Residual Assco Group Ltd v Spalvins

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HIGH COURT OF AUSTRALIA

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

RESIDUAL ASSCO GROUP LIMITED  PLAINTIFF

AND

JANIS GUNARS SPALVINS & ORS  DEFENDANTS

Residual Assco Group Limited v Spalvins [2000] HCA 33
Date of Order:  25 May 2000
Date of Publication of Reasons:  13 June 2000
A5/2000

ORDER

  1. The questions in the case stated are answered as follows:

1.Are s 11 of the Federal Courts (State Jurisdiction) Act 1999 (SA) and rule 123A.05 of the Rules of the Supreme Court of South Australia invalid?

Answer:No.

2.Are any one or more (and, if so, which) of ss 6, 7, 8 and 10 of the Federal Courts (State Jurisdiction) Act 1999 (SA) invalid?

Answer:Unnecessary to answer.

3.If any of ss 6, 7, 8, 10 or 11 of the Federal Courts (State Jurisdiction) Act 1999 (SA) be invalid, as a consequence thereof, is any other provision thereof (and, if so, which) invalid?

Answer:Unnecessary to answer.

  1. The first, second and third defendants must pay the plaintiff's costs of the case stated.

  1. Any other questions of costs in this Court are reserved for the consideration of the single Justice making orders consequential upon the answers to the questions reserved.

2.

Representation:

R J Whitington QC with M F Blue and A L McCartney for the plaintiff (instructed by Australian Securities and Investments Commission)

D F Jackson QC with A J Besanko QC and S B Lloyd for the first defendant (instructed by Thomson Playford)

D F Jackson QC with A J Besanko QC and S B Lloyd for the second and third defendants (instructed by Finlaysons)

No appearance for the fourth, fifth, sixth and seventh defendants

Interveners:

S J Gageler with M A Perry and C J Horan intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor)

P A Keane QC, Solicitor-General of the State of Queensland with G R Cooper intervening on behalf of the Attorney-General of the State of Queensland (instructed by Crown Solicitor for the State of Queensland)

D Graham QC, Solicitor-General for the State of Victoria with P M Tate intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor)

R J Meadows QC, Solicitor-General for the State of Western Australia with R M Mitchell intervening on behalf of the Attorney-General for the State of Western Australia (instructed by Crown Solicitor for the State of Western Australia)

B M Selway QC, Solicitor-General for the State of South Australia with K L Kelly intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor for the State of South Australia)

M G Sexton SC, Solicitor-General for the State of New South Wales with M J Leeming intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor for the State of New South Wales)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

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Details
Case
[2000] HCA 33
Decision Date

CaseChat Overview and Summary

In the High Court of Australia, Residual Assco Group Limited (the plaintiff) brought proceedings against Mr Janis Spalvins and others (the defendants). The dispute arose from proceedings commenced in the Federal Court of Australia, which relied solely on the cross-vesting legislation for jurisdiction. Following the High Court's decision in *Re Wakim* that the cross-vesting legislation was invalid, South Australian legislation, the *Federal Courts (State Jurisdiction) Act 1999* (SA) (the State Act), and a corresponding rule of the Supreme Court of South Australia, were enacted to address the consequences of *Re Wakim*. The case was presented to the High Court by way of a case stated.

The primary legal issue before the High Court was the constitutional validity of section 11 of the State Act and rule 123A.05 of the Rules of the Supreme Court of South Australia. Section 11 of the State Act provided a mechanism for the Supreme Court of South Australia to treat a proceeding commenced in a federal court, in respect of which that federal court had made an order that it had no jurisdiction, as a proceeding in the Supreme Court. The Court was also asked to consider the validity of other provisions of the State Act, though it ultimately deemed this unnecessary.

The High Court, in a joint judgment, reasoned that section 11 of the State Act and rule 123A.05 were not invalid. The Court distinguished section 11 from other provisions of the State Act that dealt with "ineffective judgments," finding that section 11 operated independently and did not suffer from the constitutional infirmities identified in *Re Wakim*. The Court held that the enactment of the State Act and the rule was a valid exercise of State legislative power, designed to provide a procedural pathway for matters that had been before federal courts under the now-invalid cross-vesting legislation.

The Court answered the questions in the case stated, declaring that section 11 of the *Federal Courts (State Jurisdiction) Act 1999* (SA) and rule 123A.05 of the Rules of the Supreme Court of South Australia were not invalid. The Court also ordered that the defendants pay the plaintiff's costs of the case stated, reserving other costs for a single Justice.

Orders

Orders of the court

1.

The questions in the case stated are answered as follows:

1. Are s 11 of the Federal Courts (State Jurisdiction) Act 1999 (SA) and rule 123A.05 of the Rules of the Supreme Court of South Australia invalid?

Answer: No.

2. Are any one or more (and, if so, which) of ss 6, 7, 8 and 10 of the Federal Courts (State Jurisdiction) Act 1999 (SA) invalid?

Answer: Unnecessary to answer.

3. If any of ss 6, 7, 8, 10 or 11 of the Federal Courts (State Jurisdiction) Act 1999 (SA) be invalid, as a consequence thereof, is any other provision thereof (and, if so, which) invalid?

Answer: Unnecessary to answer.

2.

The first, second and third defendants must pay the plaintiff's costs of the case stated.

3.

Any other questions of costs in this Court are reserved for the consideration of the single Justice making orders consequential upon the answers to the questions reserved.

2.

Background

Background to the litigation

I dissented from the decision[20]. I remain of the view which I expressed. However, the Court having spoken, it was not open to the governments and parliaments of Australia to ignore the effect of the change in the law following the earlier decision in Gould v Brown[21]. Nor may I ignore what has happened. I cannot treat the decision of the Court as "legally non-existent"[22]. Under our Constitution, court decisions, and the orders giving effect to them, have an authority derived from the powers and functions of the courts that pronounce them. This extends to cases where the decisions and orders give effect to an opinion about the unconstitutionality of specified legislation. Recognition of this fact is important for one of the key questions in these proceedings. [20]Re Wakim (1999) 73 ALJR 839 at 876-890; 163 ALR 270 at 321-340.[21](1998) 193 CLR 346.[22]Calvin v Carr [1980] AC 574 at 590 per Lord Wilberforce.The facts and applicable legislation In April 1994 in the Federal Court of Australia ("the Federal Court") Residual Assco Group Limited ("the plaintiff") commenced proceedings against Mr Janis Spalvins and a number of other persons. The proceedings purported to invoke the jurisdiction of the Federal Court in respect of a "State matter"[23]. It is common ground that the only basis for the jurisdiction of the Federal Court in the proceedings was that purportedly given by the cross-vesting legislation[24]. Over a period of five years the Federal Court made various interlocutory orders. The last of these was made on 11 June 1999 when the plaintiff was granted leave to further amend its statement of claim. Six days later, in Re Wakim, this Court held that the provisions of the cross-vesting legislation purporting to vest State jurisdiction in federal courts, and of federal law purporting to consent to such vesting, were invalid under the Constitution.[23]As defined in Federal Courts (State Jurisdiction) Act 1999 (SA) (hereafter "the State Act"), s 3.[24]Jurisdiction of Courts (Cross-vesting) Act 1987 (SA), s 4(1). In response to the decision in Re Wakim, legislation was enacted by each of the States of Australia in an attempt to palliate the potentially devastating blow dealt to litigants in federal courts[25]. Such legislation followed a substantially identical template. There are some minor differences[26]. There are no relevant differences in the section which is principally in issue in these proceedings[27]. [25]Federal Courts (State Jurisdiction) Act 1999 (NSW), (Vic), (Q), (SA), (WA), (Tas).[26]For example s 6(a)(ii) of the New South Wales and Tasmanian Acts when compared to s 6(a)(ii) of the South Australian Act.[27]s 11. The Western Australian Act, in s 11(3), makes special provision in relation to the Family Court of Western Australia, a State court capable of exercising both State and federal jurisdiction, but is otherwise identical with the template. It was common ground that, apart from the provisions of the cross-vesting legislation found to have been invalid, the plaintiff's claim would properly have been within the jurisdiction of the courts of South Australia, relevantly the Supreme Court of that State ("the Supreme Court"). In South Australia, the statute, the validity of which is now in question, is the State Act. Consequent upon the enactment of that Act, the Rules of the Supreme Court of South Australia were enlarged by the making of r 123A.05[28]. [28]Set out in the reasons of Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ (hereafter "the joint reasons") at [5].

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

HUGH, GUMMOW, HAYNE AND CALLINAN JJ KIRBY J (dissent)
It is unnecessary to express any conclusions concerning the validity of other provisions of the State Act, particularly ss 6, 7, 8, 10 and 12. Even if one or more or some part of those provisions is invalid, that cannot affect the validity of s 11. The provisions of ss 6, 7, 8, 10 and 12 of the State Act declare rights and liabilities not by reference to "relevant orders" (as does s 11) but by reference to [14]Section 3 states "'ineffective judgment' has the meaning given by section 4". Section 4 states:"(1) A reference in this Act to an 'ineffective judgment' is a reference to a judgment of a federal court in a State matter given or recorded, before the commencement of this section, in the purported exercise of jurisdiction purporting to have been conferred on the federal court by a relevant State Act.(2)If –(a)a Full Court of the Federal Court of Australia in its appellate jurisdiction has purported to affirm, reverse or vary an ineffective judgment; or(b)the Full Court of the Family Court of Australia has purported to affirm, reverse or vary an ineffective judgment,a reference in this Act to the ineffective judgment is a reference to the ineffective judgment in the form in which, and to the extent to which, it purports or purported to have effect from time to time.""ineffective judgments" of a federal court[14]. They stand in a different category to s 11 which provides for the commencement of proceedings in the Supreme Court of South Australia in cases relating to State matters where a federal court has held that it has no jurisdiction to deal with the proceedings.Orders It is for these reasons that we joined in the order that the questions in the case stated be answered as follows:Question 1: Are s 11 of the Federal Courts (State Jurisdiction) Act 1999 (SA) and r 123A.05 of the Rules of the Supreme Court of South Australia invalid? No.Question 2: Are any one or more (and, if so, which) of ss 6, 7, 8 and 10 of the Federal Courts (State Jurisdiction) Act 1999 (SA) invalid? Unnecessary to answer.Question 3: If any of ss 6, 7, 8, 10 or 11 of the Federal Courts (State Jurisdiction) Act 1999 (SA) be invalid, as a consequence thereof, is any other provision thereof (and, if so, which) invalid? Unnecessary to answer.and joined in the orders that the first, second and third defendants pay the plaintiff's costs of the case stated, any other questions of costs in this Court being reserved to the Justice making orders consequential upon the answers to the case stated. This case stated for the opinion of the Court[15] presents a number of puzzles demanding judgment about the requirements of the Constitution[16]. The puzzles arise in the aftermath of legislation enacted following the decision in Re Wakim; Ex parte McNally[17] (hereafter "Re Wakim"). That decision held that key provisions of federal[18] and State[19] cross-vesting legislation were unconstitutional. [15]By order of Gummow J, 28 February 2000.[16]Post, "Justice for Scalia", cited in Zlotnik, "Justice Scalia and His Critics: An Exploration of Scalia's Fidelity to His Constitutional Methodology", (1999) 48 Emory Law Journal 1377 at 1428.[17](1999) 73 ALJR 839; 163 ALR 270.[18]Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth). See Re Wakim (1999) 73 ALJR 839 at 879; 163 ALR 270 at 325-256.[19]Relevantly, Jurisdiction of Courts (Cross-vesting) Act 1987 (SA).

Ratio Decidendi

Legal Principle Established

Established by: HUGH, GUMMOW, HAYNE AND CALLINAN JJ,

Full text does not contain this section.