions of the eighteenth century, and related it to the idea of checks and balances as factors in the preservation of civil liberty. How far his conclusion was justly based on English institutions of his day has been questioned. Holmes J. called it "a fiction invented by him, a fiction which misled Blackstone and De Lolme". The validity of this need not trouble us; but I cannot forbear from quoting Pollock's comment in a letter to Holmes : "It is true that the English Constitution does not lend itself to formulas. But as formulas go I don't think Montesquieu was far out in the middle of the 18th century" : Holmes-Pollock Letters, vol. 2, p. 265. And see Holdsworth, History of English Law, vol. 10, pp. 713-724, noting in particular the statement (at p. 721) :

"This division of powers, which checked and balanced one another, did make tyranny impossible. The main faults of Montesquieu's theory were that it exaggerated the sharpness of the separation ; and that it failed to bring out the fact that it was the autonomy in the action and in the development of these divided, though not quite separated powers, which, by enabling them to check and balance one another, was the guarantee of liberty." (at p392)

7. The importance and influence of the theory at the time when the Constitution of the United States was under consideration, before its final adoption, is manifest in The Federalist, Number 47, which was written by Madison. Story, writing in 1833 when he was Dane Professor of Law at Harvard, said in the chapter on the Judiciary in his Commentaries on the Constitution that :

"No remark is better founded in human experience than that of Montesquieu that 'there is no liberty if the judiciary power be not separated from the legislative and executive powers'."

Montesquieu's theory is an important chapter in constitutional history and political philosophy ; but for present purposes its past is irrelevant, for it is now embodied in the written words of the Australian Constitution. To these I turn, mentioning in passing two recent books that I have found helpful in putting the theory of the separation of powers in its proper place in constitutional law today. They are : W. B. Gwyn, The Meaning of the Separation of Powers, an analysis of the doctrine from its origin to the adoption of the United States Constitution (1965); M.J. C. Vile, Constitutionalism and the Separation of Powers (1967). (at p393)

8. Section 71 of the Constitution provides that :

"The judicial power of the Commonwealth shall be vested in a Federal Supreme Court, to be called the High Court of Australia, and in such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction. . . ."

The question is how the idea which is embodied in the brief phrase "the judicial power of the Commonwealth", read against its historic background, is to be understood today. This question is far removed from an inquiry whether an official or statutory body exercises a judicial function or is required to act in a judicial manner. That is a question which often arises in other fields of law, especially in connexion with the supervisory jurisdiction that, by means of writs of certiorari and prohibition, superior courts can exercise over the proceedings of administrative bodies. This topic has become in recent times of outstanding importance. A useful starting point for consideration of it are the articles "Administrative Tribunals and the Courts" in the Law Quarterly Review, vol. 49 (1933), pp. 94-120 and 419-442. But much has been written since then, stimulated by the Report of the Committee on Ministers' Powers. There are numerous references and a somewhat iconoclastic discussion of the topic in Doctor S. A. de Smith's book, Judicial Review of Administrative Action, pp. 34-50. Much of the learning there assembled is beside the point for present purposes, except as a caution against straying. We are not here concerned with the nature of the judicial process but with the nature of the judicial power. A body whose primary purpose is administrative does not become a court merely because it must act judicially. (at p394)

9. In Reg. v. Davison (1954) 90 CLR, at p 366 Dixon C.J. and McTiernan J. said: "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." Their Honours went on to discuss attempts made in earlier cases, including some from the United States of America. They referred to a paper by Dean Pound, and remarked that "the learned writer places more reliance in all matters of judicial power upon history than upon juristic analysis". There have nevertheless been important essays in describing, if not precisely defining, the nature of the judicial power. As I read them none provides a touchstone for all cases that arise, but they furnish guidance. Lord Guest and Lord Devlin in 1968, in a dissenting judgment in a case in the Privy Council to which I shall refer later, said :

17. In my opinion the order nisi should be discharged. (at p417)

Orders

Order nisi for prohibition discharged with costs.