Residual Assco Group Ltd v Spalvins
[2000] HCATrans 188
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Adelaide No A5 of 2000
B e t w e e n -
RESIDUAL ASSCO GROUP LIMITED
Plaintiff
and
JANIS GUNARS SPALVINS
First Defendant
MICHAEL JAMES KENT
Second Defendant
NEIL LESLIE BRANFORD
Third Defendant
KENNETH WILLIAM RUSSELL
Fourth Defendant
MICHAEL STEVENSON GREGG
Fifth Defendant
DELOITTE HASKINS & SELLS
Sixth Defendant
DELOITTE ROSS TOHMATSU
Seventh Defendant
GLEESON CJ
GAUDRON J
McHUGH J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON THURSDAY, 11 MAY 2000, AT 10.20 AM
(Continued from 10/5/00)
Copyright in the High Court of Australia
___________________
GLEESON CJ: Yes, Mr Solicitor.
MR GRAHAM: May it please the Court. Yesterday afternoon his Honour Justice McHugh referred us to Calvin v Carr and Crane v The Director of Public Prosecutions. We have had the advantage of looking at those cases overnight. Rather than take up time, may I simply give the Court the relevant page references which seem to be in point, namely page 321 in the judgment of Lord Atkinson, page 323 also in the judgment of Lord Atkinson, and page 331 in the judgment of Lord Sumner.
In Calvin v Carr – I should have given the Court the reference to the case, (1921) 2 AC 299; and Calvin v Carr 1980 AC at page 574, the relevant reference in that case is to be found in the pages 589 to 590 in the judgment of Lord Wilberforce. Lord Wilberforce also cited, in the course of his reasons, an earlier Australian case, perhaps which should be added to the group, that of Russell v Bates (1927) 40 CLR 209. The joint judgment of Chief Justice Knox and Justices Isaacs, Gavan Duffy, Powers, Rich and Starke at pages 213 to 214 contain an emphatic endorsement of what was said in Crane’s case and that view was shared by the remaining member of the Court, Justice Higgins.
It does lead one to say, however, that the use of the word “nullity” in contexts such as those cases may be one of those words which Chief Justice Brennan was prone to describe as a “weasel word” because its meaning and full content are not always the same and may vary according to the context in which it is used. I will give the Court those cases and hope that they may be of assistance.
One other matter that arose yesterday, your Honour Justice McHugh described the consequences of the view that a court was a superior court of record in relation to presumptions which arose in relation to the validity of their judgments. Perhaps I should add that another consequence of the court being ascribed the quality of a superior court is that, of course, the judges of that court are protected from proceedings being brought against them in the consequence of invalid judgments having been pronounced.
Could I take the Court next then to paragraph 43 of our first outline of submissions - that is to be found at page 15. And I say “first outline” because the Court, I hope, has received a short supplementary submission which was delivered to your Honours’ chambers last evening, though I regret to say that its provenance does not appear, on the face of it, and it is unsigned. But it is a supplementary submission on behalf of the Attorney for the State of Victoria.
At paragraphs 43 and following, we make the proposition that Federal Courts are superior courts but nonetheless they are, of course, courts of limited jurisdiction. One of your Honours yesterday said that that proposition may well be true even of this Court and, in a sense, we would say that must be so because the jurisdiction of this Court is that which may arise or be conferred under sections 73, 75 and 76 of the Constitution. Nonetheless section 5 of the High Court of Australia Act tells us that this Court is a superior court of record. But it cannot, with respect, be said that it is a court of unlimited jurisdiction.
We then go on to quote, we would respectfully say, as a helpful passage from the judgment of Justice Dawson in Reg v Gray; Ex parte Marsh (1985) 157 CLR 351 at 392 to 393. To that we would add a reference to the case which his Honour cites in that passage, which I will not read because it is set out in our written submission, a reference to the case of DMW v CGW (1982) 151 CLR 491 at 509 which has been referred to on several occasions in the course of this hearing. That has also a judgment of Justice Dawson. The reference, perhaps with respect to his Honour, ought to go to run into page 510 where further helpful observations are made in relation to the question of what follows from saying that a Federal Court is a superior court because, nonetheless, a Federal Court is created or exists by virtue of the powers vested in the Commonwealth Parliament by Chapter III and that jurisdiction which may thus be conferred is necessarily limited.
KIRBY J: I suppose it can now be said that there is no Australian court of unlimited jurisdiction since Federation or since the establishment of Federal Courts.
MR GRAHAM: With respect, that is so, and indeed that invites attention to the provisions of the Judiciary Act which take away jurisdiction of the State courts and reconfer it in the form of federal jurisdiction, but your Honour’s proposition probably goes further in the sense that courts of the States are in all cases now creates of statute and their jurisdiction is limited in various respects.
KIRBY J: Well, in New South Wales the statute continues the court as formerly established and I think that has been done in other States.
MR GRAHAM: Yes. Even though it is the practice in such statutes to confer jurisdiction, or certainly was in the past, by reference to the jurisdictions of the court at Westminster, nonetheless, it was a statutory grant of jurisdiction so far as the State courts were concerned.
KIRBY J: It is the residuum that they enjoy of the unlimited jurisdiction of royal courts.
MR GRAHAM: There is one further reference which I desire to give to the Court in this connection: the case of Re McJannet (1995) 184 CLR 620 was mentioned yesterday in passing. It was not on our list of authorities and we have supplied the Court with the first page and with the page at which a passage of some assistance in this field appears. That is at page 653 in the joint judgment of Justice Toohey and your Honours Justice McHugh and Gummow. It think that this might have been the case that your Honour Justice McHugh was referring to yesterday in very much this context. Could I just read the passage which is relevant, starting at point 2. The judgment says:
Accordingly, as Justice Deane pointed out in R v Gray; Ex parte Marsh, the amenability of a judge of a federal court to a writ of prohibition issued by this Court depends not upon the court of which the judge is a member being an “inferior” court but upon the jurisdiction conferred upon the court by the Parliament being limited.
Further, in respect of such a federal court, the power of the Parliament given by section 77 of the Constitution is to make laws “defining the jurisdiction” of the court “with respect to any of the matters” which are “mentioned” in ss 75 and 76. Accordingly, where the jurisdictional error is said to attract a remedy under ss 75(v) is that of judges of a federal court, “jurisdiction” is not simply a concept of the general law. It is a constitutional term.
GAUDRON J: Can I interrupt you there, Mr Solicitor, I am sorry? It would seem to me that a power to give judgments which are binding until set aside is an aspect of jurisdiction. Some courts have jurisdiction to do that and some courts do not. What is it that would require the reading down of the word “Defining” in section 77 so that the Parliament could not confer – and I think your argument has to go this far – jurisdiction to give final and binding decisions until set aside on appeal?
MR GRAHAM: We would not draw a distinction between the power conferred on a Federal Court to make findings as to facts upon which jurisdiction depends, which might be the subject of subsequent review on appeal, and such a power can be conferred, and a power conferred on a Federal Court which may be described as a power to determine the constitutional foundation upon which its jurisdiction depends, and we would say that the Parliament cannot give such a power. That would go beyond defining the ‑ ‑ ‑
GAUDRON J: You have to rely on the federal compact, do you, really, the nature of the federal compact, to say that the a Parliament may not define the jurisdiction of a Federal Court in such a way that its decisions are binding until set aside?
MR GRAHAM: We would, your Honour, in the second context that I postulated in answering your Honour’s question. It has been said over and over again and it was said in the passage that was quoted from the joint judgment in Re DMW yesterday, that jurisdiction can be conferred upon a court to determine the jurisdictional facts upon which its ability to exercise power is based. But I would respectfully submit it has never been submitted that a power could be conferred upon a Federal Court to make it an unchallengeable finding as to its ‑ ‑ ‑
GAUDRON J: Not an unchallengeable, but challengeable only in a certain way, that is by appeal.
MR GRAHAM: Or collateral attack.
GAUDRON J: Or under 75(v) as distinct from collateral attack.
MR GRAHAM: We would say that the power to define cannot go so far as to enable the Federal Court to make an order which has binding or any legal effect when the constitutional underpinning for such an order is lacking.
GAUDRON J: You say that because of the nature of the federal compact?
MR GRAHAM: Yes, your Honour.
GAUDRON J: But then you say, do you, that the State courts are similarly limited with respect to all matters or with respect only to matters of federal jurisdiction?
MR GRAHAM: I am having difficulty imagining an example of the first category, but it, perhaps, is not necessary to do so.
GAUDRON J: No, let us take a plain old grant of probate. There is no suggestion that Federal Courts can ever get involved in that. Now, when it comes to a grant of probate, do you say that the State court’s order of probate is final and binding until set aside by the appellate processes or do you say that it may be subject to collateral attack.
MR GRAHAM: We would say, your Honour, that in the example that your Honour gives that it is final and binding unless set aside on appeal.
GAUDRON J: Yes. But that the same would not be true of a judgment in federal jurisdiction?
MR GRAHAM: Logically that would follow from what we say, although, again, it is difficult to formulate an example, but we would say that is so.
GAUDRON J: Well you could formulate an example of a judgment given for the Commonwealth by a State court exercising federal jurisdiction with respect to a right purportedly conferred by an invalid statute. You would have to say that in any a judgment of that case, the judgment in the Supreme Court would be subject to collateral attack in any proceedings on the basis that the statute is unconstitutional, would you not?
MR GRAHAM: Your Honour, I would say that it was open to attack, although I hesitate to adopt what your Honour said concerning collateral attack because of the problems that the cases such as Murray and Cormie demonstrate as to whether you can have the collateral attack.
GAUDRON J: Well, exactly. But it must follow on your nullity proposition that a Federal Court’s decision is always subject to attack, but collateral attack.
MR GRAHAM: Because of section 75(v), yes.
GAUDRON J: Yes, but you ‑ ‑ ‑
McHUGH J: Justice Dawson in fact said it was subject to a collateral attack in the DMW Case at page 510.
MR GRAHAM: That is right, your Honour.
HAYNE J: But what form of collateral attack? Are you saying collateral attack as confined to 75(v), or are you extending it to other forms of collateral attack?
MR GRAHAM: I am not extending it to other forms because authority seems to show that those forms of collateral attack are not open, as against the Supreme Courts. That is why I hesitate ‑ ‑ ‑
HAYNE J: As against a Federal Court, though?
MR GRAHAM: Because of the existence of 75(v).
HAYNE J: So to take Justice Gaudron’s example of a suit in the Supreme Court for recovery of land by the Commonwealth, recovery being founded on an invalid statute for acquisition, there being no just terms, will action lie for trespass against those officers of the Commonwealth who seek to take possession of the land pursuant to the Court’s judgment, founded as it is ultimately in this hypothetically invalid statute?
MR GRAHAM: We would say, yes.
HAYNE J: And in a Federal Court, if you moved the dispute to a Federal Court, would action lie for trespass?
MR GRAHAM: Yes. It follows from the way in which we put the argument that that would be so. Could I move on, if the Court pleases, to the supplementary submission which was given to the Court last evening. Despite the somewhat formidable body of authority cited, I do not propose to take the Court to the cases listed in paragraph 1 in any detail, although I do wish to make two observations concerning Re Wakim.
It is our submission that it has been held by this Court that a finding that a statute is unconstitutional is that the statute is invalid ab initio, and its a nullity, unless there is the possibility of salvage under either the Acts Interpretation Act or severance.
GUMMOW J: It becomes a nullity through the exercise of the judicial power of the Commonwealth, does it? Someone decides that.
MR GRAHAM: With respect, we would take issue with your Honour’s choice of the word “becomes”. It is found to be, but it does not become to assume that quality.
GUMMOW J: But is not the theory that as between the parties to the litigation which has established this by way of declaration or what other leave there is, as between those parties, rights asserted under the invalid law do not exist and that if any other person has the temerity to take a different view and go off to court to test it again, the earlier decision will be followed? That is how it works.
MR GRAHAM: That is how it works, your Honour. But the ‑ ‑ ‑
GUMMOW J: It is the product of judicial power.
MR GRAHAM: Yes. I accept that, your Honour ‑ ‑ ‑
GUMMOW J: And the doctrine of precedent.
KIRBY J: But you take a point that it is more fundamental, that it did not have the authority in the Constitution. The courts say that, but it never had that authority.
MR GRAHAM: It never had ‑ ‑ ‑
GUMMOW J: Only the courts can say that and that is what Marbury v Madison is all about. It does not exist out there in the ether; it is only because the judicial power of the Commonwealth is invoked. Parliamentarians, citizens are not at liberty to regulate effectively their relations on any other basis.
MR GRAHAM: If I might say, your Honour, the bold citizen might take the view that the ‑ ‑ ‑
GUMMOW J: It goes to court.
MR GRAHAM: Or ignores it.
GUMMOW J: And is taken to court.
MR GRAHAM: And is taken to court, or ignores it at his peril if he is found to be wrong.
GUMMOW J: That is the grundnorm if we are trying to sit on that.
MR GRAHAM: I think there is no difference between your Honour and me on this point, it was perhaps just a matter of words. The second last citation in paragraph 1 is to Re Wakim and your Honour Justice McHugh’s judgment. We have given the page number and it would have been better, I think, if we had given the paragraph number. The paragraph number is paragraph [79]. If I could just remind the Court of what your Honour said there, without reading perhaps the whole of the paragraph:
As far as Mr Amann is concerned, I agree with Gummow and Hayne JJ that there is no basis upon which this court can properly refuse to issue a writ of prohibition. I am unable to agree, however, that the court should refuse prohibition to Mr Gould either on discretionary grounds or by reason of res judicata or issue estoppel. Those doctrines are common law doctrines. As this court made plain in Lange v Australian Broadcasting Corporation, the common law cannot be at odds with the Constitution and must conform with it. Notwithstanding our decision in Gould v Brown, which concerned Mr Gould, the court is now, by a substantial majority, of the opinion that the Corporations Act 1989 and the Corporations (New South Wales) Act 1990 cannot constitutionally invest State judicial power in the Federal Court of Australia. The orders made in Gould v Brown have no constitutional effect. For constitutional purposes, they are a nullity. No doctrine of res judicata or issue estoppel can prevail against the Constitution. Mr Gould is entitled to disregard the orders made in Gould v Brown. No doubt, as Latham CJ said of invalid legislation, “he will feel safer if he has a decision of a court in his favour”. –
which is perhaps what was in the back of your Honour Justice Gaudron’s mind a moment ago. But the starting point is that the statute is invalid. However, your Honour in paragraph [81], in a passage which perhaps I think your Honour may have been referring to yesterday in a slightly different context - - -
McHUGH J: Well, I know, and I backed and filled about this for years and I did it in Peters’ Case; I said the statute was void ab initio but nevertheless the authorities seem to show that the order is good until set aside and I went along with it.
MR GRAHAM: I am going to come to Peters’ Case in a few minutes, your Honour, but there is, if I may say with the greatest respect, a tension between what your Honour said in paragraph [79] and what your Honour finished by saying in paragraph [81].
McHUGH J: I know.
MR GRAHAM: On the other hand, your Honours Justices Gummow and Hayne, in paragraphs [164] and [165], took a slightly different view. It is in a passage which we would say, with greatest respect, is not without its own difficulties. If one picks up a few lines into paragraph [164], your Honours said:
But if prohibition goes to prohibit further steps under one of those orders – the order for winding up – a curious result would ensue: an order that the company be wound up by the court would stand, but no step could be taken in the Federal Court to give further effect to it. In our view, prohibition should issue to prohibit further steps in the Federal Court under the order for winding up.
Thereby achieving the curious result.
It was an order made without jurisdiction and further effect should not now be given to it by that court. Nevertheless, the order for winding up should not be quashed.
And your Honours in paragraph [165] gave some reasons as to why it was desirable to adopt that course. Eventually it was the course which the orders of the Court gave effect to.
If I may say so with great respect, it is entirely understandable that your Honours were concerned with what would happen if a winding-up order made some six years before, and no doubt acted upon by a liquidator in realising property, paying debts or parts of debts to creditors and sundry other things, should be set aside ab initio, certainly at a time when there could be no guarantee of legislation of the kind that we are considering in this case would be passed, but, nonetheless, we respectfully say that if the order for the winding up of Amann Aviation was made beyond jurisdiction, because the statues upon which the making of that winding-up order depended were invalid, then our submission is that the order of the Federal Court was invalid from the day it was pronounced.
In our supplementary submission we go on to look at the position in the United States and Canada, which has been the subject of some discussion already in this case, and we respectfully submit that the cases from those jurisdictions as to the effect of an unconstitutional statute upon orders previously made must be treated with great caution, because the jurisprudential context is quite different.
KIRBY J: Is the United States prospective overruling itself grounded in the notion in Marbury v Madison? Is it suggested that it is somehow the court that pronounces the constitutional flaw and, until that is done, there is still some validity or life in the order? I mean, if it is up to courts to do the trick, to make the statement, then, subject to the judicial power, the restraints of the structure of the Constitution, presumably they can do it prospectively, as distinct from, if the theoretical foundation is that if you do not have the power, it just has no legitimacy, no constitutional legitimacy, which is what I have always understood to be the case.
MR GRAHAM: I believe your Honour is correct and I would also believe that support for what your Honour has said is to be found in a learned textbook to which we give a reference in paragraph 2, that of Tribe, American Constitutional Law (2nd ed.).
McHUGH J: There is a new edition just out, a 3rd edition, volume 1.
GUMMOW J: That will disclose that since 1988, as we pointed out in Ha, is one of the reasons for not adopting it.
MR GRAHAM: Yes.
GUMMOW J: This prospective overruling doctrine in the United States is now effectively limited to crime.
MR GRAHAM: Although Chicot was not a criminal ‑ ‑ ‑
GUMMOW J: No, I am talking about a case decided in 1990. That is where the ball game is in the United States, now. Now, I would be assisted ‑ and we said all this in Ha.
MR GRAHAM: Yes, we have given a reference ‑ ‑ ‑
GUMMOW J: It is all there. It is a case called Hunter v Virginia, or something like that. Now, I would be assisted at some stage – in the 1980s there is a case called Northern Pipeline v Marathon Pipe 458 US 50 decided in 1982. The Supreme Court held invalid the Bankruptcy Court in the United States. Now, there must have been a fallout from that. An awful lot of people would have been bankrupt. I would be assisted if someone could tell me at some stage whether, as part of that fallout, there was any consideration in any of the cases of the Chicot doctrine or whether it was just assumed as so obvious that people did not go around re-agitating the question of validity of intervening bankruptcy.
MR GRAHAM: I cannot assist your Honour at this stage.
GUMMOW J: No, I understand that, but it does seem to me a useful analogy fairly close to home.
MR GRAHAM: Yes, it certainly does, your Honour. Chicot, itself, indicates that the original doctrine in the United States was that in Norton v Shelby County but it was that case and the cases which followed it which were, in effect, overruled in Chicot. At the top of page 2 of our submissions we have given the Court references to the relevant passages in Ha v New South Wales where both the majority and the minority took the view that the prospective overruling doctrine could not be adopted in this Court, consonant with the exercise of judicial power.
We also give reference to two further cases which have not been mentioned so far, Linkletter v Walker (1965) 381 US 618 and Stovall v Denno (1967) 388 US 293. Copies of those have been provided to the Court. They were both criminal cases and they amounted to collateral challenges to convictions based upon decisions of the United States Supreme Court, subsequent to appellants in those cases having been convicted and sentenced. Stovall v Denno is quite a startling case in the United States because the challenge was made by a person who had been convicted and was under sentence of death and who had been the subject of what might be called extraordinary procedural irregularities in the identification process. Nonetheless, the prospective overruling doctrine was invoked so as to deny Stovall any recourse.
Your Honours, so far as our researches go, are correct in saying that this doctrine seems to have its largest operation in the United States in the criminal field and that perhaps is the consequence of decisions such as Mapp and Escobedo and others arising from the Bill of Rights.
The second point that we make in suggesting that reliance upon North American authority is to be taken with, at least, great care was the decision of the Supreme Court of Canada in the case of Re Language Rights under the Manitoba Act 1870 (1985) 19 DLR (4th) 1. The Court may be familiar with this case which we would say with very great respect to that Court was an extraordinary case and it provides a background which does not exist or has never yet been held to exist in this country.
Could I then move to your Honour Justice McHugh’s judgment in Peters (1988) 16 NSWLR 24 about which we would seek to say something, court comprising your Honour Justice Kirby, Justice Mahoney and your Honour Justice McHugh. The passage that we quote in the written submission is a passage at page 40 of the report but it is perhaps useful to refer first to what your Honour said starting at page 38. I do not propose to read the whole passage but your Honour at page 38, starting between lines B and C, said:
The effect of an unconstitutional statute has not been authoritatively determined by the High Court. In South Australia v The Commonwealth…..Latham CJ said: “…The law is not valid until a court pronounces against it – and thereafter invalid. If it is beyond power it is invalid ab initio.”
The cases which we cite in paragraph 1 of the supplementary submission are all, with respect, to the same effect. Then your Honour moved on to discuss Chicot and also referred to Linkletter v Walker and also to the case I mentioned a moment ago, Norton v Shelby County.
KIRBY J: It is a very inconvenient doctrine, is it not? I mean, if you have a constitution which talks of courts and they are courts of a particular tradition and type and those courts have traditionally been divided in particular ways between superior and they have attracted certain entitlements to superior, then it is not a big leap of constitutional doctrine to say that, at least in the case of courts, their orders will have the force that by the traditions of the common law they have had for centuries and that you have to seek to set them aside. I mean, you could argue that way. It is certainly open.
MR GRAHAM: Your Honour appreciates our argument is to the contrary.
KIRBY J: I realise that, but I am just puzzling over what I feel is the fundamental doctrine of invalidity of a limited polity like the Commonwealth but, on the other hand, the great inconvenience of that in the case of judicial orders and the desirability, if it be constitutionally possible, to find a true legal foundation for a doctrine which will cause less inconvenience as undoubtedly setting aside orders which may be 30 years old on which a whole series of consequences have legitimately in a rule of law society been built. The ab initio doctrine is an extremely inconvenient doctrine that could lead to the unscrambling of many, many eggs.
MR GRAHAM: But we would say, your Honour, nonetheless, that it is the negligible consequence of the court having the capacity to declare a statute invalid, Marbury v Madison, and numerous cases in this court, if it is bad, it is bad and always was bad. One can hardly imagine a better example of that than the case with which we were concerned in Re Wakim where the grant of jurisdiction to the Federal Court was in respect of something which the Federal Court simply had no capacity to entertain it nor to make an order in respect of.
KIRBY J: It is a question of whether you accept that it is bad and always was bad but there is, in a sense, an exception in the case of courts and their orders because that has always been the nature of the orders of courts of our tradition which preceded the Constitution.
MR GRAHAM: But one of the problems in calling in aid, your Honour, the distinction between superior courts and inferior courts is a distinction which developed in a different context at a different time to serve different purposes. When one is concerned with the courts established by the laws of a Parliament of limited power the context changes and as I said to your Honour yesterday, the distinction ceases to serve any useful purpose.
GLEESON CJ: It may be that the laws are like people. To describe them as good or bad is an oversimplification. It seems to be common ground for example that the Full Court of the Federal Court would have the legal capacity to allow an appeal from a judge at first instance and make an order setting aside the order of the judge at first instance upon the ground that the judge at first instance lacked jurisdiction. What is the basis of the efficacy of the order of the Full Court of the Federal Court?
MR GRAHAM: Your Honour, we would put it this way. That the Full Court has jurisdiction, in a sense of federal jurisdiction, to entertain an appeal on that limited ground in order to set right something wrong which happened within the Federal Court hierarchy. But that is the full limit of the federal jurisdiction possessed by the Full Federal Court. It would not be purporting to exercise any jurisdiction conferred invalidly by a State Act. It would be simply stating the inevitable outcome of the decision of this Court in the context of the case before it.
HAYNE J: Would it be relevant for the Full Court of the Federal Court, if that power to decide were invoked, to have regard to whether the application invoking it was within time? Would it be relevant for the Full Court to consider whether the invocation was both out of time and at a point where intervening rights have arisen?
MR GRAHAM: We would say no to both questions, your Honour.
HAYNE J: That is to say, your submission amounts to the submission that void means, or nullity means, of no effect, and what is more a litigant or a person affected by it has an untrammelled right to have that declared by a court of competent jurisdiction at any time, whatever has intervened.
MR GRAHAM: We need to go that far, your Honour.
HAYNE J: Yes. That is, you deny, do you, the proposition advanced by Sir William Wade in his discussion of “Void or Voidable” in 83 Law Quarterly Review that it makes no sense to speak of an act being void unless there is some person to whom the law gives a remedy in the sense that you say the law will always give a remedy in respect of an unconstitutional statute?
MR GRAHAM: Yes, your Honour. That is, if I may use the word again, inexorable consequence of the system under which we operate. There is no power, the law granting jurisdiction was beyond power and actions thereunder of no legal effect.
KIRBY J: Do you know if that is what happened in the old Arbitration Court when it was held to be unconstitutional? Did all those awards immediately collapse and had no binding force?
MR GRAHAM: Your Honour, I am just in some difficulty. Ultimately, as I recall, what was held to be invalid was the grant of judicial power to the old court, and the grant of non-judicial power to make awards, as I recollect, was upheld. I recollect that that was the ‑ ‑ ‑
KIRBY J: You may be right. But there would be judicial orders. There would be quite a few judicial orders that had been made, interpretations of awards.
MR GRAHAM: Interpretations, union rules and, perhaps, committals for contempt and so forth. But what happened, your Honour, I do not know. Perhaps ‑ ‑ ‑
KIRBY J: It is a wonder it has not been – it may have been studied. It is a very interesting case.
MR GRAHAM: Yes. The section of that ‑ ‑ ‑
HAYNE J: They were picked up and fixed up by the statute, but nobody challenged the statute.
MR GRAHAM: Nobody challenged the statute.
HAYNE J: Yes.
GUMMOW J: You took us to the statute yesterday.
MR GRAHAM: Yes, I took your Honours to the statute yesterday for the purpose of making another point, but perhaps everybody thought that the statute worked, and left matters there. There may not have been a great number of judgments in the exercise of judicial power by the old court, that ‑ ‑ ‑
KIRBY J: And, in any case, in this case the Federal Court stands. It is the not the court that has been struck down.
MR GRAHAM: Yes. I am taking your Honours over to paragraph 4 of the supplemental outline. We have given the Court a reference to a passage from Dr Rubinstein’s book which is “Jurisdiction and Illegality” a study in public law in which he begins by making the interesting and, perhaps, slightly surprising point by saying:
In theory the acts of superior courts are similarly null and void when done without jurisdiction –
and the learned author cites Calder v Halket in 1939, and a very old case of Peacock and Bell. And he goes on to say:
the old cases furnish many dicta where this principle was upheld. However, as a superior court is deemed to have ‘general jurisdiction’, the law presumes that the court has acted within jurisdiction.
So, in the end, the distinction between inferior and superior courts depends upon where your starting point is. In the case of the superior court you start with a presumption one way and in the case of the inferior court you do not. But it does not alter the fact that the order of the superior court is ultimately vulnerable to being set aside or challenged if it is made beyond jurisdiction. It is not invulnerable.
If the Court pleases, I believe there is nothing further that I wished to add, save to say that in relation to footnote 8 on page 4 where we touch upon the topic of de facto officers, we probably should have reminded the Court of what was, I believe, said on that topic in the recent Bond Case, but I fear I have not had the opportunity of catching up with what the Court had to say there. But there is obviously a difference between an invalid appointment of an officer or judge and an invalid judgment by reason of a total lack of jurisdiction. We would submit that the de facto officer’s doctrine of whatever its limits are have no application in the present context. If the Court pleases, those are our submissions.
GLEESON CJ: Thank you, Mr Solicitor. Mr Solicitor for Western Australia.
MR MEADOWS: May it please the Court, we would seek to rely on our written submissions and to make one or two other points only. The clear purpose of section 11 of the State Jurisdiction Acts is to pick up proceedings that were pending in a Federal Court at the point that had been reached at the time it was determined that there was a want of jurisdiction and this is clearly to obviate the need for the plaintiff to start proceedings afresh in the Supreme Court and I suppose we need to look at the whole context in that way, that once there has been a determination that there is a want of jurisdiction it would have been open to the plaintiff to initiate proceedings in the Supreme Court or any other court of competent jurisdiction subject, of course, to any limitation legislation.
So once you look at section 11 in that light it is quite clear that it is no more than a means of allowing the proceedings to take place in the Supreme Court at a particular point. Now, if I could pick up on what your Honour Justice Gaudron said yesterday about section 11, we would submit that section 11 will only apply to proceedings at first instance and that it would not authorise the transfer of appellate proceedings and that no reading down is necessary to achieve that result.
GAUDRON J: Why do you say that?
MR MEADOWS: Well, that is what I was about to explain, your Honour. The foundation for the operation of section 11 is a finding by the Federal Court that there is a want of jurisdiction.
GUMMOW J: Well, it is the making of an order actually.
MR MEADOWS: Yes.
GUMMOW J: The section is triggered by the making of an order, the “relevant order”.
MR MEADOWS: Except that it does extend to “any…..determination” I think in ‑ ‑ ‑
GUMMOW J: A “relevant order”. There has got to be a ‑ ‑ ‑
MR MEADOWS: It is described as a “relevant order” ‑ ‑ ‑
GUMMOW J: Yes.
MR MEADOWS: ‑ ‑ ‑ but if you look at (c), your Honour ‑ ‑ ‑
GUMMOW J: Yes.
MR MEADOWS: Yes. What we say is that once there has been a judgment at first instance the Federal Court necessarily has appellate jurisdiction to determine an appeal from that judgment. Section 24(1)(a) of ‑ ‑ ‑
GAUDRON J: Well, can I stop you there? It necessarily has the jurisdiction to determine the appeal. You do not go so far as to say on the merits?
MR MEADOWS: No.
GAUDRON J: No.
MR MEADOWS: No, but it certainly has jurisdiction to determine an appeal and it may be that in determining that appeal it is left with no option other than to say that the judgment that was given at first instance was given in circumstances where the court did not have jurisdiction.
GUMMOW J: Well, it, the Full Court, might also determine that it was incompetent to deal with so much of the appeal as went on the merits.
MR MEADOWS: Yes, it may do that but ‑ ‑ ‑
GUMMOW J: Would that not be a “relevant order”?
MR MEADOWS: No, we would submit not, your Honour, because it still has jurisdiction to determine the appeal.
KIRBY J: What, even though the foundation of its original jurisdiction has disappeared?
MR MEADOWS: Yes, your Honour, because once you have a judgment at first instance section 24(1)(a) of the Federal Court Act legitimately gives a right of appeal.
KIRBY J: Yes, but that is [valid].
MR MEADOWS: No, it still has jurisdiction. The Full Court still has jurisdiction to determine an appeal on the basis that the court at first instance lacked jurisdiction.
KIRBY J: Well, that may be as it is, lacked the jurisdiction. What is your answer to Justice Hayne’s question, if they raise a point, “Well, do not get to that, because there are countervailing arguments of time, default, delay in bringing it intervening third party rights”? Normally a court would deal with jurisdiction first, but what if they were very, very strong arguments of convenience? Would the Federal Court be entitled to say, “Well, we do not get to jurisdiction, because of these intervening circumstances”?
MR MEADOWS: Well, we would submit that the Full Court would be susceptible to an order for mandamus, requiring it to determine that the court at first instance did not have jurisdiction, and therefore ‑ ‑ ‑
KIRBY J: So you support the Solicitor from Victoria?
MR MEADOWS: In that context, yes, your Honour.
KIRBY J: You say that they have to go to the question of their jurisdiction and settle that?
MR MEADOWS: That is our submission.
HAYNE J: And would have to do so even in the context of application for leave to appeal out of time, which is the hypothesis I had in mind when I put the hypothetical to the Solicitor for Victoria?
MR MEADOWS: Yes, we would accept what my learned friend said in that regard.
GAUDRON J: So does it follow on that argument that section 7(2) is necessarily inconsistent with the appeal provisions of the Federal Court Act?
MR MEADOWS: No, it does not, your Honour, because the appeal right to which it refers is an appeal from the ineffective judgment, degree or order, which is given force by section 6.
KIRBY J: But that is the very judgment, is it not, that is made in the Federal Court which, on your first proposition, is the subject still of a valid appeal, albeit one which can only go one way to the Federal Court? It is still available in the Federal Court. It is still available to be prosecuted as an appeal in the Federal Court.
MR MEADOWS: It is, but it is, nevertheless ‑ ‑ ‑
KIRBY J: It sounds like inconsistency to me.
MR MEADOWS: Well, no, with respect, your Honour, it does not involve any inconsistency. You have, as I think Justice Gaudron said yesterday, parallel rights, in respect ‑ ‑ ‑
KIRBY J: But when the Federal Parliament enacted the Federal Court of Australia Act, it did not contemplate that bringing of proceedings from an order of the Federal Court, transferred into a State court, to a State appellate court. It contemplated, and contemplated only, appeal to the Federal Court. Is there any case where a decision of a Federal Court judge, at first instance, can be appealed to a State appellate court?
MR MEADOWS: Not that I am aware of, but there are certainly examples of going the other way ‑ ‑ ‑
KIRBY J: Of course, many.
MR MEADOWS: - - - where State courts are susceptible to appeal to a Federal Court. The Western Australian Family Court would be an example, where appeals go to the ‑ ‑ ‑
KIRBY J: I know of those and does not the existence of those demonstrate that what is here provided is antithetical to at least what the Federal Parliament appears to have been doing in providing for appeals, and appeals only, to the Full Court of the Federal Court.
MR MEADOWS: With respect, no, because the appeal that is referred to, and I say “referred to” as opposed to “conferred” by section 7(2), is an appeal from the ineffective judgment which is given statutory force by virtue of section 6.
GAUDRON J: Are you saying it is a recognition of the appeal right to the Full Federal Court?
MR MEADOWS: Yes, and in fact if you look at the way in which ‑ ‑ ‑
GAUDRON J: And not an independent appeal right?
MR MEADOWS: No, it is – once you get the order covered by section 6 where the judgment is treated to be the same as if it had been a valid judgment of the Supreme Court constituted by a single judge, the right of appeal that is being referred to is an appeal from a single judge of the Supreme Court. But if you look at section 7(2) you will see that it is expressed to be:
Without limiting section 6 or subsection (1) –
and we would read that as meaning without limiting any right of appeal which would exist in respect of a judgment of the Supreme Court. It is then expressed as being “inclusive”. Section 6, we would say, already carries with it a right of appeal and all that subsection (2) does is to confirm that that right of appeal exists.
GAUDRON J: It is a right of appeal – we will use all that in inverted commas for the moment – from, with respect to, relating to, however you like to put it, the ineffective judgment of a single judge of the Federal Court to the Full Court of the State Supreme Court. No?
MR MEADOWS: No, your Honour. What section 6 does is to transmogrify the ineffective judgment into, by statutory force, rights and obligations, as if they were rights and obligations created by a judgment of the Supreme Court.
GAUDRON J: Yes.
MR MEADOWS: And it is the right of appeal from the Supreme Court to which section 7(2) refers.
GAUDRON J: Right of appeal to the Supreme Court, I understand, from what or with respect to or related to what?
MR MEADOWS: From the judgment decree or order which section 6 creates.
GAUDRON J: I see.
MR MEADOWS: It is very easy to fall into the trap, if I might say, with respect, to regard the appeal as being an appeal from the reasons for judgment of the judge of the Federal Court that made the ineffective judgment but in truth it is a right of appeal from the judgment, that is the rights and obligations that were declared to exist as a result of the judgment.
KIRBY J: But you would only know those in most cases by going to the reasons.
MR MEADOWS: Of course.
KIRBY J: Of the Federal Court single judge.
MR MEADOWS: Of course, your Honour.
HAYNE J: Why? Why do you accept that? Why is not the judgment, ordinarily speaking, self‑evident of the rights. A shall pay B X dollars.
MR MEADOWS: Yes.
HAYNE J: A shall deliver possession of Black Acre to B.
MR MEADOWS: But the only point I would see myself as conceding there, your Honour, is that in order to determine whether that outcome was right you may have to look at ‑ ‑ ‑
HAYNE J: Separate question?
MR MEADOWS: Yes.
HAYNE J: But the right which is the subject of appeal is the right said to or dealt with in section 6 – let us walk past how it deals with it. The right is that A shall pay B X dollars.
MR MEADOWS: Yes, and there may be a question as to whether that is right in law in that, if you examine the facts and circumstances of the case, the rights and obligations of the parties may well be different from those declared by the judgment.
KIRBY J: Do you suggest that the Full Court or Court of Appeal of the State would ignore the reasons for judgment of the judge of the Federal Court and just say, “This has merged in judgment and I will simply look at the face of the judgment”.
MR MEADOWS: I am not quite sure how it would work out.
KIRBY J: It seems inconceivable that the purpose of this legislation is to do other than to transfer, effectively, the appeal from where federal Parliament assumed it would be, the Federal Court to the State appellate court, that they would use the reasons to understand the nature of the appeal. The grounds of appeal would be addressed to those reasons, one would expect.
MR MEADOWS: Yes, that is one way in which it could be approached, I accept, your Honour.
KIRBY J: It is the only way.
MR MEADOWS: But adverting to what Justice Hayne inferred yesterday, it may be necessary for the Full Court to make its own findings of fact and it may be necessary for it to receive evidence in order to make findings of fact in order to determine whether the decision, the judgment, was right.
KIRBY J: But Full Courts and Courts of Appeal act within their statutes and those statutes provide, generally, that they are to deal with “appeals” and to deal with it in a particular way, for example, the rehearing provisions impose limitations on them normally. They are not at large at a trial court, normally.
MR MEADOWS: Normally, you would have to show special circumstances before you could adduce evidence before a Court of Appeal but there is ample power for an appeal court to receive evidence and in the case of South Australia where we are in this particular matter, the court does have ample power and it is to be found in Order 95.15(b) of the Supreme Court Rules of South Australia where there is a general discretion conferred on the court to receive evidence.
GAUDRON J: Yes, but you may ultimately have to face, on your line of argument, the question whether what section 7(2), on your argument, is talking about is an appeal by way of rehearing which is predicated usually on the finding of error, or an appeal by way of hearing de novo would be hard to read into the bare terms of section 7(2) that what was being granted was an appeal by way of hearing de novo.
MR MEADOWS: Well, all I can say is that what it seeks to do is to bring into play the appeal provisions that apply to appeals from a judgment at first instance in the Supreme Court. I appreciate that there are some conceptual problems with that but all I can say is that the draftsman of the legislation sought to create a right of appeal so that the litigants were not left with a judgment at first instance which they would have liked to have appealed. If that cannot be achieved, then we would submit that is something which is clearly severable from the legislation.
KIRBY J: So you do not accept the submission of the Solicitor for Queensland that the appeal provisions are integral to the package?
MR MEADOWS: No, your Honour, and we make that clear in our submissions.
GUMMOW J: Now, this order of Justice O’Loughlin which we now have, the order of stay, that was not an ineffective judgment, was it, which attracted ‑ ‑ ‑
MR MEADOWS: No, your Honour.
GUMMOW J: He was construing a Federal Court Act really.
MR MEADOWS: And he was determining his own jurisdiction.
GUMMOW J: Yes, as a matter of federal jurisdiction.
MR MEADOWS: Yes, your Honour.
GUMMOW J: Yes. So these questions really do not arise except in so far as Mr Jackson’s argument at 11 yokes in some of these earlier sections.
MR MEADOWS: Yes, well, we would submit that it does not, and for the reasons which I have sought to outline, that you are never going to get to a situation where section 11 is going to call for the Supreme Court to exercise appellate jurisdiction. There is just one other matter to which I wanted to refer ‑ ‑ ‑
KIRBY J: So that means that citizens of Australian have been deprived of a right of appeal.
MR MEADOWS: In a case which has been determined at first instance in the Federal Court unless section 7(2) gives that right validly.
KIRBY J: That is part of what I have called a package of the legislation.
MR MEADOWS: Yes, your Honour.
KIRBY J: I notice in the Foreign Judgments Act that there is a provision, because that was referred to yesterday, whereby the court shall be set aside by a Supreme Court if satisfied:
that the courts of the country of the original court had no jurisdiction in the circumstances of the case.
MR MEADOWS: Yes. In fact, I was going to take the Court to that very issue as the final matter to which I wish to refer. We did mention the Foreign Judgments Act in our submissions at paragraph 18 on page 13 together with commercial arbitration awards as examples of adjudicated outcomes being capable of registration or enforcement at least, in superior courts.
KIRBY J: But the Commercial Arbitration Act is pursuant to a contract which the parties themselves agree to. It is not suggested here that this is something the parties agree to. This is imposed on them by, effectively, a parliamentary judgment.
MR MEADOWS: But no more than is done in regard to the Foreign Judgments Act.
KIRBY J: But as I said, under section 8(2), there is an obligation of the court to set aside a foreign judgment entered in an Australian court, if it is shown that the court of the country of the original court had no jurisdiction in the circumstances of the case. It is an obligation.
MR MEADOWS: But the point is that, even though it is a judgment of another court, it is an adjudicated outcome of another court, or it might even be simply a default judgment of another court - - -
KIRBY J: It is a pseudo judgment if it is not with jurisdiction. It purports to be, it appears to be, it pretends to be, but it is not. And the court is then obliged to remove it from its record.
MR MEADOWS: Yes. I accept that. Incidentally, your Honours, as I understand the situation, the registration and enforcement of foreign judgments is now governed by the Foreign Judgments Act 1991 of the Commonwealth. Your Honour Justice Gummow referred to the ‑ ‑ ‑
GUMMOW J: The old State - - -
MR MEADOWS: Yes, your Honour, but I think it has been superseded.
GUMMOW J: Yes.
KIRBY J: I was reading from the 1973 Foreign Judgments Act of New South Wales and it may be that that provision is not in the federal Act, I do not know.
GUMMOW J: I referred to the State Act because it is non‑federal jurisdiction, and it goes back a long way to the 1924 Act.
MR MEADOWS: I might say that we do have a book of materials which we might hand up which refer to matters in our submissions, including the Foreign Judgments Act of 1991, the relevant provisions, and I refer in particular to section 6. Perhaps if we could just hand those up.
KIRBY J: Does that federal Act purport to override and exclude State jurisdiction?
MR MEADOWS: Yes, your Honour.
KIRBY J: So that there is now but one law in Australian - - -
MR MEADOWS: Yes. And as I say it was in 1991. There was some overlap because if the judgment was prior to the 1991 Act coming into force, the State Acts were applicable, as I understand it. That is to be found at page 25 of our book of materials and section 6 you will find at the bottom of page 26 of the book of materials and section 6(2) is the most pertinent provision.
KIRBY J: Well, the same provision is repeated in section 7(2)(a)(iv).
MR MEADOWS: Yes, your Honour.
KIRBY J: Must.
GUMMOW J: But nevertheless, what this Act did - all these Acts do is change the common law position where you have foreign judgment.
MR MEADOWS: You had to sue.
GUMMOW J: You had to sue and start again.
MR MEADOWS: Yes.
GUMMOW J: And that mischief is removed by this, with some exceptions for countries which have systems which have problems about them, I suppose. There is a particular problem in the case because of the jurisdiction it is under.
MR MEADOWS: Perhaps the other point that I would like to make about this Act is that it does allow for registration of judgments in the Federal Court, in certain cases.
GUMMOW J: Yes.
MR MEADOWS: If it please the Court.
GLEESON CJ: Thank you Mr Solicitor. Mr Solicitor for South Australia.
MR SELWAY: If it please the Court, we rely upon our written submissions. I should make one early qualification to them. In paragraph 4 of our written submissions we have said that it is assumed by the majority in Re Brown. I hasten to point out, that was not meant to suggest that the majority had not thought about the matter, but it would be worth pointing out that there was actually a submission put in Re Brown on that question by Mr Robertson. It may have been answered in the written submissions which were filed after the oral submissions were completed, and I am unable to assist the Court on whether they were. But, certainly, Mr Robertson did put a submission that the Court should rely upon your Honour Justice Gummow in Gould v Brown, that the orders were valid until set aside.
We adopt Western Australia’s submission as to the meaning and effect of the Act and its validity assuming that the orders made were voidable, but with one qualification. This morning my learned friend, the Solicitor for Western Australia, put that the Full Federal Court could hear an appeal, as it were, notwithstanding the conditions of its appellate jurisdiction under the Federal Court Act. We would say that it is still bound by those conditions, whether as to time, leave or whatever, and it does not have a roving jurisdiction, even in constitutional matters, to declare single judge decisions invalid. This Court may have a broader jurisdiction in that regard but the Federal Court does not.
KIRBY J: But your submission is that it only has the jurisdiction to entertain the appeal for the purpose of deciding that the primary judge had no jurisdiction.
MR SELWAY: That is the extent of the jurisdiction but if its appellate jurisdiction is limited, for example, because of a requirement for leave or because of a requirement for an appeal to be taken within 30 days of the judgment, or whatever, those restrictions, we would say, remain and must be complied with in order to found any appellate jurisdiction in the Full Federal Court.
KIRBY J: So, delay or intervening third party rights could occasion a decision by the Full Federal Court not to set aside an earlier judgment, in your submission?
MR SELWAY: It could, your Honour. We would say that if our submission is right and the earlier judgment is void, there is little practical utility in the court adopting that process but if, for example, an appeal is brought seven years out of time the court may take the view, whatever the practical utility, it will not hear it.
KIRBY J: But would that be of any use because a party would then come off to this Court for mandamus under the Constitution, would they not?
MR SELWAY: Probably, your Honour, and it may be of no use. I am not suggesting it is of any practical utility, I am simply saying that the limits on the appeal rights for the Federal Court set out in the Federal Court Act remain.
GAUDRON J: Mr Solicitor, there is something occurs to me apropos of Justice Gummow’s question, and it occurs to me in relation to this void/voidable/nullity debate. What occurs to me is that, assuming everything is out of time, mandamus and prohibition might not necessarily be adequate and there would be circumstances in which you would need - if the judgment stands, you would actually need certiorari.
MR SELWAY: Yes.
GAUDRON J: It may be not without significance in this void/voidable/nullity debate that 75(v) does not mention certiorari.
MR SELWAY: Yes, your Honour is right. There may be a lacuna.
GUMMOW J: Well, it may be deliberate.
MR SELWAY: Exactly, your Honour, but the capacity to grant a declaration may fill it in some circumstances, although if there was a jurisdiction to do that there may well be the jurisdiction otherwise. The issue may well arise because it almost always going to be a matter arising under the Constitution, so that may found some jurisdiction, but your Honour is right, there may be a lacuna.
GAUDRON J: But the absence of certiorari in 75(v), the large question as to the Court’s power to make a bare order for certiorari other than in aid of mandamus or injunction – mandamus and prohibition, I am sorry – may well indicate that at least there is no scope for the void/voidable debate, that those orders are good unless they can be dealt with by way of prohibition, unless their effect can be nullified by way of prohibition, mandamus or injunction. By and large, it is only by the issue of certiorari in conjunction with mandamus or prohibition that this Court ever quashes a decision or order that was made without jurisdiction.
MR SELWAY: With respect, your Honour, we would apply it the other way round. If it is voidable, then this Court needs a power to quash. If it is void, this Court does not need a power to quash, it is already void. What this Court then needs is a power to prohibit it, which it has. So taking your Honour’s point, I must say I would have understood it the other way.
GAUDRON J: Yes.
KIRBY J: That tends to support the argument of Mr Solicitor from Victoria that it is fatally flawed and you do not need a court order.
MR SELWAY: Yes, and we put the same submission. We have some qualifications on it, as I understand it, that the solicitor for Victoria does not put. But we broadly put the same submission.
KIRBY J: Do you know why, historically, certiorari was left out of section 75(v)?
MR SELWAY: No, your Honour, and one of the reasons why I am not all that keen to leap on it as a deliberate provision in the Constitution is it is very difficult to think that it was. It may have been inadvertent.
KIRBY J: Especially given its importance in the United States, one would have thought it would have found a place there.
MR SELWAY: Though it certainly is my understanding of United States jurisprudence, certiorari is used there in a statutory context and has a different meaning to what we would understand it to mean.
KIRBY J: Yes, it is not in the Constitution.
MR SELWAY: Your Honours, we say that the issue on the void/voidable question is whether section 5(2) of the Federal Court Act which declares the Federal Court to be a “superior court of record”, whether that declaration has the effect that orders made by the Federal Court, pursuant to a statute which is invalid ab initio, are voidable rather than void. Let us say, put another way, whether the Parliament has the power to give that effect to the order of the Court where that order relies upon an invalid statute. We say that the accepted principle in Australian constitutional law is that a statute made beyond constitutional power is invalid ab initio, it has never been a law at all and it can be ignored. This Court has consistently declined any invitation to avoid the rigour of that rule, for example, it did so in Ha and most recently in Bond, where it was suggested that the de facto officer rule, another common law rule, could be used in aid to avoid what was perceived to be an inappropriate consequence and the Court said no, it could not be used. The relevant quotation is at page 10 of our written submissions.
GUMMOW J: So does this amount to an attack on the validity of section 5 or the reading down of section 5 of the Federal Court Act, on the basis that it is insufficiently supported by section 71 or 77(i) plus section 51(xxxix)?
MR SELWAY: Your Honours, we do not argue that section 5 does not have the effect that the Federal Court is a superior court of record, for most purposes. Our submission is ‑ ‑ ‑
GUMMOW J: Could you read down the effect, given that phrase?
MR SELWAY: Well, we say declaring it to be a superior court of record cannot have the effect that the court can make orders which have an effect when it is acting beyond constitutional jurisdiction. If I can put if in that context. That may involve reading it down, perhaps, but what we would say is that it was never intended to have that effect. It is, in effect, a deeming provision and the question then is, what can that deeming provision mean? We would say, for example, that you do not read down section 5, because prohibition lies to this Court. That is just a constitutional context and you would read section 5 as being subject to that constitutional context.
So here, we would say, that the Constitution specifies quite deliberately what jurisdiction can be conferred on Federal Courts and what federal jurisdiction can be conferred on State courts. The question is, if those provisions are, if you like, exceeded, can the Parliament pass a law having the effect that instead of that statute being invalid ab initio, the orders of the courts made, giving effect to that jurisdiction, are voidable rather than void.
KIRBY J: This is the stream and the source argument.
MR SELWAY: Yes, your Honour, the stream and source. We say that the rigger of the void ab initio rule is dramatic and can be very dramatic and your Honours have had various examples in relation to judicial power. There have been recent cases before the Court where these issues have arisen. In McGinty, for example, if the plaintiff had succeeded in that, the argument seemed to have the effect that the Western Australia Parliament had been invalidly constituted for many, many years. There then would have arisen the question of, what one did about it. It was not obvious how one dealt with the invalidity ab initio rule in that context.
We had a recent example in Eastman, where your Honours will recall that if that argument put by Mr Eastman had succeeded, then all the Northern Territory courts and the Australian Capital Territory courts had been invalidly constituted, and not only would that have had the consequence that appeared that all their orders may have been invalid, but, at least in relation to criminal matters, to pick up some issues your Honour Justice Kirby raised yesterday, it would have been most unlikely that any Parliament could have legislated to have validated the orders, because that legislation would have involved bills of - - -
KIRBY J: Why, in principle, should it be different in a civil matter? I mean, if you concede that it could not be done in a criminal matter, how can a State Parliament do it in a civil matter? Civil litigants are citizens too; normally they are entitled to be heard.
MR SELWAY: Well, it is the distinction this Court has drawn between what is clearly and obviously judicial power and what is not. The legislature also has the capacity to deal with rights and liabilities of citizens and the decision as to how that is to work, the court is given some leeway in respect of civil matters. It is said in relation to criminal matters those matters are within, if you like, the core of judicial power and the Parliaments may not legislate in that area to create bills of attainment. Polyukhovich decided that. So what one says is that this rule can have dramatic consequences, nevertheless, this Court has upheld that rule and continued to apply it.
KIRBY J: What about an order of the Federal Court in a contempt, finding somebody guilty of contempt. That is on the cusp between civil and criminal. Could that be brought over under this legislation?
MR SELWAY: Indeed, your Honour, my understanding is that it is, that the rights and liabilities of the parties are determined by the orders. Now, on our argument the order for contempt would probably be a nullity as well – I am sorry, I will not use the word “nullity” – would probably be void as well because the original order upon which that was based was void, but nevertheless it is brought over because the rights and liabilities are declared under section 6.
McHUGH J: Well, interestingly, Mr Matthews, whose case was referred to yesterday, the judgment of Justice Sackville, was gaoled last Thursday in New South Wales by Justice Windeyer for contempt of the Supreme Court for similar reasons.
MR SELWAY: Yes.
McHUGH J: I think Justice Windeyer may have taken into account in gaoling him the fact that there had been this order made by Justice Sackville earlier which gave him, in effect, a suspended sentence.
MR SELWAY: Yes.
GAUDRON J: I must say there is a certain attraction about your argument, Mr Solicitor. If you are right, this Court could cheerfully, in a number of cases, refuse special leave, refuse to entertain applications for prerogative relief, saying, “Oh, if you say this is a nullity, just go and fight it out in the streets or just go and fight it out in any court that takes your fancy.” I must say it does appeal to me at the moment.
MR SELWAY: Your Honour, Chief Justice Griffiths dealt with that very issue in dealing with appeals from nullities because it is not as if nullities are a strange thing in relation to judicial orders. It is only superior courts where they are not. Inferior courts have always been nullities and in the case of Ah Yick, which is referred to in footnote 15 on page 10 of our written submissions, which are the cases we have set out on the power to appeal from an invalid order.
GAUDRON J: There is certainly power to appeal, but where is the special leave point if you can fight it out in the Magistrates Court? Why grant prohibition and mandamus if the orders were of no effect?
MR SELWAY: And one may well say, your Honours, if it was a Wakim matter, the Court may well say, “Well, we all know that this is invalid. We do not need to hear this appeal. We do not need to set it aside. Go away.”
KIRBY J: That apparently is what the Family Court did, just picked up the files and sent it away, but if, in fact, it is not null and void and if you can appeal under the Federal Court Act and if that has not been done, what business is it of the State Parliament to intervene in a process which the Federal Parliament has enacted will take a certain course? I mean, why is that not inconsistent?
MR SELWAY: In terms of the legal question, your Honour, that raises the matter that my learned friends have made submissions on. In terms of the policy question, the policy question is that the assumption that, for example, the orders made in Re Brown by this Court solved all the problems is a wrong assumption. In Re Brown, as I understand it, the matter had to come back a couple of times and then, I think, it was left to the Federal Court to make the orders that dealt with ongoing issues but a voidable order is not a very helpful order. That is the reality of things. You do not have continuing jurisdiction to deal with issues. There is a need to deal with things like appeals on merits. That is the reason why there needs to be State legislation.
KIRBY J: But I thought we were told earlier that there is no appeal on the merits. There is an appeal which is called an appeal to a court which has appellate jurisdiction and we do not really know whether it is going to be a de novo hearing or it is going to be a hearing in accordance with the State Act which is normally an appeal for error.
MR SELWAY: Could I perhaps say to your Honours what we understand it to be in the South Australian Act. We understand the appeal – we have a single judge decision of the Federal Court. That single judge decision is treated as an order of the Supreme Court single judge. There is then a right of appeal pursuant to the Supreme Court Rules to the Full Court and the Supreme Court Rules provide that an appeal from a single judge of the Full Court to the Full Court is an appeal by way of rehearing. We would understand that in determining that appeal they would probably look at the reasoning of the single judge at the Federal Court.
HAYNE J: Now that answer does not use the language of the statute. If you use the language of the statute, the right which is engaged or granted is the right which is conferred by an identified section of the Supreme Court Act of South Australia or rules made under it, namely a right to appeal from a particular decision.
MR SELWAY: Yes.
HAYNE J: That right is engaged, if your argument about construction of the sections were to be accepted, because what happened in the Federal Court is declared to be and always to have been the same as if or the rights are declared to be and always to have been the same as if it were a valid judgment of the Supreme Court constituted by a single judge.
MR SELWAY: Yes, that is all true, your Honour. The question is if it is an appeal by way of rehearing.
HAYNE J: But the right that is engaged is the right to an appeal by way of rehearing.
MR SELWAY: Yes, your Honour.
HAYNE J: Yes.
MR SELWAY: Sorry, if I have expressed it differently from that I apologise. Your Honour has put it correctly. Your Honours, what we say is that the effect of invalidity pursuant to sections 75, 76 or 77 is that the statute conferring jurisdiction is void ab initio and for the Parliament to legislate that an order made by a court exercising that invalid jurisdiction is not void but voidable, we would say that cannot be done.
GUMMOW J: Just assume you are wrong about that, Mr Solicitor, do you say that means your Act falls with respect to its appellate provisions?
MR SELWAY: No, your Honour.
GUMMOW J: This is an alternative argument.
MR SELWAY: Yes, your Honour. We adopt the submissions of my learned friend, the Solicitor for Western Australia, on the question of how the Act is to be interpreted, that it is consistent with Humby and so on. This is an alternative. We say you do not get to those issues if we are right.
GUMMOW J: It seems to me you are just scaring us with some chaos theory we do not necessarily have to embrace to decide this case.
MR SELWAY: That may be possible. It is just that the premise of the case - and, as I say, it flows on from Wakim - is that these orders are voidable and not void. My learned friend Mr Jackson’s written submissions start with that proposition, as they must, and it is that proposition, we say, we doubt.
Your Honours, there are three reasons put against the submissions we put, as we understand it. They are put by the Commonwealth in its written submissions. The first, in paragraphs 2.1 to 2.7 of the Commonwealth’s written submissions, it is said that the Federal Court is a superior court of record and, therefore, its orders are voidable. We say, with respect, that begs the question rather than answers it and that question is again whether section 5(2) of the Federal Court Act is constitutionally capable of having that consequence.
The second argument made by the Commonwealth is in paragraph 2.7 and, in particular, footnote 33 of its written submissions where the Commonwealth refers to US cases. Your Honours have seen some US cases and I do not want to burden your Honours with very many more. We say the US cases fall within two groups. First, there are a group of cases where the relevant court – perhaps I should qualify this your Honour – the US cases this century fall within two groups. It may be that in the 19th century it was different.
There are the cases where the relevant court had jurisdiction over both persons and subject matter but the invalidity arose in the exercise of their jurisdiction, a distinction between, if you like, jurisdiction and power. In those cases it has been held that the order was valid until set aside. I will not take your Honours to it though we have handed up a copy of the decision – Howat v State of Kansas 258 US 181 (1922), particularly at pages 189 to 190, is an example, as is the case of Walker which is referred to in footnote 3 of our written submissions and in note 23 of the Commonwealth’s written submissions.
The second group of cases are those of which Chicot, which your Honours were taken to yesterday, is an example. In those cases, we say that the reasoning of the court is, if you like, prospective overall in reasoning; that, instead of invalidity being invalidity ab initio, the court has a discretion to determine the results of invalidity so as to do justice between the parties. Your Honour Justice Gummow was quite right, the courts in America have moved away from that reasoning in all but criminal cases. However, that seems to be the reasoning that Chicot is based upon ‑ ‑ ‑
GUMMOW J: That is why I wanted to find out how Chicot applied it in the bankruptcy catastrophe.
MR SELWAY: Yes, and I must say, your Honour, that these cases seem not to have been applied very often, at least in the US Supreme Court in recent times.
GUMMOW J: Maybe because they are never challenged.
MR SELWAY: That may be the case. Your Honours, could I perhaps take your Honour to a case we have handed up which gives some idea of what the reasoning in Chicot is about. That is a case United States v United States Fidelity Co 309 US at 506. I think we have handed up a copy of the decision. The relevant parts are at page 514 to 515.
That case concerned a statute of the US Congress which limited the jurisdiction of various courts to hear matters involving either the United States or Indian Nations. Notwithstanding that limitation, a court which did not have that jurisdiction proceeded to make a relevant order. At page 514 the court said:
In the Chicot County case no inflexible rule as to collateral objection in general to judgments was declared. We explicitly limited our examination to the effect of a subsequent invalidation of the applicable jurisdiction statute upon an existing judgment in bankruptcy. To this extent the case definitely extended the area of adjudications that may not be the subject of collateral attack. No examination was made of the susceptibility to such objection of numerous groups of judgments concerning status, extra-territorial action –
and their Honours then give a list. Their Honours, in that case, held that the orders were void ab initio.
What we say is that the rule that is being applied in the Chicot Cases, if I can so describe them, is a rule of balancing the effects of invalidity, the advantages of finality and the interests of justice, as the court perceives it. That balancing test is referred to in the article which is noted in the Commonwealth’s submissions in footnote 33 at (1977) 87 Yale Law Journal - that journal is on our list and we do not need to take your Honours to it – at pages 178 to 179 where the author refers to the balancing test that is there undertaken and we say that balancing test is similar to the test that was applied by the US courts in respect of overruling.
GUMMOW J: But the Fidelity Case turns on sovereign immunity, does it not, the notion of sovereign immunity which cannot be waived?
MR SELWAY: Yes, your Honour, but the statute, as I understand it had, if you like, given the sovereign immunity a statutory base, in particular, for Indian Nations, but certainly it could not be waived, yes, your Honour.
GUMMOW J: Yes, it is bound up with Indians and the special position of the Indian Nations.
MR SELWAY: Yes, and I do not try to take any more out of it than to say that the Chicot test is a balancing test.
GUMMOW J: Yes.
MR SELWAY: Properly considered, what we say the US cases stand for is either a proposition which is consistent with the test, as we propound it, or a test – the Chicot test – which is based upon completely different principles. The third reason given in the Commonwealth’s submissions is that set out in paragraph 2.9 which are called issues of “principle and policy”. We do not doubt the strength of those policy points they make. We simply make the point how can they stand against a constitutional rule, and we have already pointed to your Honours the problem that rule can cause in other contexts.
So, we say that there is no answer and we give as an example, and it is certainly an extreme one, of the problems that might arise if those who say that these orders have some effect were right. Assume, for example, that South Australia created a court which we called the Australian Court of Appeal, the Act establishing it called a superior court of record, and the Act specified that that court had jurisdiction to hear appeals from administrative tribunals in South Australia.
And then contrary to the advice of its law officers, the South Australian Parliament enacted a law conferring on that court jurisdiction to hear appeals from this Court.
There was no doubt that that second legislation is invalid. We would say no doubt that the first legislation was valid. One has a superior court of record, properly constituted with jurisdiction which has conferred on it jurisdiction which is clearly invalid. Now, if that court had proceeded, presumably very quickly, to make orders on appeals from this Court, my learned friend’s argument would be that those orders have validity and effect until set aside, presumably by this Court. We say they have none and can have none.
Your Honours, our submission as to the effect of invalidity admit of four qualifications. The first is not really a qualification but refers to the point already made that our submissions deal with Acts in excess of constitutional jurisdiction, if you like, not mistakes of constitutional law that are within jurisdiction. To give an example of the latter kind, assume a Supreme Court with federal jurisdiction hears criminal offences arising from federal law where it delivers a jury verdict based upon a majority. We would say that the relevant order is voidable rather than void. It is a mistake of law within jurisdiction, not without. The second qualification is that an invalid ‑ ‑ ‑
KIRBY J: It does not seem to have been what was assumed in the post Cheatle Cases.
MR SELWAY: Yes, your Honour. We say it must be right. The restriction in Chapter III is a restriction upon the granting of jurisdiction beyond power.
KIRBY J: I thought after Cheatle that cases almost as of right - appeals to this Court were allowed and the judgment based on the verdict set aside.
MR SELWAY: That is true, your Honour. But what did not happen after Cheatle is that everybody got out, and if my argument were right and applied in that circumstance, then the orders sending them to imprisonment would have been invalid and they would have been entitled to be released. What we say is that the distinction is between acting in excess of jurisdiction and acting within.
HAYNE J: And they would have had an action for false imprisonment.
MR SELWAY: Indeed. And there is English authority recently saying the mere fact that we acted bona fide was of no avail at all to assisting us in that.
GUMMOW J: That is right. That is why I wonder how this train of inquiry really assists the interests of the State of South Australia.
MR SELWAY: Your Honour, we see it as following inevitably from the decision in Ha and the comments on the de facto officer rule in Bond.
HAYNE J: And the Treasury of the State of South Australia is open to all like the doors of the Savoy, is it Mr Solicitor?
MR SELWAY: The other consequence, of course, your Honour, is that if are right about what the effects of invalidity are, then that has an effect upon constitutional interpretation, and that some of the provisions of the Constitution may be found in due case not to be mandatory, but declaratory to the extent that those distinctions are still possible, that one gets into a broader debate about what the effect of constitutional provisions are. But what we say is that this Court has consistently held the line that statutes avoid ab initio, and from that follows various things. And then in this case where the legislation is under challenge and under criticism, attempting to, if you like, resolve the problems arising from invalidity, whatever it means, it seems to us that one has to understand in that context what the real results of invalidity are and should be.
GUMMOW J: Now how does section 109 fit into this, …..laws become invalid to the operation of section 109?
MR SELWAY: One would have said, given the terms of section 109 ‑ ‑ ‑
GUMMOW J: And there has been executive action in reliance on this State Act before the Court has actually ruled on the invalidity.
MR SELWAY: One would have said that section 109 had the same effect. But there may be an argument, your Honour, that because section 109 does not render the law invalid ab initio but merely suspends its effect, which I think is the current ‑ ‑ ‑
McHUGH J: Inoperative.
MR SELWAY: Yes, inoperative in effect, that it may have different consequences. That may be possible ‑ ‑ ‑
GUMMOW J: That means it may come good again.
MR SELWAY: Yes.
GUMMOW J: It does not mean it was good at the time this person was in prison.
MR SELWAY: No, I understand, your Honour. There may be a difference because it may not be void ab initio in that context. Your Honours, the third qualification we make relates to this Court. For the reasons we give in paragraph 14 of our written submissions, we say that the orders of this Court, whether it is in limited jurisdiction or whatever, must by virtue of it being the superior appeal court in the structure, must nevertheless always be final and not subject to collateral appeal. Section 73 says that in relation to appeals. It says that the orders of the Court in appeals are “final and conclusive”, but we would say even in original jurisdiction the same must apply.
Your Honours, the fourth qualification we make arises out of two propositions. The first is that in determining whether or not a court is acting in excess of jurisdiction, the issue is whether jurisdiction exists in fact, not whether the Court has made an error as to the source of the jurisdiction. That proposition - it is probably sufficient if I give your Honours the reference to Brown v West (1996) 169 CLR 195 at 203, which I think was a decision of the whole of the Court, dealing there with the Remuneration Tribunal, but various cases are cited which deal with courts.
If we use the proceeding in Transworld as an example – sorry, the second proposition is that, saving constitutional questions, orders made by superior courts in excess of jurisdiction are valid until set aside. We say those two propositions, if one looks at the Transworld proceedings, for example, there were three possibilities – at least it appeared there were three possibilities from the argument. The first is that the jurisdiction was cross‑vested jurisdiction, in which case the jurisdiction was invalid. The second is that the jurisdiction was accrued jurisdiction, in which case it was valid. But there was a third possibility, and the third possibility is that it was an order made in excess of the accrued jurisdiction.
The problem it seems to us to raise is how does one answer the question, particularly with a court like the Federal Court now is and the State Supreme Courts have probably always been, where there is a broad general jurisdiction in that Court, how does one answer the question of whether the order is in excess of the broad and general jurisdiction or can only be justified under the statutory jurisdiction.
Your Honours, we say the answer to that, or the answer we suggest, is we adopt the word “semblance of jurisdiction”, which was used by Chief Justice Mason, in what we say is an analogous but different context in Jackson v Sterling Industries (1987) 162 CLR 612 at 616, and what we say is that the invalidity does not arise unless there is no semblance of jurisdiction but for the invalid statute, and there are going to be, we would accept, many grey areas where that test cannot be made out and, from what we heard yesterday, Transworld may have been one of them.
Your Honours, that being said, paragraph 16 of our written submissions is then expressed by (ii) broadly, with the implication there that all Corporations Law matters would necessarily be matters where there would be no semblance of federal jurisdiction, but for the Corporations Law cross-vesting scheme, but whilst it may be expressed too broadly, we would say, as a general proposition, it is probably still true. Your Honours, subject to anything else, those are our submissions.
GLEESON CJ: Thank you. Mr Solicitor for New South Wales.
MR SEXTON: Your Honours, in addition to our written submissions, we adopt the submissions of the plaintiffs and all of the interveners, except on one question, which is the question of whether or not the orders made in excess of jurisdiction are nullities. On that particular question, together with the Commonwealth, we make the submission that the orders are not nullities and the only matter on which we wish to expand briefly to the Court is the section 109 question that arises, perhaps more accurately we say does not arise, in relation to an order of the Federal Court that is not a nullity.
By way of background on that particular issue, your Honours, it seems to us that there are three situations that can raise the question of the validity of court orders. The first of those is where the court itself is invalidly constituted, perhaps in the way in which Justice McHugh referred yesterday to the creation of the customs court, and that situation is perhaps also reflected in the Canadian decisions coming out of Manitoba, one of which was referred to by my learned friend from South Australia, the reference Re Manitoba Language Rights and the citation for that, I think, is set out in the supplementary submissions from Victoria that were handed up this morning.
The second situation, which is what we say arises in this case, is where the court is validly constituted, but lacked jurisdiction to make the decision that it did, and we will say shortly what we think the consequences of that situation are. The third situation is where the court has based its decision on a statute that has subsequently been held to be unconstitutional, using that term broadly, so that the statute itself perhaps could have been said to be void ab initio.
Generally, in our submission, the results of that third situation have been that the judgment has been binding and effective unless and until it has been the subject of a successful appeal. I can give your Honours some references to that in various jurisdictions. I would simply give the references perhaps because they are illustrations of what we say is the general principle. The position in the United Kingdom is perhaps set out well in a decision of the New South Wales Court of Criminal Appeal, Reg v Unger (1977) 2 NSWLR 990, a case where the regulations which ultimately gave rise to the criminal offence; in New Zealand Reg v Knight (1998) 1 NZLR 583.
The United States position is subject of discussion in the course of the argument put by my learned friend from South Australia. It is true that there are some different considerations in the decisions of the United States Supreme Court. Chicot, nevertheless, we would say, reflects the general proposition that we contend for. In relation to the United States Bankruptcy Court, the decision referred to by Justice Gummow, Northern Pipeline Company v Marathon Pipeline Company (1982) 458 US 50, that was a case of prospective overruling and, in any event, the court stayed its decision for some months, presumably to allow the Congress to pass legislation and presumably that was done in that case.
In the Australian context we would refer to Victorian Stevedoring and General Contracting Company Pty Limited v Dignan (1931) 46 CLR 73, where the regulation that formed the basis for the criminal offence was, having been passed by the House of Representatives, later disallowed by the Senate and, nevertheless, in the judgment of Justice Dixon there is the proposition put forward that the conviction should still stand in those circumstances. I might hand up copies of the pages of Justice Dixon’s judgment to your Honours because I will come to it later.
GLEESON CJ: Yes, thank you.
KIRBY J: Did the other members of the Court agree in that or not?
MR SEXTON: They did not deal with it in that way. I think the Chief Justice Gavan Duffy and Justice Evatt, your Honour, did not deal with the issue in that way.
GLEESON CJ: Thank you.
KIRBY J: Justice Dixon wrote the article on de facto officers. He obviously was greatly exercised by the ab initio theory.
MR SEXTON: Yes. Your Honours, our submission is, therefore, that the second situation to which I referred, that is the one that arises in this case, should be influenced by that line of authority in those various jurisdictions that I have just referred to to lead to the conclusion that the orders would not be a nullity but would remain effective in so far as they can be effective until they are set aside.
KIRBY J: Is that based on the fact that the Federal Court of Australia Act says that the Federal Court is a superior court and that this is a feature conventionally attracted to superior courts?
MR SEXTON: In part, your Honour, yes.
KIRBY J: What is your answer to the stream and the source argument, that is to say that the Parliament cannot, by its own laws, give the Federal Court of Australia a greater authority than it can receive under the Constitution?
MR SEXTON: Your Honour, it is perhaps answered by the approach that is taken by Justice Dixon in Dignan’s Case. What he says, in effect, is that the conviction itself had its own operative force notwithstanding the fact that the ‑ ‑ ‑
GLEESON CJ: He says the:
liability has merged in the conviction, it no longer depends upon the law under which it arose –
That it is at page 106.
MR SEXTON: Yes.
GLEESON CJ: Does the same theory apply in relation to civil judgments?
MR SEXTON: What we put forward here, your Honour, is that it would have that effect in relation to, for example, the civil judgments of the Federal Court in the sense that notwithstanding the failure of the legislation that conferred the jurisdiction on the court, that until that is set aside those decisions and orders would not be nullities. Of course, their effectiveness is highly limited in most cases and I will come to that because it has some importance, in our submission, in relation to section 109 and the arguments that have been put forward in this case by the defendants but it is our submission the decisions themselves are not nullities.
CALLINAN J: Can you explain to me the meaning of the expression to which the Chief Justice has just drawn your attention in Justice Dixon’s judgment at page 106 that the “liability has merged in the conviction”. If the conviction is invalid, how can the fact of it, in some way, make the liability valid? I just do not understand it, I am sorry.
MR SEXTON: Your Honour, it is a question, in a sense, of the validity of the order out of which the conviction arises.
CALLINAN J: But how can the conviction create the liability of the conviction itself? It is founded upon a totally unsound basis.
MR SEXTON: Justice Dixon puts it forward as a case of merger in the text.
CALLINAN J: I know, but I do not understand how using that word can cure it.
MR SEXTON: Well, your Honour, it is really, we would say, only another way of saying that until the order is set aside, subject to the successful appeal, for example, in some other way, that it does have some force. It is not treated as if it ceased to exist.
McHUGH J: One would have thought it was more correct to say, not that the conviction has become the source of his liability, but the conviction has become the consequence of his liability for his offence.
KIRBY J: But if there is no liability there can be no consequence.
CALLINAN J: No ‑ ‑ ‑
KIRBY J: This is really the classic source and stream issue.
CALLINAN J: A formula that just does not advance it at all, in my view.
MR SEXTON: Well, your Honour, it is really the question that is posed by Justice Kirby, whether, in fact, about the stream and the source or ‑ ‑ ‑
KIRBY J: The theory behind it must be that because it has entered the judicial power and because of the importance of the judicial power as established by the Constitution for the central nature of the governments of the country by the rule of law, that it takes on, even though it does not have the source of the Constitution, the source of the judicial power of the Commonwealth, or the judicial power that it has, and that that is a different transmogrified kind of power. That must be the theory behind it.
MR SEXTON: Well, your Honours now put both sides of the argument and we adopt the second one. Your Honours, can I move from that background to the question of section 109 of the Constitution? We have dealt with this in our written submissions but I will briefly go to this issue by way of oral submissions as well. On the question of covering the fields, we say that once it is assumed here that the Commonwealth lack the legislative power to create a court which could determine matters not in federal jurisdiction and that the State legislation only applies to judgments and orders made without jurisdiction, that you do not have any inconsistency in the covering the fields sense.
GAUDRON J: In relation to the whole Act, are you talking now, or to specific sections?
MR SEXTON: Your Honour, looking particularly at section 6 and section 10 at the moment. Now, in relation to an argument for direct inconsistency, which is made in the submissions of my learned friend Mr Jackson, I think in paragraph 36 from memory, we say that there are two ways of dealing with this argument. The first is that section 18 of the Federal Court Act to which my learned friend refers says that:
18. The process of the Court runs, and the judgments of the Court have effect and may be executed, throughout Australia and the Territories.
But given the position that the orders made by the Federal Court in these cases are, for most practical purposes, unenforceable - there may be, for example, in the area of contempt, some qualifications to that, but they are, for most practical purposes, unenforceable - it is our submission that those provisions of the State legislation in section 6, for example, that set up rights and liabilities by reference to those orders, do not in any way impair, alter or detract from that provision or any other provision of the Federal Court Act. It may be arguable that, for example, section 18 of the Federal Court Act does not extend to orders of the kind that have been made in these cases.
KIRBY J: That is difficult to reconcile with the argument of transmogrification by association of the judicial power, because it has taken on a new quality which keeps it alive, at least until the Federal Court sets it aside.
MR SEXTON: Yes, we accept that, your Honour. But the point about section 109 is that it is based on a derogation from federal legislative power.
KIRBY J: But when it talks of a law of the Commonwealth, is it not referring to a valid law of the Commonwealth?
MR SEXTON: Yes, your Honour.
KIRBY J: So does it attach, if there is no valid law of the Commonwealth?
MR SEXTON: Well, we say that it does not attach in this case.
KIRBY J: Even though, on your theory, the order still has legal life in it?
MR SEXTON: Yes.
KIRBY J: Is it a law? Traditionally, law of the Commonwealth has been interpreted to be a statute.
MR SEXTON: It is not a law, in our submission. In normal circumstances, a Federal Court order would trace its authority from a federal law, that is, the Federal Court Act. But we put this submission in two ways, your Honours. The first is that there is not any derogation in the circumstances that we have described; in fact, quite the contrary. One might think that the State legislation, section 6 for example, far from impairing the orders of the Federal Court are, in a way, of course, designed to allow the consequences of those orders to be carried into effect.
KIRBY J: But that is admitting that they are designed to circumvent the Constitution.
MR SEXTON: No, your Honour. They have taken an order of the Federal Court that cannot be enforced and by reference to that, they have set up rights and liabilities at the State level.
KIRBY J: But if it can be done now, why cannot the State Parliament set up the State Complaints Against Police Court and then enact that decisions of that could will be registered and deemed - taken to be, orders of the Supreme Court with lines of appeal to this Court?
MR SEXTON: Well, your Honour ‑ ‑ ‑
KIRBY J: Or Some similar legislation which, as it were, cloaks decisions of other than the Supreme Court judges with the authority of the Supreme Court.
MR SEXTON: Your Honour’s example could not be effective, of course, because this Court would not treat the legislation as having that effect but, in the event, that would perhaps give rise to a particular problem with Chapter III that, we say, does not arise from the present legislation. It is based upon ‑ ‑ ‑
KIRBY J: You have to have a principle by which you decide a
particular case that will attach to other cases.
MR SEXTON: Well, your Honour, it does it in that fictional way but we say that there is no prohibition on that.
KIRBY J: We all know the Federal Court is a good court and therefore we can accept it in this case because it saves a lot of inconvenience, but it has to be done in a way that is compatible with the future creations of special courts and tribunals or individuals and registering their decisions as orders of Supreme Courts of the States, Supreme Courts which are mentioned in the Constitution and are envisaged to be part of the judicial structure of the country.
MR SEXTON: Well, your Honour, if that were to occur, it would raise that question, so it is not raised in this legislation. Your Honours, that is the first basis on which we deal with the direct inconsistency argument that is put by my learned friend, Mr Jackson.
The second way in which we say that it can be answered, is to say that, in any event, what are being set against each other here are not really the two statutes, that is, the Federal Court Act and the State legislation, but, in fact, if one were to get to this stage, two sets of court orders. Now, in relation to those orders, assuming that there was some distinction between them, one might think that could arise under section 10 of the legislation, if there was a variation of the position, as it had been set out in the Federal Court orders. It is, in fact, of course, a variation of the rights and liabilities created by section 6. But, in the circumstances of that variation, the way in which that issue would be resolved, assuming that the Federal Court order was still on foot, had not been set aside, would really be by the principles of conflicts of laws and comity between the courts.
It is not, in our submission, a case where that particular still extant order of the Federal Court, by reason of its authority under the Federal Court Act, creates an inconsistency between the Federal Court Act and, for example, section 10 of the State legislation. In other words, it is to be distinguished, in our submission, from the kind of situation where a federal industrial award, authorised by the now presumably the federal Industrial Relations Act, can be in conflict with, and give rise to inconsistency with, State legislation.
Your Honours, we say that there are no other sections of the legislation – this is a matter raised by Justice Gaudron - which would give rise to an inconsistency issue, dealt with section 6 and section 10. There are no other sections pointed to, in our submission, that would give rise to that. My learned friend from Victoria has dealt with section 11 in that context and so we would say that none of the sections, in fact, would provide an attack by reason of section 109.
On that question of the orders between the courts, we would also rely upon what Justice Dixon said in Dignan, and I appreciate what Justice Callinan has said, but we rely upon that, also on that last point to support the proposition that what one has is an inconsistency, if that is what it is, between two sets of orders of courts and not between a State statute and a court order of the Federal Court.
GAUDRON J: But that cannot be right, can it, Mr Solicitor? The operational inconsistency might be between the two orders, but the foundational inconsistency has to be between statutes, has it not, in a case such as this? One, the Federal Court Act and, two, this particular one. You cannot avoid section 109 just by saying, “We are not looking at laws here, we are looking at orders”.
MR SEXTON: As your Honour appreciates, we avoid it in two ways, but that is one of the ways in which we avoid it.
GAUDRON J: I think that is directly inconsistent with what was determined in the Kakariki, and I think it does not stand with CJW v DJW.
MR SEXTON: Your Honour, the Commonwealth submissions refer to operational validity and we would rely on that as well in the sense that operational inconsistency does not arise here because, of course, once a Federal Court order was set aside, that kind of inconsistency would fall away.
GAUDRON J: A State law which operates to confer power on a State tribunal to impair an order of the Federal Court which, pursuant to the Federal Court Act takes effect according to its terms throughout Australia, must involve inconsistency. You actually only see the inconsistency at the point of the collision. But that is where the inconsistency must lie. It is still an inconsistency between laws, is it not?
MR SEXTON: Well, your Honour, we say we separate the order from the legislation in the way that Justice Dixon did. We also say, of course, that it does not impair it in this context for the reasons that – because of the nature of the orders or what has become of the orders, in effect. I understand what your Honour says about the second basis.
GAUDRON J: Well, I understand what you are saying except I do not see how you can say it – again, I do not think it arises in this case though – in relation to a power in the State Supreme Court to modify or vary.
MR SEXTON: Well, I understand what your Honour says about the second basis. We put it, but the argument that your Honour puts forward is, of course, the argument as put against us.
GAUDRON J: Yes.
MR SEXTON: Your Honours, one final matter unconnected with that last submission. Justices Hayne and Kirby referred at various times to the legislation passed in the wake of Boilermakers and whether there was any challenge to it. The only challenge that we were able to find was when the question was raised as to whether proceedings begun in the old Conciliation and Arbitration Court could be continued in the new Commission, and it was dealt with in a very perfunctory way and rejected quite brusquely, but it is a decision of Justice Foster sitting as the Commission, The Merchant Service Guild of Australia v Adelaide Steamship Company and Others 88 Comm AR 137.
KIRBY J: This was sitting in the post‑1956 Commission?
MR SEXTON: Yes, in 1957.
GAUDRON J: In many respects that will not tell anything, because ultimately the question would have been whether there was an industrial dispute and that would have been the only relevant jurisdictional question, not where proceedings were.
MR SEXTON: No. Your Honour, I was really only supply it for information. The report does not really tell you anything, that is quite true.
GAUDRON J: Yes.
MR SEXTON: Those are our submissions.
GLEESON CJ: Thank you, Mr Solicitor. Mr Gageler.
MR GAGELER: Your Honours, I propose to deal orally with two topics, one is the effectiveness of Federal Court judgments given in State jurisdiction which is the issue raised by the submissions of the Solicitor‑General for South Australia and the Solicitor‑General for Victoria. The other topic is section 109 inconsistency. In relation to the first topic my argument will proceed in three stages. The first stage is to look very briefly at the position of superior courts in the United Kingdom before 1900, the second is to look at the position of federal superior courts in the United States before and after 1900, and then, thirdly, to look at the position directly under Chapter III of the Constitution and there to distinguish between the creation of a Federal Court and the clothing of a Federal Court with the judicial power of the Commonwealth under section 71 and the conferral on such a court of subject matter jurisdiction under section 77(i).
The point to which the argument will ultimately go is that in the case of a court created under section 71 as a superior court, the determination by that court, explicitly or implicitly, that it has subject matter jurisdiction under section 77(i) is itself an exercise of the judicial power of the Commonwealth conferred by 71, with the ordinary attendant consequences of such an exercise of judicial power, in particular, conclusiveness, subject to appeal under section 73, or the availability of prerogative relief under section 75(v) in an appropriate case.
McHUGH J: But the argument is circular, is it not?
MR GAGELER: Not at all.
McHUGH J: Your conclusion is inherent in your premise.
MR GAGELER: Your Honour, I was letting you into the conclusion so you could see where the linear argument is going and, starting with the position in the United Kingdom before 1900, the traditional distinction between superior and inferior courts, whatever its origins, recognised three relevant and related characteristics of a superior court. These are set out in the submissions of the Solicitor-General for South Australia.
McHUGH J: But one of the characteristics was that the writ of prohibition could not go to that.
MR GAGELER: No, your Honour, no.
McHUGH J: It was not?
MR GAGELER: No.
McHUGH J: Well, prohibition cannot go to one of the superior courts, can it?
MR GAGELER: Yes, and that was my point, your Honour. There were three relevant related characteristics. One was that the court had jurisdiction, we would prefer to say power, to determine its own jurisdiction. The second was that it was presumed to act within jurisdiction and the third was that its orders were not subject to collateral challenge but it was not an essential characteristic of a superior court, either that its jurisdiction be unlimited or that it not be amenable to prerogative relief and in the cases under section 75(v) that point has often been made, for example, by Justice Deane.
GUMMOW J: He talked about the Admiralty Court, I think.
MR GAGELER: Yes, and the Admiralty Court ‑ ‑ ‑
GUMMOW J: And is continually under prohibition attack.
MR GAGELER: Indeed, and in James v South Western Railway Company (1872) LR 7 Ex 287 at 290 in the decision of Justice Willes, his Lordship said: “Yes, this is a superior court but prerogative relief runs because it is a court of limited jurisdiction” and that is the position of a lot of courts, his Lordship said.
McHUGH J: Yes, I appreciate that particular point but could prohibition go to the Court of Exchequer? Could it go to Kings Bench? Could it go to Chancery?
MR GAGELER: The answer is, I think, no, but the reason for that is not because the jurisdiction of those courts was unlimited. Indeed, they were not.
GUMMOW J: Well, they copped a common injunction from time to time.
MR GAGELER: Yes, that is right.
GUMMOW J: They did not like it either.
MR GAGELER: No, and indeed, although the language of unlimited jurisdiction is often used in relation to the court system before the Judicature Act in the United Kingdom, it is really difficult, in our submission, to characterise the Court of Chancery, which dealt with matters in equity, as a court of unlimited jurisdiction or the Court of Kings Bench, which dealt with matters at common law as a court of unlimited jurisdiction or, indeed, the Court of Exchequer Chamber, which had a relevantly confined jurisdiction.
The point of all that is that, when I do get towards the end of the argument to section 71 of the Constitution, it is, in our submission, not inconsistent with that provision of the Constitution empowering the Parliament to create Federal Courts which have the three relevant characteristics of a superior court, either that the justices of such courts are amenable to constitutional writs under section 75(v) or that the jurisdiction of such courts is necessarily limited to the subject matters that can be conferred under section 77(i).
GUMMOW J: Now, I interrupted you from giving us the reference to Justice Deane’s judgment in Gray.
MR GAGELER: Yes, that is 157 CLR 351 at 385.
GUMMOW J: Now one problem that arises in my mind in a way is trying to connect what is said to flow from the power of the Parliament to erect a Federal Court as a court of superior court of record, and what then flows from that as to the efficacy of its orders. The interconnection, if there is any, with the ideas behind what Sir Owen Dixon was saying in Hickman 70 CLR 616. He does talk about judicial power at one stage and then he gets away into the administrative area. There is this notion of bona fide attempt, provided it is bona fide attempt.
MR GAGELER: Yes.
GUMMOW J: I do not ask you to deal with it now,…..before lunch.
MR GAGELER: No, your Honour, I propose to deal directly with that topic, but in the order that I suggested.
GLEESON CJ: Is that a convenient time, Mr Gageler.
MR GAGELER: Yes it is, your Honour.
GLEESON CJ: We will adjourn until 2.15 pm.
AT 12.43 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.23 PM:
GLEESON CJ: Yes, Mr Gageler.
MR GAGELER: Can I deal with the position in the United States and take your Honours back to Chicot County Drainage District 308 US 371. The case is particularly strong because it is a case where the District Court purported to exercise a jurisdiction under a statute which was subsequently held to be invalid and it was held by the Supreme Court that the decree of the District Court was not open to collateral attack. If your Honours turn to page 374, your Honours will see at the top of the page a reference to Ashton v Cameron County District. That was the case in which the relevant statute had been held to be unconstitutional by the Supreme Court.
Significantly, the statute held to be unconstitutional was not simply a statute that regulated the rights of the parties. It was the statute that purported to confer the jurisdiction on the District Court. Continuing on from that reference your Honours will see a long passage that begins:
The courts below have proceeded on the theory that the Act of Congress, having been found to be unconstitutional, was not a law.
That passage has been seen from time to time as the origins of the doctrine of prospective overruling and it was, indeed, part of that passage that your Honour Justice McHugh picked up and quoted in Peters and Love 16 NSWLR at page 38 and it is that passage that has a somewhat chequered history in the United States. But your Honours will note at the top of the next page, beginning with the last two words on page 374, what the court said was:
Without attempting to review the different classes of cases in which the consequences of a ruling against validity have been determined in relation to the particular circumstances of past transactions, we appropriately confine our consideration to the question of res judicata as it now comes before us.
Their Honours then went on to decide this case on that narrow basis.
McHUGH J: But it is a very pragmatic decision and it was a departure from Norton and one would be turning a blind eye to the fact that a few months before this Court handed down this decision it had just come through the stacking plan of Roosevelt who wanted to put 11 or 13 justices on the court until some of the more senior ones retired. So the court must have been well and truly alive to the problems if it was going to declare invalid orders and judgments.
KIRBY J: This was to overcome the uncongenial four horsemen.
MR GAGELER: Your Honours, it is my intention to endeavour to persuade your Honours that the case is entirely consistent with the authorities that preceded it and succeeded it, that it involves no departure from either principle or authority in the United States and I cannot comment and will not comment on what may have motivated the justices.
McHUGH J: No, I am not suggesting that was it but, I mean, it is part of the context in which the justices are dealing – like it is in this particular case, to hold that the judgments are bad and nullities in the true sense of the word would have devastating consequences, something judges would want to avoid.
MR GAGELER: Yes, and your Honour, that may be a reason of policy for accepting what, in my submission, is established by both principle and authority. But, your Honour, we have set out in our written submissions considerations of policy. I propose to confine my oral submissions to authority in principle.
Your Honours, the relevant holding in the case appears at the end of a passage that begins at page 376 beginning with the heading “Second”. That passage has been substantially read to your Honours. I ask your Honours to note a couple of things about it. First, the reference at page 376 to M’Cormack v Sullivant – I will come to that in a moment. The reference at the bottom of page 376 to Des Moines Navigation – I will come to that as well. And then the two sentences critical for present purposes at page 377 which encapsulate the holding of the court. In the fourth line at page 377:
The court has the authority to pass upon its own jurisdiction and its decree sustaining jurisdiction against attack, while open to direct review, is res judicata in a collateral action.
Reference to Stoll v Gottlieb – and I will take your Honours to that:
Whatever the contention as to jurisdiction may be, whether it is that the boundaries of a valid statute have been transgressed –
importantly:
or that the statute itself is invalid, the question of jurisdiction is still one for judicial determination.
Their Honours’ reference back to Stoll v Gottlieb is significant because there your Honours will see what is, in our submission, the underlying principle which is worked out in Chicot. Your Honours, I hope, have Stoll v Gottlieb ‑ ‑ ‑
GLEESON CJ: Just before you pass, Mr Gageler, from Chicot, what if the question of jurisdiction is not one that has been judicially determined but has been assumed?
MR GAGELER: That is addressed in Stoll v Gottlieb and it makes no difference. It makes no difference because of the status of the superior court of record as allowing that to be assumed.
HAYNE J: And again, still staying with Chicot, what significance, if any, is to be attached to their Honours’ reference at 374 to the effect of the subsequent ruling as to invalidity having to be considered in various aspects, et cetera?
MR GAGELER: What I was attempting to say about 374 is that whatever wide application that passage may have potentially had, and indeed has had in the United States jurisprudence, their Honours were confining themselves to a particularly narrow application, that is the collateral attack doctrine.
McHUGH J: One thing that you have to bear in mind with these United States authorities is that Article 3 has no equivalent of section 75(v). So prohibition is not a constitutional remedy in the United States.
MR GAGELER: Yes, and in my submission that makes no difference to the application in Australia of this doctrine.
McHUGH J: Well, it seemed to make a difference to Justice Dawson in DMW.
MR GAGELER: Yes. Him alone. Justice Dawson in DMW was not adopting the distinction that is sought to be made here by South Australia ‑ ‑ ‑
McHUGH J: No, I know, but his reasoning supports it.
MR GAGELER: No, well, your Honour, his reasoning would support a much wider and rather dramatic outcome and that is that any judgment of the Federal Court or the Family Court that was given outside jurisdiction, whether it be the statutory limits of jurisdiction, constitutional limits of jurisdiction or, indeed, the factual limits of jurisdiction, would be a nullity. That is inconsistent with the reasoning of all of the other judges in the cases where his Honour had taken that view.
I was coming to Stoll v Gottlieb 305 US 165. This was a case, the details of which do not very much matter. The relevant passage that was referred to in Chicot is the passage at page 171 to page 172 and may I simply pick up the reasoning there. Your Honours will see it beginning in the last full paragraph at page 171 where it is said:
A court does not have the power, by judicial fiat, to extend its jurisdiction over matters beyond the scope of the authority granted to it by its creators. There must be admitted, however, a power to interpret the language of the jurisdictional instrument and its application to an issue before the court. Where adversary parties appear, a court must have the power to determine whether or not it has jurisdiction of the person of a litigant, or whether its geographical jurisdiction covers the place of the occurrence under consideration. Every court in rendering a judgment, tacitly, if not expressly, determines its jurisdiction over the parties and the subject matter. An erroneous affirmative conclusion as to the jurisdiction does not in any proper sense enlarge the jurisdiction of the court until passed upon by the court of last resort, and even then the jurisdiction becomes enlarged only from the necessity of having a judicial determination of the jurisdiction over the subject matter.
Your Honours will see, particularly at the bottom of page 172, a justification which might be termed policy, or it might be termed principle, where it is said:
Courts to determine the rights of parties are an integral part of our system of government. It is just as important that there should be a place to as that there should be a place to begin litigation.
So that their Honours were tying the doctrine that preclude collateral attack to the role of the courts under the Constitution and the finality of the process of litigation. There was a reference also in Chicot to Des Moines Navigation, which I hope your Honours also have. It is significant for present purposes because of its date, 1887. This was a case in which a lack of diversity jurisdiction was apparent on the face of the record of a Federal Court. It was held, nevertheless, that the order of the court was not open to collateral attack.
If your Honours go to page 557 your Honours will see some reference to history at the bottom of the page about six or seven lines out. What the court said was that:
In 1825, McCormick v Sullivant…..was decided by this court. There a decree in a former suit was pleaded in bar of the action. To this a replication was filed, alleging that the proceedings in the former suit were coram non judice, the record not showing that the complainants and defendants in that suit were citizens of different States; but this court held on appeal that “the courts of the United States are courts of limited, but not of inferior, jurisdiction. If the jurisdiction be not alleged in the proceedings, their judgments and decrees may be reversed for that cause on a writ of error or appeal; but until reversed they are conclusive between the parties and their privies.” “But they are not nullities.” There has never been any departure from this rule.
GUMMOW J: It is the next paragraph that is significant in the way that ‑ ‑ ‑
MR GAGELER: The next paragraph was – their Honours said there:
It is said, however, that these decisions apply only to cases where the record simply fails to show jurisdiction.
Their Honours held in this case, no, that is wrong.
GUMMOW J: Yes.
MR GAGELER: So my point, your Honours, is that the relevant holding in Chicot was one that was part of a consistent stream of authority before and after 1900 in the United States and the most recent relevant application of that aspect of the judgment in Chicot that we have been able to find was in a case called Willy v the Coastal Corp (1992) 503 US 131 at 137. I simply give your Honours a reference.
McHUGH J: What is the position with, say, the County Court of Victoria or the District Court of New South Wales when it is invested with federal jurisdiction and invalidly invested with federal jurisdiction? Do you draw a distinction between the common law position in the division under the Constitution or do you say the judgment in the District Court of County Court is of no effect?
MR GAGELER: I am assuming that those courts were inferior courts, your Honour.
McHUGH J: Yes.
MR GAGELER: No, I would say that the ordinary common law consequence of being an inferior court would apply to their judgments.
May I take your Honours as well, as a link between the United States authorities and Chapter III to which I am coming, to an extract from Quick & Garran, which I hope your Honours also have, a single page, page 726, where, in the commentary on section 71 of the Constitution, significantly, the authors say, at about point 8 of the page:
In the American Constitution, the courts which Congress may create are styled “inferior courts.” It has been held, however, that the Circuit Courts of the United States, though “inferior” in the sense of being subordinate to the Supreme Court, are not “inferior courts” in the common law sense – i.e. “courts of specific and limited jurisdiction, which are erected on such principles that their judgments when taken alone are entirely disregarded, and the proceedings must show their jurisdiction.” In other words, the circuit courts are courts of limited, but not of inferior, jurisdiction; and their judgments, if without jurisdiction, cannot be treated as nullities, but are valid unless and until reversed.
So the authors, in our view, correctly assumed that the United States’ consistent line of authority applying in relation to Article 3 courts would be translated by section 71 to courts created by the Commonwealth Parliament.
Coming to Chapter III itself, it is, in our submission, significant, and overlooked by the submissions by the Solicitor‑General for South Australia, that there is a distinction between, on the one hand, the power of the Commonwealth Parliament to create a Federal Court in which is invested the judicial power of the Commonwealth – that power being conferred by section 71 – and, on the other hand, the power of the Commonwealth Parliament under section 77(i) to define the jurisdiction of Federal Courts, with respect to the limited subject matters referred to in sections 75 and 76.
In our submission, structurally, one might think logically, the creation of a Federal Court and the clothing of a Federal Court with the judicial power of the Commonwealth, is separate from and antecedent to the conferral of subject matter jurisdiction on such a court under section 77(i). Indeed, that is the way in which the Federal Court of Australia Act is structured, the court itself being created by section 5 of the Federal Court of Australia Act. Section 19 of that Act, perhaps redundantly, declaring that the jurisdiction of that court is such as may be conferred upon it by laws of the Parliament. The nature of judicial power is here significant and ‑ ‑ ‑
GUMMOW J: Are you saying, Mr Gageler, so that I can understand, are you saying that the power in 71 to create a Federal Court which necessarily has vested then in it the judicial power of the Commonwealth, that that brings with it the Chicot doctrine or that it is a matter for the Parliament to choose whether the court is to have or not to have this added characteristic?
MR GAGELER: I do not say, your Honour, that the Commonwealth Parliament could not create an inferior court in the exercise of the power conferred by section 71. What I do say, the difference between an inferior court and a superior court is that the judicial power of an inferior court extends only to matters within its jurisdiction; the judicial power of a superior court extends to determining its own jurisdiction. Same judicial power, just a question of the scope, depending on the nature of the court.
KIRBY J: There is no such distinction made in the chapter, but you say it is brought in by the use of the word “courts”.
MR GAGELER: It is brought in by ‑ ‑ ‑
KIRBY J: “Such other federal courts”.
MR GAGELER: Yes. It is brought in by the broad scope of the power conferred. Your Honour is saying there is no express power to create a court?
KIRBY J: No. There is no express distinction or delineation in Chapter III.
MR GAGELER: No. But, your Honours, the power conferred by section 71 has been considered, albeit in passing, by this Court on two occasions, and may I give your Honours the references to those? One is in Cockle v Isaksen (1957) 99 CLR 162 to 163. I will read your Honour the two sentences:
Section 71 no doubt authorises the creation of a federal court, but in spite of occasional judicial observations that may possibly suggest the contrary the jurisdiction which a federal court so created may exercise cannot come from s. 71 alone. It must be conferred and defined by the exercise of further legislative power.
McHUGH J: I referred to it in Gould v Brown, that passage.
MR GAGELER: Yes, and the other passage, your Honours, was in the Boilermakers’ Case itself in this Court, (1955) 94 CLR at 278 - again two sentences which I will read to your Honours:
The judicial power, like all other constitutional powers, extends to every authority or capacity which is necessary or proper to render it effective. The judicial power of which s. 71 speaks is not to be defined or limited in any narrow or pedantic manner.
Their Honours then go on ‑ ‑ ‑
McHUGH J: Does not the argument run into this problem, that if it is inherent in the nature of section 71, how can the Parliament limit it? Take the federal Magistrates Court. Can the Parliament say it is a court of inferior jurisdiction?
MR GAGELER: Yes.
McHUGH J: Consistently with your argument about section 71.
MR GAGELER: Yes, your Honour, because, as I said in answer to Justice Gummow, the question is not as to the quality of the judicial power conferred but as to the scope of the operation of the judicial power of the Commonwealth in relation to different sorts of courts. It is part of my argument that the power within section 71, read against the background of the common law, would allow the Parliament to create a court with the characteristics of a superior court of record at common law subject to the constitutional constraints imposed by 75(v) and 73 ‑ ‑ ‑
McHUGH J: But is not the nature of a court and judicial power, they are two separate entities, are they not?
MR GAGELER: No, not entirely, your Honour, because my point here is that there is an overlap; but because when a superior court comes to determine its own jurisdiction it is exercising judicial power. That is the nature of the court and the way in which it exercises judicial power are very much intertwined.
McHUGH J: But to the extent to which it can determine its own jurisdiction depends upon the nature of the entity which is set up.
MR GAGELER: Yes.
McHUGH J: Section 5 of this legislation says this is a superior court of record. Now, it is that statement which then gives it the power to determine its own jurisdiction on one argument.
MR GAGELER: Yes, that is correct.
McHUGH J: But does that not arise, not from any particular judicial power, but from the creation of the court?
MR GAGELER: Yes.
McHUGH J: The judicial powers to be vested in it, but as Cockle v Isaksen points out, section 71 provides for the creation of the court. But the judicial power has to come from some other source.
MR GAGELER: No, your Honour, it says the jurisdiction must come from some other source. Your Honour, what I am saying was perhaps better put by Justice Brennan in The Queen v Ross‑Jones; Ex parte Green 156 CLR 185 at page 215 - may I ask your Honours to turn to that – where his Honour said at the bottom of the page:
The Family Court is a superior court of record (Family Law Act 1975 (Cth), s.21(2)), though it is a court of limited jurisdiction. The two characters are not inconsistent…..It has jurisdiction to determine – and to determine judicially – whether it has the jurisdiction to entertain a particular application or to make a particular order. Where the substantive jurisdiction of the court depends upon facts, the court may find the facts – and find them judicially – in the exercise of its jurisdiction to determine the extent of its substantive jurisdiction -
The entirety of the following page, indeed, the following two pages are significant, but I will not read them. May I simply ‑ ‑ ‑
McHUGH J: But jurisdiction is only authority to decide. You have to ask yourself: where does the court gets its authority to decide? Your argument - I am not quite sure I am following it – but where does it get its authority to decide from, its creation under section 71 or by reference to the exercise of further legislative powers as said by the Court in Cockle?
MR GAGELER: Your Honour, it gets its subject matter jurisdiction from the exercise of further legislative power under section 71(1). It gets its authority judicially to determine whether a matter coming before it falls within the constitutional limits of its own jurisdiction from section 71. That is an ‑ ‑ ‑
McHUGH J: Well, I thought that was what Cockle denied. Cockle says, at the bottom of 162:
Section 71 no doubt authorises the creation of a federal court, but in spite of occasional judicial observations that may possibly suggest the contrary the jurisdiction which a federal court so created may exercise cannot come from section 71 alone –
unless you can get something out of the word “alone”.
MR GAGELER: I do. Your Honour ‑ ‑ ‑
GUMMOW J: But Cockle v Isaksen was all about resisting a particular argument about the receipt of jurisdiction for a Federal Court to hear an appeal from a State court.
MR GAGELER: Indeed, your Honour.
GUMMOW J: So circumventing section 77. It is to that that the judges are responding in that passage that you have referred ‑ ‑ ‑
MR GAGELER: Indeed, and I had prefaced my remarks by saying that there had only been passing comment in relation to section 71 in this context. But, your Honour, nothing in that case undermines and, indeed, the two sentences, in my submission, support the notion that, first, the creation of the court is something that occurs under section 71; secondly, that the exercise of judicial power is involved in determining whether or not jurisdiction is validly conferred on the court under section 77(i).
GUMMOW J: But do you say that the Parliament could create a Commonwealth inferior court and explicitly to deny it a power to punish for contempt of its orders? You might run into Torney’s Case at that stage.
MR GAGELER: I might, your Honour. I do not need to say that for the purposes of making my present argument. Your Honours, I was going to direct attention particularly to what Justice Brennan said towards the bottom of page 217 where his Honour said in the second sentence of the last full paragraph:
The jurisdiction of a superior federal court to determine the constitutional limits of its own substantive jurisdiction and to determine those limits conclusively subject only to the intervention of this Court must be exercised whenever an application is made to that court -
the assumption there being that the determination of the limits of its jurisdiction is a constitutional determination and is something that itself occurs in the exercise of judicial power.
McHUGH J: Well, that is reading a lot into it. Even inferior courts have jurisdiction to determine the limits of its jurisdiction.
MR GAGELER: But not, your Honour, conclusively.
McHUGH J: Not conclusively, no.
MR GAGELER: That is the point. What I am reading into that, your Honour, is only this, that it is the unique and essential feature of judicial power that it is conclusive. If I can then come to Hickman’s Case 70 CLR and the question raised by your Honour Justice Gummow earlier today and that is whether my argument encounters any difficulty with the passage in the judgment of Justice Dixon at page 616.
GUMMOW J: I am not sure I was suggesting difficulty.
MR GAGELER: No, your Honour, but your Honour wanted me to address it and that is what I am turning to.
GUMMOW J: Yes. It is just that the statement in Dignan is rather Delphic and this may be rather Delphic too.
MR GAGELER: It is a little, your Honour.
GUMMOW J: It is a mistake to dismiss them just saying they are Delphic.
MR GAGELER: I was not proposing to do that.
GUMMOW J: Often enough application yields some gold in Sir Owen’s judgments.
MR GAGELER: I agree. What I wanted to do was first to draw attention to the sentence that is at the top of page 616 where his Honour says:
It is, of course, quite impossible for the Parliament to give power to any judicial or other authority which goes beyond the subject matter of the legislative power conferred by the Constitution.
That may be readily accepted and nothing I have said was intended to in any way contradict that, but accepting what his Honour there said, the question is one of who decides and the structure of Chapter III, section 71 in particular, is that the question of the constitutional limits of a court’s jurisdiction in a particular case are for that court to determine in the exercise of judicial power subject to section 73 and subject to section 75(v). His Honour significantly there was not addressing the question of the scope of a superior court’s jurisdiction to determine its own jurisdiction. His Honour was dealing with section 75(v) in the context of I think an administrative body.
GAUDRON J: Perhaps in a sense he was, but – although leaving it to one side, as it were – perhaps what his Honour was saying is, “Well, you can set up a court in such a way that so long as it looks like it is acting as a court, it is a bona fide attempt to exercise its jurisdiction, it would not be regarded as invalid”. Perhaps in a sense it supports you.
MR GAGELER: In a sense if it does, your Honour, I adopt it. What I wanted to show was that it did not harm me.
HAYNE J: That is a very suspicious approach, too, I am afraid.
MR GAGELER: May I say this, your Honour, adoption of what has been subsequently labelled the “Hickman principle” was not part of the argument that I was presenting on the scope of section 71. But it is not inconsistent with it, either.
McHUGH J: I must say I am always very suspicious about arguments that the Parliament has power to limit the jurisdiction of the courts because where is this argument taking us? In some way that cut down our power under section 75(v) in some way?
MR GAGELER: No, not at all, your Honour. There may be ‑ ‑ ‑
McHUGH J: It is one thing to say that the Constitution mandates that Federal Courts have this power, or they do not have this power, but your argument is that Parliament can intervene and say whether or not a Federal Court can do this or that. If you can do it with a Federal Court created under section 71, it seems to me at the moment you probably could do it with respect to the High Court.
MR GAGELER: No, your Honour, for this reason: the High Court is created by section 71 itself.
GLEESON CJ: No, section 71 mandates the creation of the High Court.
MR GAGELER: I am sorry, your Honour, I put it badly. Whereas section 71 has a different operation in relation to Federal Courts created by the Parliament, that is Parliament has the option of creating courts or not and of creating, in our respectful submission, courts having different characteristics provided that they are the characteristics inherent in the traditional definition of a court. Thirdly, it has a different operation in relation to State courts, and, of course, there are many authorities of this Court that says that in conferring federal jurisdiction on State courts, the Parliament of the Commonwealth has to take State courts as it finds them whether they are inferior or superior courts.
McHUGH J: I understand what you are putting, but it is one thing to say the Constitution carries across this notion of superior courts as part of judicial power or it does not, but you seem to be injecting into it the right of the Parliament to say whether or not a court will have this particular jurisdiction.
MR GAGELER: Your Honour, I am injecting into it the ability of the Parliament to create courts which have the traditional characteristics of a superior court and that is as far as my argument for present purposes needs to go because that is all that we are concerned with.
McHUGH J: But the corollary is that it can also limit its jurisdiction in some way.
MR GAGELER: No, not limit its jurisdiction, your Honour, define the sort of court that it is as an inferior court.
GAUDRON J: If you put the weight of your argument on “define” in section 77 and, in one sense, the power to determine your own jurisdiction until set aside on appeal does seem to me to be jurisdiction and not judicial power necessarily – I mean, to involve judicial power but if it is to have a label put on it, it is jurisdiction – if you put it in that category then 77 does enable, although it is with respect to any of the matters mentioned in the last two sections, they can define the jurisdiction of any Federal Court but not the High Court.
MR GAGELER: Yes. I would adopt that but perhaps as a secondary answer to his Honour Justice McHugh. Nothing that I have said was intended to be inconsistent with the supremacy of the Constitution, Marbury v Madison or the Communist Party Case. The point in those cases, as his Honour Justice Gummow made this morning, was not so much the question of the supremacy of the Constitution. We can all accept that. The question in Marbury v Madison was who decides and the answer in that case which has always been accepted as axiomatic in this country is that the courts must decide and ironically, but significantly for present purposes, the actual decision in Marbury v Madison was a decision as to the jurisdiction of the Supreme Court. It was there held that it was not constitutionally permissible for that court to be conferred with jurisdiction by Congress to issue a writ of prohibition or mandamus.
McHUGH J: Mandamus.
GUMMOW J: And hence 75(v).
MR GAGELER: Hence I was tying it back to 75(v). That is the explanation for 75(v) being in its current form. So far as certiorari is concerned, I cannot give your Honours an adequate explanation but I think it may have just been overlooked because 75(v) was put in specifically to address what was perceived as the problem emerging from Marbury v Madison. Your Honours, that substantially completes what I wanted to say on the question of the validity of Federal Court judgments.
May I turn to section 109 inconsistency? It is here necessary to consider separately direct inconsistency and indirect inconsistency and I will turn to them in that order but before doing so it is also critical to identify at the start what are the rights and liabilities conferred by the State Act relevantly here. Taking sections 6 to 10 as a group, it is important that section 6 does nothing at all to an ineffective judgment of a Federal Court.
There has, unfortunately, been a tendency to speak in terms of transmogrification. That is not what section 6 does. It would be more appropriate, in our submission, to speak in terms of duplication because what section 6 does is to create new parallel and substantially identical rights and liabilities as a matter of State law, those new rights and liabilities then being able to be exercised and enforced, appealed from or varied under State law.
That is very important when one comes to the question of inconsistency, because there is no direct inconsistency in simply having the same rights and liabilities declared or imposed by a Commonwealth law and a State law. We have given your Honours a number of cases in footnote 46 – it is a fairly standard proposition. Another very useful case, may I refer to, is Winneke; Ex parte Gallagher 152 CLR 211 at pages 218, 224 and 234 to 234. It is the case that an operational inconsistency may well occur and it may well occur in at least two circumstances: one would be if the identical rights and liabilities were sought to be enforced by different means; another would be if the rights or obligations with respect to a particular subject matter of an order were varied under the State law so as to be different from the rights or obligations subsisting under a voidable, but not set aside, judgment of the Federal Court.
The consequence in those circumstances, however, would be simply an operational inconsistency, which would result in the invalidity or suspension of the State rights, for so long as the Commonwealth order remained in place and not set aside. Your Honours, we have given a number of references but, on reflection, the most useful reference to operational inconsistency in this context, that is the context of court orders, we have found is in P v P, 181 CLR 583 at 602 to 603.
Moving from direct inconsistency to indirect inconsistency, the question is then whether there is manifest, in Commonwealth law, an intention to cover any relevant field, and it is undoubtedly the case, in our submission, that the Federal Court of Australia Act is to be read as intending to cover the field of the making, variation, revocation, setting aside and suspension of orders of the Federal Court. The point is that the State Act does not enter into that field.
So far as the conferral of jurisdiction is concerned, it may be, and it is the case that in some circumstances, jurisdiction with respect to particular subject matter is conferred on the Federal Court to the exclusion of State courts. That is not this case, and was never intended to be the operation of the cross-vesting provisions.
GUMMOW J: Now, on the first branch, operational inconsistency, that would be avoided and the occasion for it would not arise if the relevant Federal Court order first had been set aside by the Federal Court.
MR GAGELER: That is correct, yes.
GUMMOW J: But maybe as a matter of practice that is what would and should be done if one was going off to appeal to a State Court of Appeal. The State Court of Appeal would not then be in the embarrassing position of being faced with an order that it had to set aside, and thereby faced with an operational inconsistency question.
MR GAGELER: Yes, I accept that, your Honour.
KIRBY J: But the statute does not draw that distinction, though, does it? The Act does not draw that distinction? The Act does not posit that as a precondition?
MR GAGELER: That the Federal Court order be set aside?
KIRBY J: By the Federal Court, pursuant to the Federal Court Act and the appeal provisions there.
MR GAGELER: No. Your Honour will see that in paragraphs 4.13 and 4.14 of our written submissions we do posit an alternative construction of the definition of “ineffective judgment” in section 4 but that is very much a fall back position and our primary position is that ineffective judgments are picked up even if they are valid and they are then used as the template for the making of the rights or liabilities under State law that occurs by force of section 6. On the question of inconsistency, can I say one further thing and that is about the question of whether a right of appeal may be inconsistent with the jurisdiction conferred on the Federal Court by section 24 of the Federal Court of Australia Act.
The answer lies in recognising the scope of section 24 when it allows for appeals from judgments. A judgment in that context has the same meaning that has been held as the language of section 73 of the Constitution, it means binding orders, it does not mean reasons for judgment. Unless there is something further I can add, those are our submissions, your Honours.
GLEESON CJ: Thank you, Mr Gageler.
GAUDRON J: I am sorry, did you want to say anything about severability of section 11 in the event that it were thought that that extended to appeal proceedings and that there could thereby come about an inconsistency?
MR GAGELER: Yes, your Honour. I adopt the construction of section 11 advanced by the Solicitor-General for Western Australia, that is, that it does not address appeals at all. If it did seek to address appeals then I would accept that there would be an inconsistency with section 24 in those circumstances but there is no difficulty, in our submission.
GUMMOW J: What species of inconsistency?
MR GAGELER: Direct. There would be an attempt to detract from, impair, et cetera, the operation of the appeal to the Full Court of the Federal Court.
GUMMOW J: Even though the grounds are different?
MR GAGELER: Yes, your Honour. If section 11 truly provided for an appeal from a judgment of the Federal Court and not simply as the other provisions of sections 6 to 10 provide for variation of appeal of rights which are separately created under the State law.
GAUDRON J: What it would apply to, as I read it, is the transferring of an instituted appeal to the Supreme Court of a State, an instituted appeal which had not been determined, on one possible reading, at least, if you take proceeding to include an appeal proceeding.
MR GAGELER: Yes. An appeal from what? If it is an appeal from the actual judgment of the Federal Court, at first instance, then it would be beyond State constitutional power. If the Court pleases.
GAUDRON J: Thank you.
GLEESON CJ: Yes, thank you, Mr Gageler. Mr Whitington.
MR WHITINGTON: If the Court pleases, my client is in the position where it has provoked all this which, in a sense, is regrettable, but we would take a step back and remind the Court that all the plaintiff has sought to do is to employ section 11 of the Act to commence a proceeding in the Supreme Court. Now, invoking section 11 of the Act has the obvious advantage to the plaintiff that the commencement of the action in the Supreme Court will relate back to 20 April 1994 by virtue of the operation of section 11(3), 20 April 1994 being the date when my client first instituted proceedings in relation to the subject matter in the Federal Court.
That has the result that certain causes of action, which would otherwise now be out of time under section 36 of the Limitations of Actions Act of South Australia, will be preserved. The Court might bear in mind that, although it knows virtually nothing of the subject matter of the action ‑ ‑ ‑
GUMMOW J: Do not underestimate us, Mr Whitington.
MR WHITINGTON: Sorry. Perhaps, I take that back. Can I say the Court might be aware then that the subject matter of the action goes back to events in 1989, at their earliest, and a number of the causes of action pleaded have time limits of six years.
KIRBY J: Is this to mould the Constitution to the merits of the case? If we had done that, we would not be here.
MR WHITINGTON: No, your Honour. This is to establish that section 11 has a very narrow and confined field of operation and that it can stand on its own terms, separate and apart from the rest of the Act. Because our first position is that even if the rest of the Act is invalid, section 11, properly understood, is not, and it can be dealt with separately and apart. It does not interlock, as my learned friend Mr Jackson asserted, with the rest of the Act in a way which would prevent severance.
The true purport and effect of section 11, in our respectful submission, is, first, to grant the plaintiff an automatic extension of time to the extent required and, secondly, to permit the proceedings to be constituted in the Supreme Court by the pleadings in the form in which they stood in the Federal Court at the relevant time. In saying that, can I say that we agree with the submission put on behalf of Victoria that sections 11(3) and (4) are subject to subsection (2). Now, we say that it follows from that that the proceedings in that form may have been shaped and moulded by interlocutory orders of the Federal Court, but that is merely part of the history. Section 11 does not need section 6 or, indeed, any other operative part of the Act to have this effect.
We respectfully agree with the observation of Justice Hayne that interlocutory orders may always be reagitated and varied and for that can we give the Court a reference to the case of Hall v Nominal Defendant 117 CLR 423 in this Court and the page references are 429 to 430, 440, 443 and 447. We say then that, correctly understood, section 11 is independent of the rest of the provisions of the Act and can stand on its own. In other words, it could have been enacted in its own terms as an amendment to the Limitations of Action Act of South Australia. The other provisions of the Act have quite separate and distinct functions.
Can I then come to the matter that your Honour Justice Gaudron last raised with my learned friend, Mr Gageler. It is our respectful submission that section 11 refers to pending proceedings of a substantive nature but prior to judgment on the merits. We say that for a reason of the structure of the Act and also for some textual reasons. The reason going to the structure of the Act is this: the scheme of the first part of the Act, sections 6 to 10, is to set up legislative rights and liabilities and then provide for appeals in respect of those.
Sections 6 to 10 do not purport to validate or even address ineffective judgments of the Federal Court. It would be quite contrary to that scheme for section 11 then to provide that the Supreme Court could hear and determine an actual pending appeal from an actual judgment of the Federal Court against the correctness of that judgment.
GAUDRON J: Now, can I raise with you just a practical problem about that construction?
MR WHITINGTON: Yes.
GAUDRON J: What if an appeal was brought well within time in the Federal Court but, for example, because somebody wished to be cautious until they understood this Court’s thinking in the matter, no appeal were brought within the Supreme Court?
MR WHITINGTON: There are a number of practical answers to that, your Honour.
GAUDRON J: Let us say it may be, for example, that the appeal has been brought but the desire on the part of the appellant in the Full Court is to withdraw the appeal rather than have the order struck out as without jurisdiction. That has been brought within time. What should he be doing now? He wants to go to the Supreme Court. It seems to me if he were then to go to the Supreme Court there might be an inconsistency problem or he might be out of time.
MR WHITINGTON: Our answer, respectfully, your Honour, would be this, that if he has an extant appeal in the Federal Court, he might pursue it, the litigant might pursue it.
GAUDRON J: Let us assume he wants to have the matter dealt with on the merits.
MR WHITINGTON: In that case, he ‑ ‑ ‑
GAUDRON J: And he wishes to withdraw his appeal but have it deal with on the merits. Does this Act enable that to happen?
MR WHITINGTON: Yes, depending, of course, on the construction of section 7 but we say “Yes”. Section 7 would permit there to be an appeal against the order legislated by section 6 and to the extent that that permits the merits to be agitated in that kind of appeal, he would have that right, otherwise he would have to rely on his rights in the Federal Courts under the judgment made without jurisdiction. But that is really not a matter for the Act. If the consequence of his pending appeal is that he can only appeal on the issue of jurisdiction, that is a consequence of the Federal Court having acted without jurisdiction.
Now, we say there is nothing in section 11 that seeks to address that situation. It is only addressed to the extent it might be possible under section 7. Could I give your Honour another reason why we say that section 11 ‑ ‑ ‑
GAUDRON J: That is why I have some difficulty in reading section 11 in the manner you suggest, because it could clearly be the case that an appeal right would be lost. Not would be, could be the case as distinct from having the decision quashed and having a rehearing.
MR WHITINGTON: Yes. We would respectfully submit that the consequence might be, by virtue of the invalidity of the Act vesting jurisdiction in the Federal Court.
HAYNE J: Can I take you back, because this may be quite important, and I am perhaps a furlong behind the argument. First, section 11 is engaged if, but only if, there is a relevant order, and there is a relevant order if, but only if, the Federal Court has said “Stop, we have no jurisdiction”. So far so good?
MR WHITINGTON: Yes.
HAYNE J: Therefore, section 11, at least at first sight, seems to me to have nothing whatever to say to a case where trial at first instance in the Federal Court, appeal lodged, but not determined.
MR WHITINGTON: We agree with that, your Honour.
HAYNE J: And section 11 has nothing to say to that case because there is not a relevant order and the fact is hypothesised.
MR WHITINGTON: We agree with that.
HAYNE J: Take it then to the point where trial at first instance, appeal lodged but not determined. Section 6, if valid, is engaged in respect of the order made disposing of the proceeding at first instance.
MR WHITINGTON: Yes.
HAYNE J: If that is so, and if section 7(2) is valid, section 7(2) is then engaged and a right of appeal is given in respect of the rights statutorily created by section 6.
MR WHITINGTON: We agree with all of that with one qualification, your Honour, and I thought this might be what your Honour Justice Gaudron was ‑ ‑ ‑
GAUDRON J: That is my problem. There might be a time limit in the State Act.
HAYNE J: In respect of appeals and therefore the question becomes how does 7(2) operate in relation to the right conferred, say, by the relevant Supreme Court Act to appeal in respect of rights statutory created at the point of commencement of the statute. That is, does time for appeal run from time of commencement of the statute, time of pronouncing of the orders in effect of orders by the Federal Court? Those are perhaps questions that may arise. But on one view, at least, of the statute, it would seem to me that the appeal being against the statutorily created rights, the relevant time is the time of creation of those rights and not some earlier time.
MR WHITINGTON: I say we agree with all that your Honour has put. That is our submission, with this qualification as to your Honour’s last point. It is probably an open question under this Act as to whether time would run from the statutory creation of the right, which in the case of South Australia I think it is 19 August 1999, being the date of commencement of the Act, or whether, as your Honour Justice Hayne hypothesised, the date of pronouncement of the judgment in the Federal Court.
HAYNE J: That is because the statutorily created right is a right, what, that contains within it its own temporal limitation? That is, you purported to obtain a right under the ineffective judgment, a right defeasible on appeal within X days or subject to subsequent leave. The point is becoming quite Gothic at that point, is it not?
MR WHITINGTON: I agree with your Honour. I agree, and I do not think this Court needs ultimately to decide that, to decide that nonetheless such right of appeal arises under section 7 and that there is no right of appeal within section 11. But I agree there is an outstanding issue which is not explicitly addressed by this Act as to the date of the commencement of the appeal right from which time runs under any State limitation statute applying to appeals.
GUMMOW J: It would usually be rules of court, would it not?
MR WHITINGTON: Yes, it would, but I do not think they necessarily would address the question: what is the starting point in this case?
GUMMOW J: I know. All I am saying to you is one will be measuring this Act and what it is designed to achieve against some delegated legislation.
MR WHITINGTON: Quite so, your Honour, and in the case of South Australia that would mean, I think in most cases, 14 days, but 14 days from the date of commencement of the Act or 14 days from the date of pronouncement of the so-called ineffective judgment.
KIRBY J: Common sense must intrude at some stage.
GUMMOW J: Yes.
HAYNE J: I do not know about that.
GAUDRON J: So I take it your argument, in the end, in this regard proceeds on the basis that an appeal having been lodged in the Federal Court, the Federal Court would not dismiss the appeal for want of jurisdiction, could not dismiss the appeal for want of jurisdiction, but must proceed to set aside the order below. I think you must.
MR WHITINGTON: Can I grapple with that, your Honour, because I was going to come to that through the words of section 11. There is one particular key, we say. Could I invite the Court to go to the definition of “limitation law”, limb (b). It says a limitation law is:
any other law that provides for the limitation of liability or the barring of a right of action in respect of a claim by reference to the time when a proceeding on, or the arbitration of, the claim is commenced.
Our first submission about that is that it defines “limitation law” in a way which is apposite to a claim at first instance, but not which includes an appeal proceeding.
Then if the Court would go to subsection (3)(b) where that phrase is picked up, it says - subsection (3)(b) refers to a proceeding which is capable of being the subject of the limitation law as defined. Now, the reference to “proceeding” in section 11 may be capable at first blush of having the meaning that your Honour Justice Gaudron has attributed to it, that is, it may be capable of applying distributively to the original proceeding alone or to the appellate proceeding alone and your Honour has proposed the latter possibility. But if it is capable of referring to an appellate proceeding alone and if the ineffective judgment below is merely voidable, not void, then the definition of “relevant order” does not make sense because if the Court goes to the definition of “relevant order” ‑ ‑ ‑
GAUDRON J: Yes, well that comes to the nub of the problem.
MR WHITINGTON: Yes.
GAUDRON J: Yes.
MR WHITINGTON: Now, can I just say one other thing about that, then? If, on the other hand, the reference to “proceeding” in section 11 meant an entire proceeding including an appeal, then section (3)(b) would not make any sense. Section (3)(b) would then say that that entire proceeding, including the appeal, was to be taken as having commenced at the time when the original proceeding was first commenced. Now, that would not be of any assistance against a limitation law which might bar an appeal as being out of time. Now, for those reasons and on those premises, we say that is another demonstration that section 11 does not intend to deal with pending appeals in the Federal Court.
GUMMOW J: So what happens if there is an appeal in the Federal Court, it goes ahead, the Full Court makes a relevant order?
MR WHITINGTON: Yes.
GUMMOW J: What happens then?
MR WHITINGTON: In our respectful submission, however, one comes back to the definition of “proceeding”. If there was an appeal and assuming that the judgment is merely voidable, not void, it could never make a relevant order because a relevant order of a Federal Court is said to be an order “dismissing, striking out or staying a proceeding relating to a State matter for want of jurisdiction”.
GUMMOW J: That is right, and you say it can never make a relevant order?
MR WHITINGTON: No, that is right. On the assumption that ‑ ‑ ‑
GUMMOW J: Because on this hypothesis it is deciding that the trial court had no jurisdiction.
MR WHITINGTON: And it simply sets aside the order below but it does not dismiss the action.
GUMMOW J: No.
MR WHITINGTON: If, of course, the premise is ‑ ‑ ‑
GAUDRON J: Or it might dismiss the action so that the order that should have been made - in lieu of the order below, order that the action be dismissed for want of jurisdiction, so that it then gets transferred across, not as the appeal proceeding but as the trial proceeding.
MR WHITINGTON: Yes, but it does not dismiss the appeal proceedings and we have got to the position now where, for these purposes, the relevant proceeding is the appeal proceeding. If we test it this way, if the relevant proceeding for these purposes is the appeal proceeding, then the order on appeal would never be to dismiss the proceeding; it would be to set aside the order below and so you would never get an order within the terms of the definition of a relevant order on those premises. Now, for those reasons, although it is quite convoluted, we say it can be demonstrated through the text of section 11 that it is really affirming the structure of the Act, which is that section 11 is intended to stand on its own to permit pending first instance proceedings to be recommenced in the Supreme Court, without issues as to time.
McHUGH J: Well now, what happens if there has been a dismissal at first instance because there is no jurisdiction, an appeal is lodged, which is ultimately successful in the Full Court of the Federal Court, holding that the Federal Court has both jurisdictions, but, in the mean time, an order has been made under section 11(2)?
MR WHITINGTON: Your Honour, I am not sure I understand that proposition, I apologise.
McHUGH J: Let it be assumed that the Federal Court at first instance holds no jurisdiction in respect of the matter.
MR WHITINGTON: Yes.
McHUGH J: You lodge an appeal against that to the Full Court of the Federal Court and, at the same time, you make an application under section 11(2). Both applications are successful, the Supreme Court determination being the first. What is the effect then of the section 11(2) proceedings, because the Federal Court has now held it has jurisdiction.
MR WHITINGTON: But our premise is that section 11 does not apply to a concluded proceeding and so it could never be started in the Supreme Court under section 11.
McHUGH J: But all that is necessary is that a relevant order has been made and that is a relevant order by the Federal Court that it has no jurisdiction. Let it be assumed it comes before, let us say, Justice Wilcox; he holds in this particular case that “I have got no jurisdiction”. You go the next day and you come before one of the judges of the Supreme Court of South Australia and they make an order but in the meantime you have also appealed against Justice Wilcox’s order and it is ultimately successful. Where are we then?
MR WHITINGTON: Well, then it would cease to be a relevant order?
McHUGH J: Why?
MR WHITINGTON: Because that had been set aside on appeal.
McHUGH J: But on your hypothesis the proceedings have been legitimately commenced in the Supreme Court. We now know that a condition of the Supreme Court’s jurisdiction did not exist but the proceedings must be in the Supreme Court on the hypothesis upon which we are proceeding, are they not? The Supreme Court order is not void.
MR WHITINGTON: But the hypothesis has now been rendered false.
McHUGH J: Well, it may be but are not the proceedings on foot until they are set aside in the Supreme Court?
MR WHITINGTON: Well, then a party to those proceedings would be entitled to apply to stay them on the ground that they could not have been brought pursuant to section 11.
KIRBY J: Is that done within the framework of the Act or under the general powers of the Supreme Court?
MR WHITINGTON: Under the general power but, moreover, it would be our respectful submission that at least in the circumstance where the Supreme Court knew that a relevant order was under appeal which might lead to the result that the relevant order be set aside so there was no relevant order, it would refrain from acting under section 11 in any event.
McHUGH J: Well, maybe it would; maybe it would not; but we have got to test this. But at the moment you had the two orders on foot, is there any inconsistency for the purpose of the Constitution?
MR WHITINGTON: We would say no, because you simply have two sets of proceedings, two concurrent sets of proceedings in relation to the same subject matter and, in that circumstance, the courts generally stay one set of proceedings.
McHUGH J: Then, let me take you to perhaps a more fundamental question. In your written submissions you assert in paragraph 15.2 that the proceedings are left as they were in the Federal Court.
MR WHITINGTON: Yes.
McHUGH J: But, in subsection (2):
A person who was a party to a proceeding –
that must be a proceeding in the Federal Court -
may apply to the Supreme Court for an order that the proceeding –
that, again, must be the proceeding in the Federal Court -
be treated as a proceeding in the Supreme Court –
Then, in subsection (3):
If the Supreme Court makes an order under subsection (2), the proceeding –
that must be the proceeding in the Federal Court -
despite the relevant order –
(a) becomes…..a proceeding in the Supreme Court –
Why is not the object of this legislation to take across the proceeding in the Federal Court? Is not that the natural meaning of the language?
MR WHITINGTON: We say not, if your Honour pleases, because we say the dominant and governing expression is “be treated” as a proceeding.
McHUGH J: Well, you have got in subsection (4):
treated as, becoming and being recorded as, a proceeding –
What does the statute mean when it says the proceeding in the Federal Court becomes and must be recorded in the Supreme Court:
as, a proceeding in the Supreme Court.
MR WHITINGTON: It does not seek to expropriate any proceeding from the Federal Court . It acts on the premise that the proceeding in the Federal Court is, in effect, extinct, but it does not seek to take that proceeding from the Federal Court. It leaves it extinct in the Federal Court and then ‑ ‑ ‑
McHUGH J: You assert that, but why? The natural meaning of the language seems to be the fact that it is what the statute is seeking to do. What is the surgery one can ride upon under section 11 to give it what I would accept as the much more sensible meaning which you seek to give it, but which hardly fits in with the language of the section.
KIRBY J: The surgery suggested was to take out the word “becomes” because then you have got “treated” and “being recorded as” – “treated” is a fiction and “recorded as” is simply the internal processes of the Supreme Court.
MR WHITINGTON: Yes.
GLEESON CJ: Subsections (3) and (4) are merely explications of subsection (2), are they not?
MR WHITINGTON: Exactly, your Honour. That is our position.
GLEESON CJ: It is an order that it be treated as a proceeding that sets all this in operation.
MR WHITINGTON: That is why we say it is the dominant expression. It governs the other expressions which are subsidiary to it. Can I answer your Honour Justice McHugh’s point in this way – I think this might be addressing your Honour’s point – proceeding is a slightly ambiguous concept. It might mean an abstract thing or it might mean the papers or file which document the proceeding.
McHUGH J: When you say it is an abstract thing, you really mean it is a process for determining a dispute, do you not?
MR WHITINGTON: Yes, but it does not have any, if you like, tangible existence. It is a process in a court, designed to try a controversy.
HAYNE J: What are we to make then of this inclusive but thoroughly unenlightening definition of “proceeding” in the statute? First, if you use the expression “initiating application” in lieu of the word “proceeding” where it appears, how then does the section work?
MR WHITINGTON: I do not think that makes any difference because, as your Honour says, it is thoroughly ‑ ‑ ‑
HAYNE J: Well, say this, subsection (3) would then read “The initiating application despite the relevant order becomes” – I omit some words – “an initiating application in the Supreme Court”.
MR WHITINGTON: Yes. The question, perhaps, is though, which is the initiating application? Is it the initiating application in the Federal Court or is it the initiating application by which a person such as my client has commenced their proceeding in the Supreme Court under section 11.
KIRBY J: You would think it was the initiating proceeding in the Federal Court because it talks of “includes an” initiating application.
MR WHITINGTON: Yes, well, that is perhaps a more sensible definition and that is simply saying that therefore a proceedings constituted by all those things that define the claim being pursued, which include the initiating application. But we say that still does not take the argument any further because how can this section take over any abstract thing called a proceeding? The abstract thing in the Federal Court rests where it lies, in the condition which it has in the Federal Court. If it is being stayed for want of jurisdiction, or struck out for want of jurisdiction, then it still has some extinct form in the Federal Court. It does not make sense to ‑ ‑ ‑
McHUGH J: I understand, but why did the State legislature put in the words “despite the relevant order”? It is irrelevant, is it not?
MR WHITINGTON: For this reason, your Honour. That if it had not done that and this section was contemplating the replication in the Supreme Court of the identical proceeding in the Federal Court, it would beg this question: if the replicated proceeding is now dead, then the proceeding in the Supreme Court will also be dead.
McHUGH J: Why?
MR WHITINGTON: Because that, surely, if you replicate the proceedings ‑ ‑ ‑
McHUGH J: But your theory is that this is a completely new set of proceedings and that the Federal Court proceedings are a point of historical reference, nothing more.
MR WHITINGTON: Yes. But if you replicated them in the identical form, an argument might be made that you replicated them in their extinct form, that is, having been dismissed. So the argument might be made that all you have done is created a kind of circularity by starting an action in the Supreme Court, which was dead before you started it. So the draftsman, to cover that possibility, has said that the proceeding, despite the relevant order, can be commenced in the Supreme Court in the form in which it was constituted in the Federal Court.
McHUGH J: But that seems to mean that you are taking over more than just the initiating application, you are taking over the order dismissing the proceedings as well.
MR WHITINGTON: No. With respect, your Honour, I think the reference to “initiating application” is said to be an inclusive reference, not an exhaustive reference. We say that nothing is taken over. We say what section 11 does is to permit the reconstitution, or commencement afresh, of proceedings in the Supreme Court. That begs the question, “How were the proceedings defined or constituted in the Federal Court?” We would say they were defined by the initiating application and the pleadings, but there might be an argument they were also defined by an order and making those proceedings extinct. To cover that possibility a draftsman has added that qualification.
Now, the section, we say, clearly does not contemplate whatever the draftsman of the rules might have thought, the physical expropriation of the file. The file will stay in the Federal Court where it should be and if ‑ ‑ ‑
McHUGH J: But it is an interesting approach to the section. The draftsman of the Supreme Court Rules with no interest in the validity of the section, appears to have regarded it as intending to have the effect that I was putting to you as the natural meaning might suggest.
MR WHITINGTON: I prefer to put it another way, that the draftsman on account of rhetorical flourish to make sure he had covered every possibility, having started by saying that the proceeding was to be treated as a proceeding in the Supreme Court - - -
KIRBY J: It is not only the draftsman of the Supreme Court Rules, it is whoever drafted the heading to the section.
MR WHITINGTON: Yes, I was actually now addressing the section. But in terms of the section, the draftsman of that section appears to have stated his premise first that there are to be set proceedings, that is Supreme Court proceedings treated as if they were proceedings in the Federal Court, but then in a flourish to make sure that he has left nothing unsaid has used the word “becomes” which, we say, is surplusage in the context of section 11.
KIRBY J: Even treated as - even the fiction has the germ of the idea that one thing is becoming the other, would certainly “becomes” underlines that concept.
MR WHITINGTON: Yes. We say, the draftsman must have had in mind with the expression “become” the notion of replication. He used the word “become” to underscore the fact that what has been replicated is an identical set of proceedings and we really say that is the only way you can make sense of the section. Now, the drafting may not be perfect but we say that this is remedial legislation, that the clear intent is to give this section some useful operation. The most obvious object is to enable fresh proceedings to be commenced in the face of time bars and that interpreted in that light there would be no suggestion that the proceeding was a proceeding extracted from the Federal Court.
KIRBY J: Could you help me on this? The word “may” in subsection (2), is that a general discretion or is it a Julius v Bishop of Oxford-type obligation, if the premises are made out? And remind me, is there an appeal against that order? I am referring to section 11(2). In the last line it says, “the Supreme Court may make such an order.”
MR WHITINGTON: I think the answer to that is that probably there would be an appeal and ‑ ‑ ‑
KIRBY J: Is it a discretion? I mean, the judge can say, “Well, I just do not think this is just in the particular circumstances.”?
MR WHITINGTON: Yes, provided he exercised the discretion judicially obviously, yes, we say it must be discretion and the situation mentioned by his Honour Justice McHugh gives one instance where the discretion might be exercised against institution, that is, where there is a pending appeal in the Federal Court, which might have the effect of setting aside a relevant order. The court at that point might either refuse the order on the basis that the application be made again or simply adjourn the proceedings.
CALLINAN J: Or a long and inexplicable delay causing prejudice?
MR WHITINGTON: Yes, your Honour.
KIRBY J: And appeal would follow the normal cause of an interlocutory appeal in the Supreme Court of South Australia, would it?
MR WHITINGTON: Yes, your Honour, under section 50.
KIRBY J: That is of which Act?
MR WHITINGTON: Section 50 of the Supreme Court Act of South Australia.
McHUGH J: Well the strongest argument I think going for you really is that if the section was intended to take over the Federal Court proceedings, why are they bothering about the limitation period at all?
MR WHITINGTON: Yes, precisely, your Honour, because if it were the very same proceeding, no issue of time bars arises.
McHUGH J: No.
MR WHITINGTON: Now, can I say finally, as we understood our learned friend, Mr Jackson, for the defendants, he conceded that the Supreme Court has jurisdiction to deal with the same subject matter and therefore he conceded it would be open to a party to institute de novo in the Supreme Court and for the Parliament of South Australia to legislate to confirm that. Now it is a very short step from that to section 11. That is all I wanted to say on section 11, if the Court pleases.
Can I very briefly address two other areas: the first relates to the operations of section 6 and 8 ‑ ‑ ‑
KIRBY J: Any recommencement de novo would involve running into the State limitation law, so what you are putting to us is that, in essence, section 11 is an excisable provision from this Act and is, in a sense, an amendment to the State limitation laws.
MR WHITINGTON: Precisely, your Honour, yes, it is excisable, it can stand on its own. So, even if the rest of the Act is invalid, section 11 stands to the benefit of my client. Our other submission is that, in any event, the other provisions are valid and even if they are not all valid, only possibly section 7(2), the appeal provision, might be invalid, and that could be severed from the Act in a way that did not render section 11 invalid.
KIRBY J: I have a difficulty with that, given that the appeal provision seems to be part of a package that is designed to secure the best possible justice that the circumstances allow.
MR WHITINGTON: Yes, but one then must ask the question what is the alternative and the alternative might be a complete re‑litigation and Parliament has made a judgment about that.
Can I just address briefly sections 6 and 8? First we adopt the submissions of the interveners in relation to Humby but we wanted to make one other point about sections 6 and 8, and by that I mean section 8(1), which is the section that creates secondary rights and liabilities. In our respectful submission it is significant that these sections do not require any judicial determination as to the existence of an ineffective judgment. We would put the point this way. If an issue arose in judicial proceedings the Court would not need to decide which of the two parallel and identical sets of rights and liabilities a party relied on. The result would be the same whether they arose under an effective judgment of the Federal Court or under sections 6 and 8 because a relevant judgment of the Federal Court was an ineffective judgment.
Thirdly, if it is put against section 6 that it is a Kable‑type imposition on the Supreme Court, and particularly on the integrity, impartiality and independence of the Supreme Court, we would put two submissions in response. First, section 6 does not stamp the rights and liabilities created under the section with the actual authority of the Supreme Court. It merely describes the nature and content of those rights and liabilities by reference to a hypothetical circumstance.
Secondly, even if that is wrong, we say there is no Kable‑type imposition here because section 6 relates to a decision of a superior court of this country which, at the relevant time, was purporting to exercise jurisdiction which should have been exercised by the Supreme Court of South Australia.
KIRBY J: Decision in inverted commas.
MR WHITINGTON: Yes, but the result of that, we say, is that there is no interference with integrity, independence or impartiality of the Supreme Court of any of the States by virtue of sections 6 or 8 in these Acts. Finally, can we address one aspect of the matter relating to ‑ ‑ ‑
KIRBY J: Can I just go back to a question Justice Gummow asked?
MR WHITINGTON: Yes.
KIRBY J: What order in the appeal does the Supreme Court of South Australia set aside, unless the Federal Court has taken the step of setting aside its own order pursuant to its suggested power to do so in completion of its function?
MR WHITINGTON: I am sorry? I think I misunderstood that.
KIRBY J: It is in the area of appeals.
MR WHITINGTON: Yes.
KIRBY J: What order does the Supreme Court of South Australia Full Court set aside? Appeals are directed at orders.
MR WHITINGTON: Yes. We say it sets aside the section 6 order, the section 6 order or the section 6 rights and liabilities. It does not set aside ‑ ‑ ‑
KIRBY J: But they are not orders. They are rights and liabilities.
MR WHITINGTON: Yes, and ‑ ‑ ‑
KIRBY J: Courts address orders.
MR WHITINGTON: Well, that goes to the efficacy of section 7(2) itself and we say there is nothing untoward in Parliament providing for a set of rights and liabilities which are legislative rights and then providing that they can be the subject of an appeal, but in any even the rights and liabilities affected on appeal are those created by section 6 and not those created under an order of the Federal Court.
GUMMOW J: Well, that means the Full Court is exercising original jurisdiction.
MR WHITINGTON: Yes. Yes, it does.
GAUDRON J: I do not think that anything turns on it, but I would not think that that argument necessarily disposed of the inconsistency argument.
MR WHITINGTON: No, no. Can I address that now, your Honour?
GAUDRON J: Yes.
MR WHITINGTON: Because I know your Honour has got a particular concern about this and can we put it this way, that if the order of the Federal Court is a nullity then no question of inconsistency will arise, in our respectful submission. However, if the ineffective judgment is merely voidable and if the Supreme Court is to vary section 6 rights on appeal, then a critical step must be attended to and that is that the Supreme Court must first determine there is an ineffective judgment which conditions the right of appeal because the right of appeal in section 7(2) depends upon there being section 6 rights and that in turn depends upon there being an ineffective judgment. Also section 7(2) is expressed to be a right of appeal in relation to parallel rights that reflect an ineffective judgment.
So there must first be a finding that there was an ineffective judgment, which means that the Supreme Court must first satisfy itself that the Federal Court order was made substantively in respect of a State matter and, therefore, without substantive jurisdiction. It is our submission that the Supreme Court has no jurisdiction to set aside or quash an order of the Federal Court for want of jurisdiction, to declare it invalid or otherwise to impeach it collaterally, and we say that even notwithstanding section 39 of the Judiciary Act, which I might mention in a moment. We say, therefore, the only means by which the Supreme Court can be satisfied that an order of the Federal Court was an ineffective judgment is if that were so declared by the Federal Court itself or by this Court.
Now, that means that the impugned judgment of the Federal Court would have to be either set aside on appeal in the Federal Court or quashed in this Court for want of jurisdiction, or possibly even set aside at first instance by the Federal Court. So that is how the Supreme Court would satisfy itself that there was an ineffective judgment and that is how the right of appeal would be activated. Until that happened the right of appeal could not be activated.
But there is another aspect to it and that is this: assuming, of course, that the ineffective judgment is merely voidable, the Federal Court, being a superior court, has made a decision about its own jurisdiction, and it does so every time it exercises jurisdiction, implicitly. That decision would create an issue estoppel and would bind the intending appellants in the Supreme Court. So the intending appellant would be bound by a decision that there was jurisdiction, there was an effective judgment, until that position was changed either by the Federal Court or this Court. In those circumstances it is, in fact, a precondition to an order varying section 6 rights that the field be first cleared of rights and liabilities arising under an impugned Federal Court order.
There is another approach, and that is this: that as a matter of comity, we submit, the Supreme Court would adjourn the appeal or application pending an application being made by one of the parties to the Federal Court or to this Court, for an order which would have the result that the judgment in the Federal Court was declared an ineffective judgment. On that basis, in our respectful submission, there could never be inconsistency between the Federal Court Act, assuming that that Act is the source of the surviving effect of the Federal Court order, and the State Jurisdiction Act.
GLEESON CJ: How long do you expect to require to complete your submissions?
MR WHITINGTON: About 60 seconds, your Honour.
GLEESON CJ: Right.
MR WHITINGTON: If, despite all of that, the Federal Court were to act to vary section 6 rights without the Federal Court, or this Court, having set aside or quashed the judgment below, and if inconsistent sets of rights and liabilities were created, then we would say that section 109 would only render section 7(2) inoperative to the extent to which it gave force and effect to the rights under the Supreme Court order.
Finally, can we mention section 39(3) of the Judiciary Act? It is our submission that, on a proper construction of that Act, that section, it would not permit a State Supreme Court to determine the existence, or otherwise, of the Federal Court’s jurisdiction. If we are wrong about that; if as a matter of construction section 39(2) of the Judiciary Act does permit the Supreme Court to determine the existence, or otherwise, of the Federal Court’s substantive jurisdiction, and it does act, notwithstanding comity considerations and finds that the Federal Court’s judgment was an ineffective judgment, that decision would be binding on the parties, in our submission by dint of Commonwealth law and the Supreme Court would then be able to create different rights and liabilities on appeal without any inconsistency because it would have done so through the medium of section 39(2), that is through the medium of Commonwealth Law, and that would avoid the possibility of inconsistency.
CALLINAN J: Mr Whiting, can I just ask you a question? What would happen in the situation, leaving this Act aside, in which a State court decided that a matter was not within the accrued jurisdiction and then would be prepared to entertain it as a State matter, whilst at the same time in the Federal Court held that it was within the accrued jurisdiction and also sought to entertain it, and perhaps parties appealed against each of those decisions?
MR WHITINGTON: We say as a matter of comity, one court or another would give way, but if that ‑ ‑ ‑
CALLINAN J: Theoretically, it could happen. I mean, you take in Wakim, there were three separate causes of action which were all held to be within the accrued jurisdiction and not all the parties were the same, so it could easily happen, even though the courts may pay due respect to each other.
MR WHITINGTON: Yes. Our first position would be that the State court has no jurisdiction to determine the jurisdiction of the Federal Court, notwithstanding ‑ ‑ ‑
CALLINAN J: It would not be doing that, it would be merely deciding a case which, by implication, it was satisfied it had jurisdiction to decide.
MR WHITINGTON: In that case, your Honour, it would be a case of the irresistible force meeting the immoveable object and the matter could only be resolved by some higher authority and some process would have to be found to, in effect, remove that jurisdictional dispute to this Court.
CALLINAN J: Each court would be acting within jurisdiction.
MR WHITINGTON: Maybe yes, or maybe no, your Honour. That would depend upon ‑ ‑ ‑
CALLINAN J: It might depend upon the outcome of the - - -
MR WHITINGTON: The ultimate outcome, yes.
CALLINAN J: But until perhaps this Court held that one did have and the other did not have perhaps jurisdiction - - -
KIRBY J: The higher authority would be the Constitution and presumably one party would seek to bring the issue up here rather quickly under 75(v).
MR WHITINGTON: Yes, your Honour.
CALLINAN J: If they could afford it and they had the time.
MR WHITINGTON: Yes.
GLEESON CJ: Or they could cross-vest the matter to the State court.
MR WHITINGTON: Yes. They are my submissions, if the Court pleases.
GLEESON CJ: Thank you, Mr Whitington. Yes, Mr Jackson.
MR JACKSON: I understand the Solicitor-General for Victoria wishes to say something before I start.
MR GRAHAM: If the Court pleases, very briefly, we have not had an opportunity of looking at the 3rd Edition of Tribe on American Constitutional Law as the volume was not available upstairs. I wonder if we could have seven days to put in a written submission in relation to that topic?
GLEESON CJ: No, you can have until 4 o’clock on Monday afternoon.
MR GRAHAM: We may not have found a copy of the book then.
GLEESON CJ: Well, things may be moving fairly quickly.
MR GRAHAM: We will do our best, your Honour, but I have not managed to find a copy in Victoria, yet.
GLEESON CJ: Thank you. Yes, Mr Jackson.
MR JACKSON: Your Honours, may I deal first with the question of construction of section 11(2)? Our learned friends have responded, if I may say so, with respect, enthusiastically, to an observation that perhaps the expression “to be treated” when used in section 11(2) casts some light upon what follows in subsections (3) and (4). We would submit the difficulty with that approach is really to be found in the structure of section 11 and by that I mean that if one goes to section 11(2) what it describes is the form of order which is made by the Supreme Court, but when one is looking to see what is the effect of the order that is provided for by the succeeding provisions of the Act.
Your Honours, if one goes then to section 11(3), dealing with the effect of the order, our submission is that the legislature’s choice of language is not apt to receive the construction to which our learned friends have referred and also, your Honours, that is made very clear, we would submit, by the terms of subsection (4). Your Honours, in that regard, may we just say first of all that the opening words of section 11(3) commence with words describing the effect of the order. It says:
If the Supreme Court makes an order –
and then it says, if that happens:
the proceeding.....(a) becomes –
If does not say, is to be treated as –
a proceeding in the Supreme Court.
Your Honours, the language of section 11(4) is against the construction contended for by our learned friends, because it does, itself, distinguish between “being treated as” and “becoming”.
KIRBY J: What is your answer to Justice McHugh’s point that if it were truly transmogrification, you would not need the limitation or provision, because you are, by taking with you, exactly your rights, including under limitation law?
MR JACKSON: No, your Honour. The need for a provision, like section 11(3)(b) arises from the fact that the Limitation Act of a State would, at least in its primary application as a State law - and these days, your Honours, as in the case of section 38A of the South Australian Limitation Act, operates as a substantive law of the State. Now, in relation to that, the position which obtains is that its primary application would be to look at the time when proceedings commenced in the Supreme Court. So absent a provision dealing with an ability to deem some earlier time, was the commencement of the proceeding in the Supreme Court, then the Limitation Act provisions would prima facie apply.
Your Honours, the point I seek to make about it is that there is not any reason at all why the legislature of the State could not have enacted suitable legislation allowing for extension of limitation periods and allowing for expedited procedures as necessary. But what the legislature has not done is to do that, but to do something that goes quite beyond that, to do the very thing that would, if I could adopt the language of the Solicitor‑General for Victoria yesterday at page 78 of the transcript, obviously enough provoke a challenge.
McHUGH J: But I would be surprised if the Limitation Act is directed to commencement of proceedings in the Supreme Court.
MR JACKSON: In courts. I am sorry, your Honour, I did not mean ‑ ‑ ‑
McHUGH J: In courts, but why would not it apply to the proceeding having been commenced in the Federal Court if, as you claim, it has taken over the federal proceedings. The action has been commenced.
MR JACKSON: Your Honour, all that section 11(3)(b) is doing, in our submission, is to say if you look at the limitation law, the limitation law is a law of South Australia. It is a law which primarily, at least, applies to institution of proceedings in the courts of South Australia. Your Honours, that is, at least, the primary application of it and in relation to that all that section 11(3)(b) is doing is to declare that these proceedings which, ex hypothesi, had not been so started ‑ ‑ ‑
McHUGH J: Yes, but, I mean we were familiar at one stage in New South Wales in proceedings being transferred from the District Court to the Supreme Court and vice versa, but the limitation period ran from the day when it was first commenced in the District Court or the Supreme Court as the case may be.
MR JACKSON: Your Honour, that, with respect, really supports, in our submission, what I was saying because one is talking about the courts of the one jurisdiction and if you have a provision allowing transfer of proceedings within the courts of one jurisdiction, then, prima facie, the Limitation Act provisions would operate on the first commencement of them if you ‑ ‑ ‑
KIRBY J: But presumably the Limitation Act of South Australia applies in respect of Federal Courts in South Australia by virtue of the Judiciary Act, so therefore it is picked up and brought into the federal cause of action and, on your theory, that is what is going back to the State courts, including its limitation provision.
MR JACKSON: Your Honour, I just cannot quite recall what the effect of John Robertson v Transformers is in that regard but, assuming that to be so, your Honour, all that section 11(3)(b) is doing is to declare what the position is. Your Honour, it does not do any more than that.
So, your Honours, what we would submit is that – and if I may say so, with respect – looking at section 11(3)(b) and regarding it as the provision which dominates the section, is really not to give effect to the wording used in the more substantive parts of it. And when one looks at those provisions one sees, in our submission, that section 11 is a provision which should be treated as, with respect, invalid and invalid relevantly in toto.
Your Honours, could I come then to the second matter with which I wish to deal, that is an observation concerning The Queen v Humby; Ex parte Rooney. Your Honours, in dealing with that case one must bear in mind that the Court was there dealing with legislation enacted in circumstances where one would think the orders must have been void because they had not been made by a court.
The whole point of Kotsis v Kotsis and Knight v Knight, the earlier cases, was that the Registrar and Master, respectively, were not part of the Court in which federal jurisdiction had been invested and they were relevantly persons having no judicial power. Could I take your Honours in that regard, very briefly, to one passage in Kotsis v Kotsis 122 CLR in the decision of reasons for judgment of Justice Windeyer at page 90. Your Honours will see in his Honour’s reasons at page 90 that he said, at the commencement of the reasons:
The order that the deputy registrar of the Supreme Court of New South Wales made is expressed to have been made “By the Court”. In fact it was not made by the Court. It was made by the deputy registrar acting for and on behalf of the Court and by virtue, it was assumed, of a power arising by delegation from the Court. Someone, by what authority does not appear, impressed a representation of the seal of the Court upon the formal record of the order. This did not make it in fact an order of the Court or give it any additional validity.
Your Honours will see the next sentence. Your Honours, could I invite your Honours to note also, whilst your Honours have that volume, at page 91, an observation in relation to another aspect of this case and that is that after referring to the Charter of Justice in relation to New South Wales his Honour went on to say, in the second new paragraph on page 91, that:
The nature of a court and the functions of court officers were matters that were well known in England long before the Australian colonies began. The meaning of the word “court” has thus come to us through a long history; and it is by the light of that that it is to be understood in ss 71, 72 and 73 of the Constitution.
Your Honours, a matter germane to the question whether in establishing a court Parliament’s powers are so limited that Parliament cannot declare that a particular court is to have – or its orders are to have a particular prima facie effect.
GUMMOW J: Well, that is the reason for section 79 of the Constitution, that observation by Sir Victor Windeyer “According to the tradition of the common law” in the middle of 91.
MR JACKSON: Yes, your Honour, yes.
GLEESON CJ: That was the cause of an enormous controversy in New South Wales at the time of the establishment of the Supreme Court. Sir Francis Ford had drafted the instrument and then nobody could agree on whether all the judges of the court had to sit to constitute it.
MR JACKSON: Yes. Your Honours, could I go on then to – remaining with Reg v Humby for the moment? What Parliament was doing in the law which it enacted in the Matrimonial Causes Act 1971 was to say, in the exercise of a legislative power under section 51 that enabled it to make decrees as to what the position was between the parties, was that the legal position was to be as if there had been orders of the Supreme Court but the issue, your Honours, which was not tested in that case, for example, was whether an appeal could have been brought from such a legislative decree.
Your Honours, here, the State Jurisdiction Act goes rather further than that. Can I take your Honours, for a moment, to section 7 of the Act? What it says, amongst other things, is, in section 7(3), that “each ineffective judgment of…..the Federal Court” is taken for the purposes of appeal to be a judgment of the Supreme Court of the State. Your Honours, in that regard, without going to the provisions in detail, the terms of sections 8, 10 and 12 of the Act treat what is done as if it were, I will put it that way, an order of the court.
Now, your Honours, in the course of the argument, attention has been directed particularly, I think, by your Honour Justice Hayne, to the undoubted fact that what is contemplated by section 7 is an appeal from the result of the deemed decision of the Supreme Court. But, your Honours, the nature of appeal is that it does involve a consideration of the correctness of the course taken below, whether it be as to matters of law, fact, exercise of discretion, was there, one way or another, error below. Your Honours, that means, inevitably, that, as a matter of substance, the Supreme Court is considering the manner in which the Federal Court judge dealt with the matter.
Your Honours, the court, I said in our submissions earlier, really does look at constitutional issues, in our submission, as matters of substance. I will not take your Honours to the passage but may I give your Honours a relatively recent reference, Ha v New South Wales 189 CLR 465 at pages 497 and 498 in the judgment of four Justices in that case, where the proposition is put quite strongly.
KIRBY J: You took us to section 7(3). That is triggered by “ineffective judgment”. That phrase is not used in section 11.
MR JACKSON: No, it is not, your Honour. In fact, I was going to come to that a little later in relation to a submission that was made by one of my learned friends, and one sees ‑ ‑ ‑
KIRBY J: You deal with it in your time.
MR JACKSON: Yes, I will come back to that. Your Honours, the situation which results, in our submission, is that, first, despite the fact that the conduct of Federal Court judges, if I can put it that way, is to be dealt with by way, if one is speaking of, a first appeal to an intermediate appellate court, only by the Full Court of the Federal Court, or whichever Federal Court it may be and, also, despite the fact that in the case of interlocutory matters, section 24(1)(a) of the Federal Court of Australia Act provides specifically that only the federal judge or the Full Court of the Federal Court may determine whether there is to be an appeal at all, the State legislature yet gives an appeal to the Supreme Court.
Your Honours, there is also a wider aspect. Part of the package – if I could pick up that expression – in the legislation is that the appeal structure, in our submission, is to be as if there were a judgment of the Supreme Court. That seems, in our submission, clear enough from section 7(2) and one sees it also in sections 8 and 9. I do not think your Honours have been taken to section 9, but it substitutes the judgment of the Full Court for the judgment of the primary judge in the case where there has been an appeal. That, in our submission, skews the appeal rights which otherwise might have been provided for. I refer, in that regard, to paragraph 37 of our written submissions.
Your Honours, could I go then to one other matter, and that is something that your Honours will see in paragraph 35 of our written submissions in relation to inconsistency. We set out there the well‑known passage from Ex parte McLean. Your Honours will see in that passage the reference to the rule of conduct being identical, and if there are identical rules of conduct then there can yet be inconsistency.
GAUDRON J: But they are assuming – I mean, that was a statement of principle, of course, in relation to valid Commonwealth law. You assume validity but infirmity here. There must be a different consideration then, I think. What I am really saying is the statement of principle does not necessarily carry across from a valid law to a valid but infirm judgment.
MR JACKSON: Well, your Honour, could I just say that it is a question, I suppose, your Honour, of definition of what is meant by “valid but infirm.” In the case of the orders made by the Federal Court, if we are right about the void/voidable issue, then whilst there might be infirmity, until the patient is put down, the orders remain operative and so, your Honour, one does have a situation where there are orders in being, they are orders which are effective and, at the same time, a State regime is created.
Your Honours, may I turn very briefly to another matter, and that is the argument advanced by our learned friends for the plaintiff, and that is that there cannot be any appeal, for example, until the orders made by the Federal Court have been set aside; the field has got to be cleared first before anything can happen. Well, we would say two things about that, your Honours. The first is that your Honours will spend a long time endeavouring to find that in the Act, it just does not say that; the second thing is that one sees – and your Honours this is a matter to which your Honour Justice Kirby adverted a moment ago – the difference in the definitions, which is manifest: one, ineffective judgment in relation to the earlier parts of the enactment and then the special definition which relates only to section 11, and one sees where that issue is being dealt with it is provided for by section 11; provided for specially and defined in that way.
KIRBY J: But is that not against you and does that not suggest severability, in the sense that you are not locked into the trigger of ineffective judgments, you have just got a special provision relating to this particular stage of litigation?
MR JACKSON: Your Honour, I would accept that what your Honour put to me was, is not that against you and does it not suggest severability? Your Honour, I accept it is a factor in relation to severability. If what your Honour is putting to me is going further than that I would submit it does not. It just does not otherwise affect the argument.
Your Honours, could I come to another matter - your Honour, perhaps I should say I expect to be about six or seven minutes, perhaps a little longer but not much – and that is to the argument that the effect of finding that a statute is unconstitutional is that it is void ab initio and, your Honours, that proposition is sometimes true, often true indeed but there are two very important qualifications to it.
The first is that it is simply not universally true in relation to the invalidity of legislation. Commonwealth legislation may have a valid operation at some times but not at others and this is discussed in relation, for example, to the defence power by Justice Dixon in Australian Textiles Pty Limited v The Commonwealth (1945) 71 CLR 161. Your Honours, may I give your Honours the reference to where this is to be found rather than attempt to read the passage – pages 180 to 181 – and the law can be valid and not be invalid ab initio but later the circumstances which give it validity have ceased to exist but they may come back.
Your Honours, another area where a similar approach has been taken is in relation to electoral legislation and could I refer your Honours in that regard to the observations of Justices McTiernan and Jacobs in Attorney‑General Ex rel McKinlay v The Commonwealth (1975) 135 CLR 38. Now, your Honours, a third area is where a law, usually a State law, is said to infringe a provision such as section 92.
Now, decisions in relation to the application of provisions of that kind turn on the underlying factual situation to which the legislation is direction. The Court is concerned, too, of course, with substantial operation, not merely form. The valid, in some cases, maybe come invalid and perhaps the invalid sometimes have an invalid operation. Another area where the broad proposition is not correct is in relation to State legislation “invalidated”, if I could put the expression in inverted commas, pursuant to section 109 because the invalidation means that the legislation is not void, ab initio, it is inoperative during the period of the inconsistency.
The principles are referred to by six Justices in Western Australia v The Commonwealth (1995) 183 CLR 383 at 465. May I say one thing about that, your Honours. I wish to make it clear I am not saying that during the period of inconsistency State legislation has some kind of half life. What I am seeking to say is that the proposition – the very broad proposition that the statute is void, ab initio, is, with respect, a simplification. Those things represent the first qualification or group of qualifications to the void ab initio proposition.
The second is one that was adverted to by your Honour Justice Gummow in the course of argument this morning and it is that the decisions of the Court that legislation is invalid are decisions binding the parties to them. They remain decisions made in litigation. The binding effect on others is as a matter of precedent.
Your Honours, that is part of the reasoning, in effect, underpinning the incapacity to confer, say, advisory jurisdiction with the results of the decision being binding on the population at large, as one can see, for example, in Re Judiciary and Navigation Acts and, your Honours, it seems, if one looks at the two classes of jurisdiction that the court has, it seems obvious enough, with respect, that it is likely to be the case in relation to appellate jurisdiction. The terms of section 73 are apposite to dealing with appeals, that is appeals from the four types of orders that are referred to in section 73 and they are of their nature litigation between parties or else of a recognised kind of litigation.
Your Honours, in relation to original jurisdiction, one can see in the cases where the issue of the binding nature of an earlier decision has been in question one can see that the litigation is, in the end, litigation between parties. Could I give your Honours some references in that regard, again, without taking your Honours to the detail of them. First of all, Queensland v The Commonwealth (1977) 139 CLR 585. The principal passage, your Honours, is that of Justice Aickin at page 615, Chief Justice Barwick agreeing, and then at page 597 Justice Gibbs and 605 Justice Stephen.
Now, your Honours, in that case, although it was not necessary for the whole Court to decide the issue, a State sought to challenge a decision between itself and the Commonwealth which had been given a short time before as to the validity of the Senate (Representation of Territories) Act and it was held that, because the Attorney‑General of the State was joined as a party, there were, therefore, different parties with the consequence that there could not be any binding res judicata or issue estoppel.
May I refer your Honours also to what was said by Justice Fullagher, with Justice Williams agreeing, in the Second Uniform Tax Case, Victoria v The Commonwealth (1957) 99 CLR 575 at page 654. May I refer also, your Honours, to what was said by your Honours Justice Gummow and Justice Hayne in the Wakim legislation (1999) 163 ALR at page 316, paragraphs [160] and [164].
GLEESON CJ: Wakim litigation.
MR JACKSON: I am sorry, your Honour, I do not recall what I said.
GLEESON CJ: You said Wakim legislation.
KIRBY J: This is the Wakim legislation.
MR JACKSON: Your Honour, if I said that that is against me, and may I withdraw that as much as I can. Your Honours, the underlying notion in relation to litigation, be it constitutional or otherwise, is that it is litigation inter partes. There are exceptions to that, of course, but generally speaking that is so. And your Honours that can be seen from the course adopted by six Justices in the one case to which I will take your Honours, Metwally v The University of Wollongong (1985) 60 ALR 68 – this is Metwally [No 2]. And your Honours there ‑ ‑ ‑
GUMMOW J: 60 ALR?
MR JACKSON: Yes, your Honour, 60 ALR 68.
GUMMOW J: Thank you.
MR JACKSON: I will give your Honours copies of the case. And there, your Honours, an inconsistency case had proceeded on the assumption that the Commonwealth law was valid. Fresh ideas, new views came, and it was sought to argue then the question whether the Commonwealth law that gave rise to the inconsistency was, itself, intra vires.
Your Honour, that was not permitted and the relevant passages, your Honours, can be seen at page 70, if I could refer to about point 4 on the page:
On 20 February 1985 counsel for Mr Metwally indicated to the Court –
et cetera. The matter then came before this Court. At the bottom of page 70, the Court said:
It may be assumed, without deciding, that the court has power to vacate its order –
and then at the bottom of the page:
The present is not a case in which an order was made by mistake or as a result of fraud –
et cetera. Your Honours, I will not read out the passage, but may I say throughout the remainder of that decision, and in particular on page 71, line 40, through to the end of the decision on the next page, what was done was to apply the fairly usual tests for circumstances in which a party is allowed to present a new argument. And, your Honours, that was an argument about the validity of a Commonwealth enactment.
It seems to be a little against, with respect, the propositions that would follow from the adoption of the void approach. Because if the void approach was correct, then there would seem to be no reason why this Court would not have said, “Yes, as a matter ex debito justitiae”, if one likes, or “by reliance upon section 5 of the Constitution Act you are entitled to have it set aside, or have the issue determined”.
Your Honours that reflects the notion in our submission that decisions on constitutional issues are made in litigation. Undoubtedly the Constitution is binding on all, but as we have submitted earlier, a decision that a law is invalid does not, in our submission, undo every previous decision. To adopt that view would really mean that section 75(v), in its application to decisions such as the decisions of the Federal Court in question in this case, would be mandatory – or its application would be mandatory, not discretionary. Your Honours, could we seek to say that no matter how geriatric, as it were, the decision, provided that it still had some operation, section 75(v) would have to be applied.
Your Honours, could I note in passing something in relation to the United States position. We agree with our learned friends for the Commonwealth that the latest decision of the United States Supreme Court appears to be Willy v Coastal Corporation (1992) 503 US 131. We will give your Honours copies of the decision, but it appears to indicate that Chicot is alive and well. It was a contempt case where the United States District Court was ultimately held to have no subject matter jurisdiction and in the unanimous decision of the court, at page 137, Chicot was referred to as still applying. The relevant passage, your Honours, at page 137, your Honours will see about point 4 on the page referring to Chicot.
Your Honours, the last matter with which I wish to deal is this, that some observations have been made by members of the Court about the stream and the source. Your Honours, that concept of the stream not rising above the source, as it were, is well established, of course, but the usual application of it is to section 51 powers. Could I refer your Honours and give your Honours a reference in that regard, to the discussion by Justice Stephen in Murphyores Incorporated Pty Ltd v The Commonwealth of Australia (1976) 136 CLR 1, at page 11. The situation obtaining here, in our submission, is rather difference: the source is Chapter III and it authorises the creation of Federal Courts. It operates in a context where courts, as at Federation, had attributers such as the fact that their orders were valid unless set aside, if they are courts of a particular kind.
Federal Courts, in our submission, can have conferred on them all of the jurisdiction referred to in sections 75 and 76, a very, very wide jurisdiction, really, what one might expect federal Commonwealth jurisdiction to be. Your Honours, we would submit there is no reason why the Parliament should not be able to say, by legislation, that the court can decide its own jurisdiction and, unless set aside, that is the position. Of course, it cannot say it can do it unexaminably but, your Honours, it is able to do that.
Your Honours, when one goes, and if I could just say one other thing about that, if one goes to the terms of section 51(xxxix) of the Constitution, your Honours will see that it allows the enactment of laws with respect to:
Matters incidental to the execution of any power vested by this Constitution in the Parliament –
is the power to create Federal Courts. Your Honours, there is no reason, in our submission, why, if it were not inherent in the power itself, that there is no reason why section 51(xxxix) would not extend to the making of a law as a matter incidental to the execution of the power to create Federal Courts
to give particular attributes such as that presently in question, to the orders made by such courts.
Your Honours, if one goes to the Federal Court of Australia Act, it is, in our submission, clearly intended to have the attributes of a court of that kind. May I, in that regard, your Honours, refer, of course, to section 5? It is created as being a superior court of record and a court of law and equity. From there, your Honours, one goes to section 22, the provision which gives it the widest powers, no doubt within jurisdiction, to grant all remedies, and so on. Your Honours, one goes then to section 23, again to rather similar effect, and to section 32, and your Honours will see in the opening words of section 32(1) it says:
To the extent that the Constitution permits –
that is discussed in Adam P. Brown –
jurisdiction is conferred on the Court in respect of matters not otherwise within its jurisdiction that are associated –
and then, your Honours, the court recognises that there may be matters in which an issue of jurisdiction arises and section 43(1) says that:
the Court or a Judge has jurisdiction to award costs in all proceedings before the Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs shall not be awarded.
Now, your Honours, none of those provisions seem exceptionally unusual. They seem the kind of provisions one would expect to see in a superior court exercising federal jurisdiction. Your Honours, those are our submissions.
GLEESON CJ: Thank you, Mr Jackson. We are obliged to all counsel for their submissions and we will reserve our decision in this matter.
AT 4.39 PM THE MATTER WAS ADJOURNED
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