Re Macks; Ex parte Saint

Case [2000] HCA 62

HIGH COURT OF AUSTRALIA

GLEESON CJ,
GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJ

Matter No A6/2000

RE PETER IVAN MACKS & ORS  RESPONDENTS

EX PARTE ANTHONY JOHN SAINT  APPLICANT

Matter No A9/2000

RE PETER IVAN MACKS & ORS  RESPONDENTS

EX PARTE ANTHONY FRANCIS JOHNSON & ORS     APPLICANTS

Re Macks; Ex parte Saint [2000] HCA 62
Re Macks; Ex parte Johnson
7 December 2000
A6/2000 and A9/2000

ORDER

1.   Order that time for the making of the applications for writs of certiorari be extended.

2.   Order absolute in the first instance for a writ of certiorari to  quash the order of Registrar Carey of 13 June 1995 in proceedings SG3057 of 1995 in the Federal Court of Australia, ordering the winding up in insolvency and the appointment of the first-named eighth respondent as liquidator in respect of one of the companies in the group of companies comprising the second-named eighth respondents.

3.   Order absolute in the first instance for a writ of certiorari to  quash the orders of Registrar Fisher of 20 June 1995, in proceedings SG3074, SG3075, SG3076, SG3077, SG3078 and SG3079 of 1995 in the Federal Court of Australia, ordering the winding up in insolvency and the appointment of the first-named eighth respondent as liquidator in respect of six of the companies in the group of companies comprising the second-named eighth respondents.

4. Order absolute in the first instance for a writ of certiorari to quash the orders of O'Loughlin J of 30 August 1995, von Doussa J of 19 December 1995, and Branson J of 21 December 1995 and 24 January 1996, in proceedings SG3080 of 1995 in the Federal Court of Australia, ordering the winding up in insolvency and the appointment of the first-named eighth respondent as liquidator in respect of 54 of the companies in the group of companies comprising the second-named eighth respondents, and declaring void pursuant to s 445G(2) of the Corporations Law any deed of company arrangement entered into by any of those companies.

5.   Order absolute in the first instance for a writ of certiorari to  quash the order of Registrar Carey of 15 August 1995, in proceedings SG3124 of 1995 in the Federal Court of Australia, ordering the winding up in insolvency and the appointment of the first-named eighth respondent as liquidator in respect of one of the companies in the group of companies comprising the second-named eighth respondents.

6. Order absolute in the first instance for a writ of certiorari to quash the order of Mansfield J of 8 December 1998 in proceedings SG3080 of 1995 in the Federal Court of Australia, ordering that the first-named eighth respondent, as liquidator of all 64 companies in the group of companies comprising the second-named eighth respondents, had power under the Corporations Law to enter into the funding arrangement with the Commonwealth Bank of Australia and GIO Insurance Ltd.

7.   Liberty to apply on 21 days notice to a single Justice for the making of an order for a writ of certiorari…

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Re Macks; Ex parte Saint [2000] HCA 62
Case
[2000] HCA 62
Decision Date

CaseChat Overview and Summary

The High Court of Australia considered applications for writs of certiorari brought by parties affected by orders made by the Federal Court of Australia. The dispute arose because the Federal Court had made numerous winding-up orders and appointed liquidators to a group of companies, purportedly acting under jurisdiction conferred by cross-vesting legislation. However, subsequent High Court decisions, notably *Re Wakim*, had declared this cross-vesting legislation invalid, meaning the Federal Court had acted without jurisdiction when making these orders. The applicants sought to quash these orders, while also contending with the validity and effect of remedial State legislation enacted to preserve rights and liabilities determined by such ineffective Federal Court judgments.

The central legal issues before the High Court were whether the State legislation, which sought to preserve the legal effect of judgments made by the Federal Court without jurisdiction, was inconsistent with Commonwealth legislation, particularly the *Federal Court of Australia Act 1976* (Cth) and the *Judiciary Act 1903* (Cth). The Court also had to determine whether these State laws, by purporting to give effect to or provide a framework for dealing with judgments made without jurisdiction, were invalid under Chapter III of the Constitution, either by conferring incompatible jurisdiction on State courts or by being repugnant to federal judicial power. Finally, the Court considered whether to extend time for the applications for certiorari and whether such writs should issue to quash the Federal Court's orders.

The High Court reasoned that while the Federal Court's orders were made without jurisdiction and were therefore invalid, they were not nullities in the sense that the Federal Court had jurisdiction to determine, even erroneously, that it possessed jurisdiction under the purported Commonwealth law. The Court held that the State legislation, which created a fresh set of rights and liabilities by reference to these ineffective Federal Court orders without directly interfering with them, was valid. It found no inconsistency under section 109 of the Constitution because the Commonwealth Parliament could not legislate to make orders made without jurisdiction binding. Furthermore, the State Supreme Courts, when dealing with these matters under the State legislation, would be exercising federal jurisdiction conferred by the *Judiciary Act*, meaning their determinations would not create a section 109 inconsistency. The Court also determined that the definition of "ineffective judgment" in the State legislation encompassed judgments made without jurisdiction, regardless of whether they had been set aside.

The High Court ordered that time for the applications for writs of certiorari be extended and made the orders absolute, quashing the various winding-up orders and related decisions made by the Federal Court. Applications for writs of prohibition were dismissed, and costs were awarded to certain respondents.

Orders

Orders of the court

1. Order that time for the making of the applications for writs of certiorari be extended.

2. Order absolute in the first instance for a writ of certiorari to quash the order of Registrar Carey of 13 June 1995 in proceedings SG3057 of 1995 in the Federal Court of Australia, ordering the winding up in insolvency and the appointment of the first-named eighth respondent as liquidator in respect of one of the companies in the group of companies comprising the second-named eighth respondents.

3. Order absolute in the first instance for a writ of certiorari to quash the orders of Registrar Fisher of 20 June 1995, in proceedings SG3074, SG3075, SG3076, SG3077, SG3078 and SG3079 of 1995 in the Federal Court of Australia, ordering the winding up in insolvency and the appointment of the first-named eighth respondent as liquidator in respect of six of the companies in the group of companies comprising the second-named eighth respondents.

4. Order absolute in the first instance for a writ of certiorari to quash the orders of O'Loughlin J of 30 August 1995, von Doussa J of 19 December 1995, and Branson J of 21 December 1995 and 24 January 1996, in proceedings SG3080 of 1995 in the Federal Court of Australia, ordering the winding up in insolvency and the appointment of the first-named eighth respondent as liquidator in respect of 54 of the companies in the group of companies comprising the second-named eighth respondents, and declaring void pursuant to s 445G(2) of the Corporations Law any deed of company arrangement entered into by any of those companies.

5. Order absolute in the first instance for a writ of certiorari to quash the order of Registrar Carey of 15 August 1995, in proceedings SG3124 of 1995 in the Federal Court of Australia, ordering the winding up in insolvency and the appointment of the first-named eighth respondent as liquidator in respect of one of the companies in the group of companies comprising the second-named eighth respondents.

6. Order absolute in the first instance for a writ of certiorari to quash the order of Mansfield J of 8 December 1998 in proceedings SG3080 of 1995 in the Federal Court of Australia, ordering that the first-named eighth respondent, as liquidator of all 64 companies in the group of companies comprising the second-named eighth respondents, had power under the Corporations Law to enter into the funding arrangement with the Commonwealth Bank of Australia and GIO Insurance Ltd.

7. Liberty to apply on 21 days notice to a single Justice for the making of an order for a writ of certiorari to quash the order of O'Loughlin J of 31 July 1995 in proceedings SG3050 of 1995 in the Federal Court of Australia ordering the winding up in insolvency and the appointment of the first-named eighth respondent as liquidator in respect of one of the companies in the group of companies comprising the second-named eighth respondents.

8. Applications for writs of prohibition dismissed.

9. In Matter A6 of 2000, applicant to pay the costs of the first‑named eighth respondent and of the ninth respondent.

10. In Matter A9 of 2000, applicants to pay the costs of the first‑named eighth respondent and of the ninth respondent.

Background

Background to the litigation

In my opinion, the impugned State legislation is valid. The invalid orders of the Federal Court are not nullities because that Court had jurisdiction to determine – even erroneously – that it had jurisdiction under a purported law of the Parliament. Nevertheless, the law of the Commonwealth authorising the making of the orders does not render inoperative the State legislation which created a fresh set of rights and liabilities by reference to, but without interfering with, those orders. The Parliament of the Commonwealth can only make laws within the powers assigned to it by the Constitution. If the Parliament has no power to give a federal court jurisdiction to make orders with respect to a subject matter, it cannot make a law that a federal court order with respect to that subject matter is binding until set aside. That being so, there is no conflict between the State legislation and the invalid orders of the Federal Court. Furthermore, although the State Supreme Court must determine whether an order of the Federal Court is valid or effective, it does so in the exercise of federal jurisdiction conferred by the Judiciary Act 1903 (Cth) ("the Judiciary Act"). Any determination that it makes is therefore made under a federal statute and the findings or orders of the State Supreme Court cannot raise any question of s 109 inconsistency – direct or operational.The factual background The facts which led to the Federal Court making various winding up orders, orders appointing Mr Macks as liquidator of certain companies, and an order that Mr Macks had power under the Corporations Law to enter into a funding arrangement ("the relevant orders") are summarised in the reasons of Hayne and Callinan JJ. In June 1999, this Court delivered its reasons and orders in Re Wakim. Relevantly, the Court held that s 9(2) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) and s 56(2) of the Corporations Act 1989 (Cth) ("the cross-vesting legislation") were invalid. It is clear that the relevant orders were made by the Federal Court pursuant to the purported conferral of jurisdiction under the cross-vesting legislation and that they were made without jurisdiction. They were also all made before this Court delivered its reasons and orders in Re Wakim. On 19 August 1999, the Federal Courts (State Jurisdiction) Act 1999 (SA) ("the State Act") came into effect. The other States have enacted largely identical legislation. The State Act is remedial legislation directed at preserving the rights and liabilities of persons as they had been determined by the Federal Court[48] in proceedings before it, despite the Federal Court's lack of jurisdiction to determine those proceedings.[48]Or the Family Court – see definition of "federal court" in s 3 of the State Act. The scheme of the State Act It is convenient to give an outline of the scheme of the State Act and to give some indication of the interactions between groups of provisions before considering those provisions in more detail.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

GLEESON CJ GAUDRON J HUGH J
Because there is direct inconsistency between, on the one hand, s 6, to the extent that it allows for the "right of appeal" elaborated in s 7(2), and s 10 of the State Jurisdiction Acts and, on the other, s 5(2) of the Federal Court Act, it is necessary to consider whether the State Jurisdiction Acts can be read down to the extent that they are not inconsistent with that Act. For the purposes of this case, it is necessary to consider that question only in relation to the South Australian and Queensland State Jurisdiction Acts. Before turning to that question, however, it is convenient to consider whether, as the applicants contend, the State Jurisdiction Acts have no effect on the rights and liabilities of persons who are parties to a judgment or order that has been set aside on appeal or pursuant to s 75(v) of the Constitution.State Jurisdiction Acts: meaning of "ineffective judgment'' Because s 6 of the State Jurisdiction Acts confers rights and imposes liabilities by reference to an "ineffective judgment", the operation of those Acts is to be determined by the meaning of that term, the statutory definition of which is set out earlier in these reasons. For present purposes, it is sufficient to note that "ineffective judgment" is relevantly defined as "a judgment ... given or recorded ... in the purported exercise of jurisdiction purporting to have been conferred ... by a relevant State Act". It is a fundamental rule of construction that statutory definitions are to be read according to their terms and not as subject to limitations or qualifications which their terms do not require[43]. There is nothing in the definition of "ineffective judgment" which would confine its meaning to judgments which have not been set aside. On the contrary, the words "given or recorded" indicate that that definition is concerned with judgments which, as a matter of historical fact, have been given or recorded, and not simply those which subsist as a matter of law. Accordingly, in my view, the State Jurisdiction Acts operate with respect to ineffective judgments, whether or not they have been set aside.[43]See Owners of "Shin Kobe Maru" v Empire Shipping Co Inc (1994) 181 CLR 404 at 420-421. See also Australian Softwood Forests Pty Ltd v Attorney-General (NSW); Ex rel Corporate Affairs Commission (1981) 148 CLR 121 at 130 per Mason J; Slonim v Fellows (1984) 154 CLR 505 at 513 per Wilson J.State Jurisdiction Acts: reading down For present purposes, it is only necessary to consider whether the South Australian and Queensland State Jurisdiction Acts can be read down so as to operate to the extent that they are not inconsistent with the Federal Court Act. In this regard it should be noted that the Acts Interpretation Act 1915 (SA) relevantly provides, in s 13:" A statutory ... instrument ... will be read and construed ... so that, where a provision of the instrument, or the application of a provision of the instrument to any person or circumstances, is in excess of ... power, the remainder of the instrument, or the application of the provision to other persons and circumstances, is not affected."So, too, s 9(3) of the Acts Interpretation Act 1954 (Q) relevantly provides that:"... if the application of a provision of an Act to a person, matter or circumstance would, apart from this section, be interpreted as exceeding power, the provision's application to other persons, matters or circumstances is not affected."

Ratio Decidendi

Legal Principle Established

Established by: GLEESON CJ, GAUDRON J, HUGH J

Humby might be seen as the converse of the present case in that the legislation in issue there was Commonwealth legislation relating to purported decrees pronounced by State officers. But those differences do not suggest some different conclusion about inconsistency. What is important here, as it was in Humby, is that the rights created by the State Act are distinct from whatever may be the rights which flow from the Federal Court order and the State Acts do not seek to validate or vary the latter rights. We turn then to consider the arguments about possible operational inconsistency between the Acts.Operational inconsistency If application is made to a Supreme Court, whether by appeal, or in reliance upon the power given by s 10 of the State Jurisdiction Acts to vary, revoke, set aside, or suspend the rights or liabilities declared by s 6, the rights and liabilities which are then established on appeal or under s 10 may differ from those which were created by the order of the Federal Court. Because the only rights and liabilities which an appeal or s 10 application may affect are those created by the State Jurisdiction Act, not those created by the Federal Court order, there is no direct interference with those latter rights. As the order of the Federal Court has effect until it is set aside, however, there is the potential for inconsistency between the two Acts so long as that Federal Court order remains in force[361].[361]Victoria v The Commonwealth (1937) 58 CLR 618 at 631; Commonwealth v Western Australia (Mining Act Case) (1999) 196 CLR 392. The application of the State Acts, including the provisions governing appeal and variation, depends upon the identification of a Federal Court judgment as an "ineffective judgment". That could be said to invite attention by a Supreme Court, in an appeal under s 7 or application under s 10, to whether the Federal Court judgment was legally ineffective (for want of jurisdiction in the Federal Court). This would require examination of the basis upon which the Federal Court acted in the particular matter. If that was required, a State Supreme Court would, by s 39(2) of the Judiciary Act, have invested federal jurisdiction to consider the questions of constitutional interpretation which such an inquiry would present. Reading the definition of "ineffective judgment" in this way would, however, encounter some difficulties. First, for the reasons given earlier, the explicit or implicit conclusion of the Federal Court that it had jurisdiction in a matter would be binding on the parties to the matter until the order was set aside. That issue could not be re‑litigated in a State Supreme Court and the definition of "ineffective judgment" should not be read as requiring that to be done. Secondly, it is necessary to give full effect to the use in the definition of "ineffective judgment" of the words "purported" and "purporting" in the phrases "purported exercise of jurisdiction" and "purporting to have been conferred". The use of "purported" and "purporting" reveals that the validity of neither the exercise of jurisdiction, nor the conferral of jurisdiction, is a matter for inquiry in the Supreme Court. All that must be demonstrated is a historical fact: that there was an exercise of jurisdiction by the Federal Court which appears to have been founded in a relevant State Act.