Rizeq v The State of Western Australia

[2017] HCATrans 11

[2017] HCATrans 011

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth   No P55 of 2016

B e t w e e n -

JOHN RIZEQ

Appellant

and

THE STATE OF WESTERN AUSTRALIA

Respondent

KIEFEL CJ
BELL J
GAGELER J
KEANE J
NETTLE J
GORDON J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 1 FEBRUARY 2017, AT 10.15 AM

Copyright in the High Court of Australia

MR M.D. HOWARD, SC:   May it please the Court, with my learned friends, MR J.S. STELLIOS and MS R.R. JOSEPH, I appear for the appellant.  (instructed by Minter Ellison Lawyers)

MR P.D. QUINLAN, SC, Solicitor‑General for the State of Western Australia:   May it please the Court, with my learned friend, MS R. YOUNG, I appear for the respondent.  (instructed by State Solicitor (WA))

MR S.P. DONAGHUE, QC, Solicitor‑General of the Commonwealth of Australia:   May it please the Court, I appear with my learned friends, MS K.L. WALKER, QC and MR G.A. HILL, for the Commonwealth Attorney‑General intervening in support of the respondent.  (instructed by Australian Government Solicitor)

MR M.G. SEXTON, SC, Solicitor‑General for the State of New South Wales:   If the Court pleases, I appear with my learned friend, MR S. ROBERTSON, for the Attorney‑General for New South Wales who intervenes in the proceedings.  (instructed by Crown Solicitor (NSW))

MR P.J. DUNNING, QC, Solicitor‑General of the State of Queensland:   May it please the Court, I appear with my learned friend, MS F.J. NAGORCKA, for the Attorney‑General for Queensland intervening in support of the respondent.  (instructed by Crown Solicitor (Qld))

MR M.E. O’FARRELL, SC, Solicitor‑General for the State of Tasmania:   May it please the Court, I appear with my learned friend, MS S.K. KAY, for the Attorney‑General for the State of Tasmania intervening.  (instructed by Crown Solicitor for Tasmania)

MR R.M. NIALL, QC, Solicitor‑General for the State of Victoria:  May it please the Court, I appear with my learned friend, MS S GORY, for the Attorney-General for Victoria.  (instructed by Victorian Government Solicitor)

MR C.D. BLEBY, SC, Solicitor‑General for the State of South Australia:   May it please the Court, I appear with my learned friend, MS L.K. BYERS, for the Attorney‑General for South Australia intervening in support of the respondent.  (instructed by Crown Solicitor (SA))

KIEFEL CJ:   Yes, Mr Howard.

MR HOWARD:   May it please the Court.  It is the central plank of the appellant’s case that the WA Misuse of Drugs Act could not and did not apply to the trial of the appellant by its own force.  This Court has consistently made statements to the effect that a State law cannot, of its own force, apply in federal jurisdiction and we have cited some of the cases in which those statements have been made in our submissions at paragraphs 34 and 36.

That general proposition as put is not accepted by Western Australia and the interveners.  They contend, not universally but mostly, that there can be a direct application of a State statute which creates a norm or imposes a liability.  We obviously will come to that.  Before we do, we note that it appears to be common ground that there are at least some State statutes that do not and cannot apply of their own force in federal jurisdiction. 

The State statutes which are accepted as not applying of their own force are State laws which go to the conferring, defining and investing of federal jurisdiction and that expression appears in the APLA decision at paragraph 230 in the judgment of Justice Gummow.  I do not propose to read it to your Honours.  It does not appear obviously exclusively there.  But it appears to be common ground that laws of that character – State laws of that character do not and cannot apply of their own force in the exercise of federal jurisdiction. 

In addition to that acceptance, there are two further matters which appear to be, again not universally but mostly, common ground.  The first is that for laws of that character, the ones conferring, defining, investing the jurisdiction, there needs to be Commonwealth legislation which applies them.  Secondly, and again, not universally adopted but it certainly is, as I understand it, the position of Western Australia, Queensland and Victoria that when such State laws are applied by Commonwealth legislation, those State laws become new federal laws.

So the question arises – obviously a number of questions arise – but a question arises as to why it is that there is this distinction to be drawn when a certain set of State laws which, as I say, is mostly accepted cannot apply of their own force and other laws which it is said, again, mostly against us, that can apply directly in federal jurisdiction.  Our submission will be that the distinction which is sought to be drawn against us is not justifiable when regard is had to the underlying principles.  Secondly, that it is not consistent with statements made, but more importantly perhaps, cases decided in this Court. 

Now, although the statements that are made as we have cited in our submissions are clear about State laws not applying of their own affect, as I say what is said against us mostly about those statements is well, they are dealing - they must be understood to be dealing with the conferring, defining, investing of federal jurisdiction in that they do not extend, even though they are expressed in some cases in unqualified terms, they do not extend to laws creating a norm or a liability.

What we say about that - and I will come to the cases - is that at least in these cases in this Court, and I will come back to them, but if I can outline them - in the Austral Pacific Case, in the ASIC v Edensor Case, in the R v Oregan Case, in Macleod v ASIC and in Parker v the Commonwealth, which unfortunately does not appear on any of our lists but when I come to it, we have handed to the Court a copy of it, we say in at least those five cases this Court has held that section 79 and, in the case of Parker, section 80 - actually if I can correct myself, both in the case of R v Oregan and in the case of Parker v the Commonwealth, either 79 or section 80 of the Judiciary Act was required to and did pick up State laws and applied them in federal jurisdiction but State laws which created norms or imposed liabilities. So we say that section 79 has been held in this Court to pick up and apply State laws which create norms or liabilities in federal jurisdiction.

GAGELER J:   Independently of the action of a court?

MR HOWARD:   Yes, your Honour, and without there being a suggestion of direct application in circumstances where if the direct application theory were correct, then in each of those cases the liability or the norm created by – I do not want to use loose language obviously but created by the State statute, if it could apply directly in federal jurisdiction then there would not have been any need for the invocation of section 79 or section 80 of the Judiciary Act.  In fact, on the direct application theory, it would be wrong for those to have been invoked or used.

Now, I will come to those cases but if I go back to the question of what is the rationale that underlies what appears to be the accepted position that State laws which confer, define, invest jurisdiction cannot apply of their own force, what is the justification for that and then does that justification carry over to other laws of a State?  We say it does.  The justification, in our submission, is - and it appears to be again mostly accepted for those State laws conferring, defining, investing - that it is an area of exclusive Commonwealth power and that is why the State law cannot, of its own force, apply. 

That has been expressed in different ways but it was expressed in MZXOT at paragraph 20 as being the exclusive power of the Commonwealth because of Chapter III.  That was adopted by his Honour Justice Gummow in the APLA Case, paragraphs 228 to 230, and it seems to be accepted that the Commonwealth must have the exclusive power as the sovereign authority who makes provision for how the judicial power of the Commonwealth is to be exercised.  It seems, again, broadly to be common ground.  We say that justification - and I will develop the submission - extends to laws creating norms or liabilities as well. 

Federal jurisdiction, as we know, from as early as the case of Ah Yick v Lehmert (1905) 2 CLR 593 - it is picked up in many cases since obviously, is the authority to adjudicate derived from the Commonwealth Constitution and laws. The concept, as Justice McHugh may have been ruefully noting in Austral Pacific in footnote ‑ ‑ ‑

BELL J:   What page?

MR HOWARD:   I apologise, your Honour, it is at page 153 of the report.  It is footnote (54) which appears in paragraph 50.  His Honour there cites the formulation that I have just mentioned about federal jurisdiction being the authority to adjudicate.  His Honour takes it from the decision of Baxter, I mentioned an earlier one, and then says:

This simple exposition of the concept of “federal jurisdiction” gives no indication of the complexity it has assumed –

One of the consequences ‑ ‑ ‑

KIEFEL CJ:   Justice McHugh, at the paragraph to which you have taken us, speaks of the consequence of federal jurisdiction displacing State jurisdiction that existed.  That is the effect. 

MR HOWARD:   Yes, your Honour.

KIEFEL CJ:   His Honour does not speak of the substantive law having been replaced.

MR HOWARD:   Not at that point, no, I accept that.  The point that I was seeking to take from that, hopefully, not too opportunistically, is that the standard formulation of what is federal jurisdiction is not the whole of the story.  We say that it also has the consequence of establishing a federal law area and this is referred to – it, perhaps, was initially hinted at or the underpinning of it appears from her Honour’s judgment in – her Honour Justice Gaudron’s judgment in Commonwealth v Mewett where her Honour talked about there being an integrated court system comprised of federal courts created and State courts invested with federal jurisdiction. 

Can I say that is cited with approval in John Pfeiffer?  It might be more useful if I can take your Honours to the John Pfeiffer decision in 203 CLR because it is at paragraph 34 where that passage that I have referred to – and for the record, the Commonwealth v Mewett reference starts at – or is on page 524 in the decision of her Honour Justice Gaudron.

KIEFEL CJ:   I am sorry, what was that page, Mr Howard?

MR HOWARD:   Page 524, your Honour. 

KIEFEL CJ:   Thank you.

MR HOWARD:   But it is cited, as I say, with approval in the joint judgment of Chief Justice Gleeson and then Justices Gaudron, McHugh, Gummow and Hayne.  

KIEFEL CJ:   This is in the context of choice of law rules.

MR HOWARD:   It is, your Honour, and when one looks at – the two are not completely removed, as we will come to.  The references in John Pfeiffer to the law area appear at paragraphs 2 and 18.  At paragraph 2 on page 514, the joint judgment says – perhaps six or seven lines up from the bottom:

And with respect to matters that fall within federal jurisdiction, the Commonwealth of Australia is, itself, a law area.

That law area is a consequence of a federal jurisdiction.  Our submission is ‑ ‑ ‑

KIEFEL CJ:   But you take from that that it can only be a law – a federal law as such operating in that federal law area – you seem to deny the possibility that a State law can operate in federal jurisdiction.  That is your point?

MR HOWARD:   It is, your Honour.  It cannot operate of its own force.  It requires Commonwealth legislation.

KIEFEL CJ:   What is the matter when federal jurisdiction is invoked?

MR HOWARD:   The matter is whether the appellant contravened or breached section 6(1) of the Misuse of Drugs Act as applied by section 79 of the Judiciary Act.  That formulation – I accept it is inelegant – is similar to that which this Court thought ought to have been or was implicit in the charge in the Mok decision. 

So your Honours will recall, of course, in the Mok decision Mr Mok had been charged with an offence under the New South Wales Act but it was treated as though it was the New South Wales Act as applied by, in that case, the provisions of the Service and Execution of Process Act. 

KIEFEL CJ:   Does that comprehend then that the State Act always has the possibility of being a federal Act if a person is a non‑resident of the State?

MR HOWARD:   Yes, your Honour, it does.

KIEFEL CJ:   So it sort of looms there.

MR HOWARD:   It does and it ‑ ‑ ‑

KIEFEL CJ:   And it is brought into effect by an offence being committed by a non‑resident.

MR HOWARD:   Yes.

GORDON J:   Does that require amendment to the indictment?

MR HOWARD:   Well, there was no difficulty thought in Mok in the sense it was ‑ ‑ ‑

GORDON J:   I am talking about here.

MR HOWARD:   It may have required an ‑ ‑ ‑

GORDON J:   What would it say?

MR HOWARD:   It would probably more elegantly - but something along the lines that I posited before, that it was in breach of section 6(1) of the Misuse of Drugs Act as applied by section 79 of the Judiciary Act to the appellant.  Now, if I can return to the question your Honour the Chief Justice asked me, and we will have more to say about the timing, for want of a better expression, the timing of the offence, as much is made against us about the timing of the offence.  But it is possible that if Mr Rizeq had moved to Western Australia before he was charged – he was then charged, or the indictment was entered – that the matter would not have ever been in federal jurisdiction.

BELL J:   Let us assume that Mr Rizeq was a resident of Western Australia and in one of these lengthy drug prosecutions Mr Rizeq on bail moved to South Australia - amend the indictment?

MR HOWARD:   I think the way that his Honour Justice Gummow dealt with it in Momcilovic, and I am not sure if that is the correct pronunciation, but the way that his Honour dealt with it was to talk about it at the time that the prosecution was commenced because, of course, in that case Ms Momcilovic had been resident in Victoria but by the time of the charge she was resident in Queensland. 

So, I think in answer to your Honour’s question, there must be a point and the point that we would say the federal matter is engaged is at the point where the prosecution is commenced and we have given the Court the reference in the submissions to how that works ‑ ‑ ‑

KIEFEL CJ:   Well, does that point in time direct attention to jurisdiction?

MR HOWARD:   It does, in the sense that there must be a conferral of jurisdiction at that point and we will come to it but again what is said against us in some cases is that the language of section 79 talks about a court exercising federal jurisdiction so that you must have a court that is already exercising federal jurisdiction and section 79 cannot create the offence which then leads to section 39(2) of the Judiciary Act investing jurisdiction; that is what is put against us.

But it does not take into account what happens in the Macleod Case because in the Macleod Case, which is really in some respects, it goes off on a different point but in Macleod there was an offence against, to distinguish it, the State Corporations Law. Section 79 picked up that State offence, if I can call it that, and it is important to understand – I will come back to that ‑ but it picks it up, section 79 is held by this Court to pick it up and section 39(2) is said to be how the Court of Petty Sessions in Western Australia was invested with federal jurisdiction. So there was no problem of the timing sought that is put against us, apprehended by this Court in Macleod.  The offence was picked up and invested all at the same time.

GAGELER J:   Well, I am not sure that timing hugely matters because you could have a non‑diversity case where the defendant is a resident of Western Australia but in the prosecution the defendant raises a constitutional defence, perhaps that the State law is invalid under section 109. That would bring the entire proceeding, or at least the entire matter within federal jurisdiction, would it not?

MR HOWARD:   There would be, I think, can I say, with respect, your Honour, there is a question of the timing of section 109 and section 79; section 109 of the Constitution and section 79.

GAGELER J:   Yes.

MR HOWARD:   In Agtrack and I will give your Honours the paragraph reference but section 109 has to be - the 109 question has to be determined before one gets to section 79 so that it - one might think that is arbitrary and I know your Honour Justice Gageler writing extracurially has found that perhaps curious but if the Agtrack decision about the ordering is correct then one would resolve the section 109 inconsistency argument before there would be any question of picking up or not picking up that State law.

GAGELER J:   Is the suggestion then you would have two matters sequentially.  You would have a matter in federal jurisdiction, the constitutional issue would surely be – has to be in federal jurisdiction and then if that is resolved one way you would go on to a matter in State jurisdiction.  It would be an odd result.

MR HOWARD:   No, I do not think – I was not intending to suggest that.  I think that the point that your Honour Justice Gageler raised with me is the point that Justice Walsh in Felton v Mulligan ‑ ‑ ‑

GAGELER J:   Yes, that is the point.

MR HOWARD:   His Honour says, well, you know, as soon as the constitutional defence or a federal law of defence is raised the matter comes into federal jurisdiction.  So, that, with respect, to us seems to be correct.  So the short answer to the question your Honour Justice Gageler has asked me is yes, at that point the matter is in federal jurisdiction.

GAGELER J:   It would remain in federal jurisdiction even if the constitutional point is disposed of? 

MR HOWARD: That is right. Whether it has the effect, though, of picking up the State law, as I say, there is a question of timing between the section 109 we are told from Agtrack and the paragraphs 61 to 63, I do not need to go to them, that one would have the section 109 point resolved before one came to the question of the picking up of the laws. So the justification that supports those laws conferring, defining, investing is that the sovereign authority is the Commonwealth Parliament subject, obviously, to the Constitution and it is for it alone to make laws of that effect.

We say, with respect, it is also part of its sovereign authority to make laws in that federal law area which create norms or liabilities.  That is not, in our submission, something that the State or a State can do of its own force or of its own legislative force.

GAGELER J:   Is there any authority for that?

MR HOWARD: The cases that I have mentioned, which I will come to, those five cases, in none of them is there a suggestion of direct application. They are all through the invocation, as I said, of section 79 or section 80 of the Judiciary Act.  So that is the effect that we contend for in the cases.  If your Honour is asking me is there a case which supports the constitutional or the theoretical underpinning we say not for statutes creating liabilities and norms but we say that is the justification for the State laws conferring, defining, investing and we say it extends over.  But if your Honour is asking is there direct authority for the extension, then not as far as I am aware.

GAGELER J:   All right, and what is the theory of the extension?

MR HOWARD:   It is that the federal law area is a creation of Chapter III and that it is for the sovereign authority to legislate within that law area.

BELL J:   What is the source of authority for the Commonwealth Parliament to legislate in relation to areas that are the subject of prohibition under State criminal law and in respect of which one might think the Commonwealth had no power under the Constitution?

MR HOWARD:   Ours is an unusual case, of course, because there are analogous offences ‑ ‑ ‑

BELL J:   Yours is.  Let us move to a norm of conduct that does not produce that result, to one of the many norms of conduct that it is open to the State to prescribe but not the Commonwealth.

MR HOWARD:   Our submission on that is that it arises out of the effect of Chapter III with the incidental power.  I will come back to that.  I perhaps uncharacteristically sold the submission a little short in answer to the question your Honour Justice Gageler asked me about whether there was any authority on the point.

Perhaps I can take your Honours to the APLA decision where Justice Gummow was citing the Boilermakers’ decision.  If I can take your Honours to paragraph 235 which is on page 407 - it starts on page 407 but I want to direct your Honours’ attention to the top of page 408 if I can.  It is the last part of the quotation there where it is said:

when an exercise of legislative powers is directed to the judicial power of the Commonwealth it must operate through or in conformity with Ch III.

Again, there is reference to the judicial power but that is developed or applied in the The Queen v Oregan decision by his Honour Justice Webb - if I can take your Honours to that decision.  In R v Oregan Justice Webb was sitting at first instance.  There was an application brought for the custody of a child.  The child had been removed from Victoria by his father to Tasmania, so at the time that the application was brought by the wife she was resident in Victoria and the husband and child were resident in Tasmania. 

We will come to that because we rely on this as being one of the cases where the State statute is applied through section 79. There is no question in our submission of an indirect application. At page 330 of the report, his Honour at the top of the page is dealing with what is the applicable law and, in the sentence that starts about five lines down:

So that whenever this Court is dealing with custody it is exercising judicial power. No State legislature can confer any judicial or other power on this Court. But the Commonwealth Parliament can and has in ss. 79 and 80 of the Judiciary Act 1903‑1955 conferred on this Court the judicial power and duty to apply the appropriate State law in proper cases.

Now, in combination - what we say is that the passage from Boilermakers’ cited by his Honour Justice Gummow in APLA, and this passage in Oregan that we have cited from his Honour Justice Webb, is not just about authority to decide.  It is about the substantive law to be applied so that a State legislative command, a State act is not done in conformity with Chapter III.  It is not done through Chapter III.

GAGELER J:   So are you getting that out of the last sentence of the passage from the Boilermakers’ Case extracted by Justice Gummow in ‑ ‑ ‑

MR HOWARD:   The last sentence, your Honour?

GAGELER J:   Yes.

MR HOWARD:   Yes.

GAGELER J:   Is that not simply saying if the Commonwealth Parliament wants to enact a law under a head of legislative power in section 51 to confer jurisdiction on a court, it has to do it in conformity with section 76(i) or section 77 of the Constitution and comply with Chapter III. That is all it is saying. It is not directed to statements.

MR HOWARD:   No.  I accept that.  But it is, we say, true that any legislature – any legislation which is going to operate in the law area or is going to operate in federal jurisdiction must come through Chapter III.

GAGELER J:   All I am suggesting is you cannot get it out of that sentence.  You might get it from somewhere else but ‑ ‑ ‑

MR HOWARD:   We say that a State Act or a State legislative command is not done in conformity with Chapter III when directed to a court exercising federal jurisdiction.

GAGELER J:   Well, that is the narrow view of section 79. That is the view of section 79 – its operation that you say is generally accepted.

MR HOWARD: Yes. At the moment I am in the part of the argument where we are saying there is no direct application. If the Court accepts there is no direction application a further question arises – well, if one needs to go through section 79 or section 80, what is the effect on the State law of going through those provisions and particularly the Commonwealth says against us, as your Honours will be aware, well, yes, you need to go through – and it is a primary submission at least, yes, you need to go through section 79. But that does not have the effect of turning the State law into a federal law. We will come to that. In our submission, it is only for the Commonwealth Parliament to make a command to a court exercising federal jurisdiction in the law area.

GAGELER J:   Why?  Why?

MR HOWARD:   We say that, as I say, the justification is the same as in relation to the justification for the conferring, defining and investing.  In crude terms, the federal law area belongs to the sovereign authority of the Commonwealth Parliament.  It does not belong – it is not for the State legislatures to command or to make acts which apply in that law area.

GAGELER J:   So the concurrent incidental power to legislate becomes an exclusive Commonwealth power in all cases within federal jurisdiction?

MR HOWARD:   We say the exclusivity arises from Chapter III and the incidental power allows for the Commonwealth to legislate in that law area.  Now, we would not say, and we do not say, that it allows it to – we do not need to go so far as to say that it allows the Commonwealth to legislate fully that law area recognising that it is an incidental power.  Our submission is it extends to allow the Commonwealth to pick up unamended the State Acts.  That is the submission we make.

So it is put against us – and we do come to this, but it is put against us there is no general head of power.  We accept that as we must, but we say the incidental power goes at least as far as allowing the Commonwealth to pick up unamended State statutes.  In our submission, provisions of the Judiciary Act are the Commonwealth Parliament giving the same command to all courts within the federal law area or exercising federal jurisdiction.  That is the function that those provisions of the Judiciary Act provide.  On the direct application theory, courts in the one law area will be subject to multiple commands of different sovereign authorities. 

GORDON J:   Can we test that in this way?  Under 75(iv) the High Court has jurisdiction – original jurisdiction – in the diversity context to have heard this criminal trial.  Where does 79 come into it in that context on your argument?

MR HOWARD:   It would pick that law up.

GORDON J:   What law?

MR HOWARD:   It would pick up – if it was commenced or in the original jurisdiction of this Court in Western Australia it would pick up that State law unamended if it was capable of being picked up.

GORDON J:   But that does not need 79, does it?  It is in federal jurisdiction and it is the trial of a State offence.  We do not get to 79, do we?

MR HOWARD:   I think we would say, your Honour, that one does need to of course on ‑ ‑ ‑

GORDON J:   Even if it went to the High Court in its original jurisdiction?

MR HOWARD:   Yes, because ‑ ‑ ‑

KEANE J: So 75(iv) could not have had any practical operation until the enactment of section 79 of the Judiciary Act.

MR HOWARD:   There would have been, it appears subject – leaving aside the common law which would have applied in any event, there may well have been gaps without section 79 and section 80.

KEANE J:   But it would mean without section 79 your client, who had committed an offence, could not have been tried, could not have been convicted of that offence, even in the diversity jurisdiction.

MR HOWARD:   The difficulty would be there would not be a law applied.  It arises, in part, because ‑ ‑ ‑

KEANE J:   So that somehow or other, the law of the State has been sterilised without the Commonwealth doing anything?

MR HOWARD:   That is the consequence of the argument.

GORDON J:   When the whole purpose of diversity jurisdiction was in the new federal compact to reinforce the idea that there were – that the State could prosecute people who were not resident of their States.

MR HOWARD:   That is the way it works in combination with the Judiciary Act.

GORDON J:   If you get there.

MR HOWARD:   Yes, of course ‑ ‑ ‑

KEANE J:   If you do not, the effect is that there is no offence to be prosecuted.

MR HOWARD:   Unless it is an offence under common law, yes, your Honour.  There would not be – no, I am not sure of that – if we lose on direct application, if your Honour Justice Gordon, the question that your Honour posits is correct or the theory behind the question is correct, then the matter – there was no chance of the State law ever becoming a federal law.  I think that is ‑ ‑ ‑

GORDON J: The question is asked in the context of diversity jurisdiction in respect of a State prosecuting a resident not of its State and I am testing the proposition by asking what happens when we look at the jurisdiction of the Court provided by 75(iv) to the High Court in the Constitution without reference to the Judiciary Act.  That is why I am asking.

MR HOWARD: No, I understand the question and it does, I mean, there are statements to the effect that section 79 has its quasi‑constitutional significance but it does ‑ ‑ ‑

GORDON J:   I think it is very dangerous to pick up statements out of context and that is why, I think, one has to look at what we are dealing with here.

MR HOWARD:   There would be no gap without the Judiciary Act, in our submission, in terms of a common law offence. The issue would not arise. I know we are not dealing with the common law. I was going to say in part answer to the question that your Honour Justice Keane asked, there is no equivalent that applies State law or binds federal courts with State law. There is no equivalent to covering clause 5 that works the other way. So there is nothing, in our submission, that suggests that a federal court is bound to apply the law of the State in the same way that covering clause – well, in the reverse way from covering clause 5.

KEANE J:   But why would there need to be?  Your client present in Western Australia commits an offence against the law of Western Australia.  The question then is in what court is that offence to be prosecuted?  The Constitution by 75(iv) provides the answer, it is the High Court or pursuant to other Commonwealth legislation, another federal court or, sorry, a State court exercising federal jurisdiction but all that proceeds on the assumption that there has been an offence committed or at least an allegation that an offence has been committed giving rise to a matter that has to be determined. 

Section 75(iv) is just providing authority to decide. It is not purporting to affect the force of any State law because the State law has given rise to the alleged offence that needs to be tried between a resident of a different State and the State seeking to try the offence.

MR HOWARD:   Certainly, that is exactly the point that is put against us.  We say it is the consequence of the exclusivity of the Commonwealth’s Parliament within the federal law area which is the ‑ ‑ ‑

KEANE J:   So why would not section 80 simply have said “any offence tried in federal jurisdiction”?  If it is all about federal jurisdiction rather than choice of law, why would section 80 have used the language of “Commonwealth law” rather than simply saying “any charge in federal jurisdiction”?

MR HOWARD:   The history ‑ it is an excellent question - there is no good answer to it because the history of the drafting of section 80 is quite inconclusive.  It had different formulations over a number of years.  The final was adopted without there being much that illuminates from the debates or the discussions and why that form of words, as I say, why that form of words is adopted is ‑ ‑ ‑

KEANE J:   What one certainly does not find in any of the debates is any discussion about the application of the section 80 provision in relation to trials of offences against State laws; absolutely not a word of it.

MR HOWARD:   No, but there were - I accept that.  There were different formulations, however, which - and it is complicated because the history of section 80, the drafting of it, went over periods at the beginning where there was no diversity jurisdiction included and then later when there was diversity jurisdiction and there is no discussion about the interaction between those two in the debates.  While I say it is an excellent question, with respect, the debates and the discussion do not, in our submission, provide any real guidance.

The language that is used in section 79 does not, in our submission, support the distinction drawn against us between those laws conferring, defining and investing and norms and liabilities. Textually, there is not that suggestion and as I say, or as I said earlier, there are at least five cases in which section 79 was used or invoked to apply State law which created a norm or a liability in circumstances where, on the direct application theory, there need not have been a recourse and in fact, ought not to have been recourse to section 79 or section 80.

EDELMAN J:   What do you say about the use of the words in 79:

be binding on all Courts –

and in section 80:

govern all Courts –

and the conscious departure in those phrases from the words that were used in section 34 of the 1789 Judiciary Act?

MR HOWARD:   The last part of the question, your Honour, I will have to come back to the Court on.

EDELMAN J:   Yes.

MR HOWARD: There is also an issue that is put against us, I think, particularly in the submissions of South Australia, that one should look at the words in section 79 which, as your Honour Justice Edelman has said, are binding on all courts and compare them with the language in say section 68 which applies so far as they are applicable to persons and Macleod, which I will come to, it was not thought in the decision, not that it is expressly considered but section 79 was used to apply the State Act to Mr Macleod in his prosecution in a State court exercising federal jurisdiction.

MR HOWARD:   So, as I said, I will have to come back to your Honour on the last part of the question but to the first part of the question we say that there is no particular significance to be attached to that. 

EDELMAN J:   What the last part of the question is really concerned with - and certainly come back to it - but it is the description that has sometimes been applied to section 34 of the 1789 Act as being concerned with the process of adjudication and whether that was the concept that was being applied in section 79 when it was speaking about binding courts rather than binding persons generally.

MR HOWARD:   It is put a different way but it is a similar point between section 79 and section 68, and it is put against us that 79, the words are more apt to be talking about things going to jurisdiction because they are binding on courts, whereas section 68, for example, is applicable to persons. That distinction has not been drawn or applied in the five cases that we cite to limit making a norm or a liability applicable to the company or the individual.

So that we would say in broad response to the question your Honour Justice Edelman asked that the “binding on all courts” formulation in section 79 also extends to persons and that is the operation that section 79 has been held to have, not just in those cases conferring, defining, investing federal jurisdiction. The first of those cases that I mention ‑ ‑ ‑

GAGELER J:   Before perhaps you go to that, can I just understand the structure of your argument?  Your first proposition is that there is no direct application of State statutes in federal jurisdiction.

MR HOWARD:   Yes, your Honour.

GAGELER J:   That is, there is a complete absence of State legislative power to make substantive laws which are applicable in what you describe as the federal law area.

MR HOWARD:   That is right.

GAGELER J:   If that is rejected, do you say that section 79 has some overriding application, that it picks up what would otherwise be a State law and turns it into a federal law or does your entire case stand or fall on that first proposition?

MR HOWARD:   I think we need to succeed on that first because if we do not – certainly as I understand the argument, if we do not succeed on that then the question or the proposition that was behind your Honour Justice Gordon’s question is, well, you do not get – and your Honour Justice Keane – you do not get to the Judiciary Act, you do not need to get to the Judiciary Act because you ‑ ‑ ‑

GAGELER J:   Just a related question then. 

MR HOWARD:   Yes.

GAGELER J:   In this federal law area, as you described it, I understand your proposition that there is – or I understand that you put that there is an absence of State legislative power.  Is there also an absence of common law?  Is it a vacuum?

MR HOWARD:   No, with respect, no.  There is a suggestion in the John Pfeiffer Case at – I just want to make sure I get the right reference – I think it is at paragraph 56 which is on page 531 in the joint judgment, and it is at the end of paragraph 56.

GORDON J:   What is the proposition in this paragraph?  Sorry, Mr Howard.

MR HOWARD:   I am sorry.  The question I was asked, which I have hopefully got right, is was there going to be a vacuum ‑ ‑ ‑

GORDON J:   Yes.

MR HOWARD:   ‑ ‑ ‑ and we say no, the common law would apply, and we say the common law applies in accordance with the suggestion made at the end of paragraph 56 that it was part of what is described as the ultimate constitutional foundation.  The common law did not – it was part of the system that was created it was assumed by, so it was not – I am trying to think of the right – there was not a vacuum, the common law continued to apply.

GAGELER J:   So the consequences - on your submission section 79 was a necessary provision to pick up State legislation but section 80 was not necessary.

MR HOWARD:   Section 80 does a number of things but section 80 was necessary to pick up any State statute which modified the common laws.  But otherwise, on what we are putting forward, one might have – or the common law would have remained or would have been part of the structure but a State statute amending it may not have been.  Of course, when we come to the cases of Oregan and Parker, we will see a certain flexibility by their Honours Justices Webb and Windeyer in the application of section 79 and section 80 but we will come to those. I do not want to interrogate, but your Honour Justice Gageler, does that answer the question?

GAGELER J:   Yes, thank you.

MR HOWARD:   In Austral Pacific – your Honours will be well familiar with it – the question – there was an employee of the Commonwealth which was Airservices for the purposes who had sued Austral Pacific and Austral Pacific then sought to issue a third‑party notice against Airservices pursuant to the Queensland Contribution Act through what was the Law Reform Act 1995. This Court applied the Contribution Act, we would say, to the proceedings through section 79 of the Judiciary Act.

There was no common law right to contribution or indemnity between tortfeasors and there was no direct Commonwealth law which applied. So the State Contribution Act was to give Austral Pacific a right – or impose a liability on Airservices. It had to take effect or it had to occur through the operation of section 79.

Now, it appears most plainly in the judgment of his Honour Justice McHugh but your Honours will see in the joint judgment of Chief Justice Gleeson, Justices Gummow and Hayne at paragraph 15 - and perhaps I need to say, of course, that because Airservices was the Commonwealth there was an interaction between section 64 of the Judiciary Act and section 79 of the Judiciary Act.  At 15, their Honours in the joint judgment, at the beginning of it say:

There is, accordingly, a strong argument that the Contribution Act applied as a surrogate federal law to adjust the respective rights and liabilities inter se of the two tortfeasors -

and that that was done by:

s 79 “picking up” the State law in its own terms.

Justice McHugh at paragraph 53 is to similar effect.  The point that we rely on for this is that there could not – this was a statute which created a liability, created a right, could not apply of its own force to the litigation and had to be picked up through the Commonwealth legislation.  It is not - the right of contribution which did not exist at common law in our submission cannot be characterised conveniently or happily as a law conferring, defining or investing of jurisdiction.  It creates a right, imposes a liability. 

EDELMAN J:   That would be true also of limitation laws but these types of laws are usually characterised as concerned with the authority to adjudicate rather than separately substantive laws, are they not?

MR HOWARD:   I think, with respect, there may be a distinction to be drawn between limitation laws which affect a right which is otherwise there.  They can work in one of two ways.  Well, they can work in a number of ways but they affect the right that exists outside of the limitation statute.  This is different, we would say, because without the right to proceed the right to adjust between tortfeasors was purely statutory.

The second authority that we have referred to or that I have referred to in this context is ASIC v Edensor. Now, your Honours will recall the question was to do with the Corporations Act of Victoria and there was a norm created by section 615 and then there were remedies provided by sections 737 and section 739. Again, it is plain that this Court applied – I should go back a step.

The matter was in federal jurisdiction because ASIC was the Commonwealth and this Court treated section 79 as picking up or applying or making binding the norm that was in section 615 as well as the remedies that were in section 737 and section 739. I do not need to read them but your Honours will find in the joint judgment of their Honours the Chief Justice, Justices Gaudron and Gummow, paragraphs 57 and 58, where there is reference to the adopting of the State law or the picking up of the law of Victoria and the…..of his Honour Justice McHugh at paragraph 130 where his Honour says that it applies as federal law.

GAGELER J:   Can you just point to the passages where it is held that section 79 was necessary – did, or was necessary to pick up section 615.

MR HOWARD:   Your Honours will see, perhaps of the two passages from the joint judgment of Chief Justice Gleeson and Justices Gaudron and Gummow the most plain is paragraph 58 where it is said:

In the present litigation, s 79 operated to “pick up” the laws of Victoria because the Federal Court was exercising federal jurisdiction in that State.

At paragraph 130, his Honour Justice McHugh referred to the application of the State law as a federal law.

BELL J:   I am sorry, what was that paragraph?

MR HOWARD:   Paragraph 130 which goes across pages 609 and 610.

KIEFEL CJ:   What is the joint judgment referring to at the beginning of paragraph 57 on page 587 when it talks about the identification of:

the independently existing substantive law –

which arises by the operation of Chapter III?

MR HOWARD:   Their Honours deal – this is one of the things, of course, that is put against us in a number of the submissions.  It is picked up, the expression “independently existing substantive law” comes from a decision that is relied on against us - Deputy Commissioner of Taxation v Richard Walter and it is cited in that paragraph. 

In Richard Walter, it was used in a discussion about section 75(v) of the Constitution. It might be just as well – I was going to deal with this later but I can deal with it now if it is convenient. I will take your Honours to Richard Walter.

KIEFEL CJ:   If it takes you out of the line of your argument we can come back to it, if that is more convenient.

MR HOWARD:   I am going to come to it.  Whether it disrupts the line of argument or not, I am ‑ ‑ ‑

KIEFEL CJ:   We will come back to it.

MR HOWARD:   May it please the Court.  Perhaps I can foreshadow there is also a passage that your Honours may want to ask me about in Edensor at 53 in the joint judgment as well, but I will come back to both of those.  The third of the cases that I mentioned in this context is the decision of R v Oregan.  I have mentioned it already.  The husband and the son were in Tasmania, the wife remained in Victoria and the question was who should have custody of the child and because it was held by his Honour Justice Webb that the wife had made her permanent home in Victoria, on page 333 in about the middle of the page, his Honour says at the start of the first full paragraph:

I have come to the conclusion that the applicant and the respondent are residents of different States with s. 75(iv).

I have already read a passage from page 330 and I will not read it again, but on page 330, his Honour also, about halfway down the page, said at the beginning of the paragraph:

The laws referred to in s. 79 include, I think, substantive laws, embracing those dealing with the custody of infants . . . Then the Victorian statute law relating to the custody of infants is binding on this Court when sitting in Victoria; but only in cases in which the laws in Victoria are applicable.

His Honour then construed the Victorian legislation, held that on its own terms it did not apply to the situation. So his Honour did not apply it through section 79 but did come to apply it through section 80 because the Judiciary Act held that it had modified the common law.

KIEFEL CJ:   Where does that appear?

GORDON J:   On page 331, I think.

MR HOWARD:   Yes, thank you, your Honour.  It is at page 331, about section 80.  So just at the end of the passage on 330 that I have read, his Honour then says:

I think these laws –

the laws of Victoria:

are not applicable to a person domiciled and residing in Tasmania.

But then over on page 331 about six lines down:

It is one thing to hold that the Victorian statute law is not applicable and quite another thing to hold that the common law as modified by the Victorian State law is applicable.

So the Victorian State law was picked up and applied, again a substantive right created by that State statute.

GAGELER J:   Where do we find the State statute?

MR HOWARD:   There is a discussion - because there were competing statutes, page 328 might not be the best passage.  Perhaps I can say page 325 at the top of the page, his Honour says at the end of that first paragraph:

In the matter of the custody of infants the statute law of these States is not identical, at all events in the wording.

Then at page 328 towards the top of the page, your Honours will see six or seven lines down, there is a paraphrasing of section 136 and 145 of the Victorian legislation and then section 10 of the Tasmanian and there is a discussion a bit further down the page.

GAGELER J:   So presumably they were State statutes that conferred power or jurisdiction on a court to award custody ‑ ‑ ‑

MR HOWARD: Yes, and as his Honour construed it though, particularly Victorian statute in that passage on 330, looking at the wording his Honour construed it so that it would only have application to a person domiciled and residing in – I am sorry, his Honour construed it so the Victorian statute was only binding and did not have application where the child was in Tasmania and that was why his Honour did not pick it up through section 79.

GAGELER J:   So what do you get out of this case?

MR HOWARD:   The Victorian State statute created a right in the wife to make application for custody of the child.

GAGELER J:   To a court, to a court.

MR HOWARD:   Yes, your Honour.

GAGELER J:   Which could then make an order?

MR HOWARD:   Yes, your Honour, but it was a right that did not - I think what your Honour Justice Gageler is asking me is, yes, it conferred the jurisdiction on the court but it was one of those provisions it appears which did two things.

GAGELER J:   Double function legislation.

MR HOWARD:   Yes, and it is in respect of that second function that we rely on it because the wife, it appears, did not have a right at common law to apply for the custody.  It was a statutory right that was applied ‑ ‑ ‑

BELL J:   The statutory right conferred power on the court to make an order for custody, if the court concluded it was in the paramount interest of the child, or something of that character.  Is that right?

MR HOWARD:   It did two things.  It certainly did confer the jurisdiction is that way but also it gave the right to make the application and for the order conferring custody, if that is the right expression.

BELL J:   Yes.

EDELMAN J:   But the court is not distinguishing between the operation of section 79 or in a case like - or in Oregan itself the operation of section 80, the application to either the first or the second of those points.

MR HOWARD:   No, I accept that, your Honour, but we say it must do both.  Yes, I accept that it does not expressly say so and it does not expressly talk, as some of the cases do, about the fact that the enactment might do the two things at the same time.  It does not say that in terms, no, but it must be doing that, in our submission.

I have touched on the Macleod decision already and we will come back to Macleod because it has some useful things, in our submission, to say about how one reads the interaction between section 79 and section 68 and I have already talked about the effect of it but we rely in this part of the argument because the State law was picked up through section 79 and applied to Mr Macleod and I mention it in answer to your Honour Justice Edelman’s question about was there a distinction between section 79 which is binding on courts and section 68 which is binding on persons and we say the effect of the Macleod decision is that there is no relevant distinction and in fact, the jurisdiction was conferred via section 39(2) on the State Court of Petty Sessions and not through section 68 which is what we contend for occurred in this case.

GAGELER J:   What was the State law relevantly picked up?

MR HOWARD: It appears in paragraph 1 – looking at this does not make one nostalgic for the joys of corporations legislation from times gone by but there is reference to the Corporations Law which came out of the Corporations Act (Cth) that applied as the law of Western Australia and it will no doubt be said against us at the end of paragraph 1, your Honours will see the last sentence:

The offences in question thus were offences against the law of Western Australia.

There are some other references of that ilk.  No doubt it will be said against us, well, that shows that the character did not change.  I know we are not in the character part of the argument, we are in the direct application part of the argument but we say that the Court – that judgment was doing nothing more at that point than distinguishing between the Corporations Act (Cth) and the Corporations Law (WA). But the offences were provided there. The liabilities were created by State law and at paragraph 10 the majority says – or the joint judgment says that:

s 79 of the Judiciary Act operated to “pick up” State law, that of Western Australia.

That piece of legislation or the effect of that – sorry, the conferral of jurisdiction then did not occur through section 68, it occurred through section 39(2). Your Honours will see that paragraph 9.

GAGELER J:   Is that the State law that was in issue, the offence‑creating provision or was it a procedural – was it not a question of whether a procedural law applied?

MR HOWARD:   The question for decision in the Court ‑ ‑ ‑

KIEFEL CJ:   Was it not a question of federal jurisdiction arising by reference to the appeal brought?

MR HOWARD:   It was.  What happened was that there was no question that the prosecution before Petty Sessions was okay – if I can say that.  Mr MacLeod then appealed and it was held that it was not in issue.  ASIC responded to that appeal.  They were unsuccessful before a single – ASIC was unsuccessful, Mr MacLeod overturned the conviction before a single judge, in fact, a commissioner, but a single judge of the Supreme Court.  ASIC then appealed from the single judge to the then Full Court of the Supreme Court purportedly under a State provision of the Justices Act which your Honours will see at paragraph 17 and the question was whether ASIC had authority or whether section 206A of the State Justices Act could be picked up to allow ASIC to appeal from the single judge of the Supreme Court to the Full Court of the Supreme Court.

GORDON J:   The whole point of the appeal is set out in the last sentence of paragraph 19.

MR HOWARD:   Yes, your Honour, and ASIC justified its position in two ways.  One, it said that the State Justices Act is picked up or, secondly, it said that it had power under its own legislation.

GAGELER J:   Are you putting some proposition that we should read Macleod as authority or as having decided that section 79 picked up the State offence‑creating provision?

MR HOWARD: That is the way it is referred to in paragraph 10 and we rely on it for that. We accept that the point of decision is further down the federal jurisdiction chain, as it were, but the Court did spend time explaining how, in this case, section 79, section 68 and section 39 worked and we will come back to those in a later part of the argument. If the question your Honour is posing to me is was that the central point we accept that it is not the point of decision but the Court spent time on that, as I say, to explain how at least those three provisions of the Judiciary Act work.  So we would say it is at least carefully considered, with respect.

GAGELER J:   Seriously considered dicta, is it?

MR HOWARD:   I am not sure if it is possible to stand in this position of the Court and ever contend that something was not seriously thought about.

KIEFEL CJ:   By six members of the Court, yes.

MR HOWARD:   Yes, we certainly do not seek to do that.  The last case in this is the decision in Parker v The Commonwealth 112 CLR 295. This is the forerunner to the decision of Blunden which we refer to or rely on in another part of our argument.  Mr Parker was killed in the collision between the Voyager and the Melbourne.  His wife sued the Commonwealth.  Your Honours will recall that accident occurred on the high seas some 18 to 20 miles offshore. 

His Honour Justice Windeyer sat in Victoria to hear the application.  It was initially commenced in the Admiralty jurisdiction but, as appears from page 298, about the middle of the page, his Honour considered the matter as if it were an ordinary action at law.  At page 305, his Honour about the middle of the page says ‑ ‑ ‑

KIEFEL CJ:   I am sorry, what was that page?

MR HOWARD:   Page 305.  So, of course, your Honours will know Mr Parker is dead; it is his wife who brings the action. At common law, as his Honour says in about the middle of the page, “no action lies for the death of a person”.  There was also a question of common employment.  Then coming down the page, your Honours, in that same paragraph will see the sentence that starts “In each State”:

In each State there is a statute similar to the English Fatal Accidents Act, 1846, Lord Campbell’s Act, giving the dependants of a man tortiously killed a right to compensation –

On page 306, his Honour says at the top of the page:

But the State law does not reach out into the high seas . . . The Court sits to exercise federal jurisdiction.  But there is no federal enactment operation directly; and the common law denies a remedy.  The solution of this difficulty must be sought by asking whether federal law attracts and adopts State law –

and then identifies sections 79 and 80 of the Judiciary Act.  His Honour then refers to Pedersen v Young and says:

But in whatever way they –

sections 79 and 80:

make the law of a State applicable as federal law, they do so only when the Court is exercising jurisdiction in that State.

A little bit further down his Honour says that he “sat in Victoria”, and then over on page 307, his Honour identifies over the course of that page two pathways to the application of the Victorian Fatal Accidents Act.  First his Honour looks at section 80 and says partway through that paragraph:

That is a modification by statute of the common law –

Coming down after the citation of Koop v Bebb and Lord Campbell’s Act, his Honour says:

I am prepared to regard the filling of the lacuna as a modification of the common law.

So his Honour was prepared to, or thought it open, to apply the Victorian statute through section 80, but he thought as a second possible pathway, section 79 might be invoked. His Honour then cites, as we do in our submissions, from his Honour Chief Justice Dixon in Commissioner of Stamp Duties (NSW) v Owens [No 2] that the purpose of section 79 provides not just the procedural law but also the rights of the parties to the matter. At the end of the paragraph, his Honour says:

Whatever path be taken the same end is reached – that I must have regard to the law of Victoria.

So again, there is no – it is a statute which creates a right and which is imposed through, which is applied through the agency of either section 79 or section 80 and it is not, we say, a law that again can conveniently be put under the rubric of conferring, defining or investing jurisdiction, and no question in the decision of a direct application of that State statute.

I have mentioned in the course of looking at that page, 307, the reference to the quotation from the judgment of Chief Justice Dixon in the Owens (No 2) Case. The language that the Chief Justice used, as we say in our submissions, again does not suggest the distinction which is drawn against us; rather, his Honour is referring not just to matters of procedure but also to the rights of the parties through the proceedings being picked up by section 79.

In the five cases – if I have counted correctly – that I have taken your Honours to, we say that is the way that section 79 and section 80 have operated, not just in relation to the conferring, defining, investing of jurisdiction but also the picking up of State statutes which create rights, create liabilities.

GAGELER J:   But through the agency of the Court in every case, I think, including this case.

MR HOWARD:   Yes.

GAGELER J:   So they are all going back to some language we used before.  They are all double‑function cases, I think.

MR HOWARD: The reason I hesitate in answering that question is that in some of those statutes there may have been ‑ I withdraw that. I accept the proposition. They certainly do those two things. In addition to pointing to the cases where section 79 and section 80 have been used and required by decisions of this Court to apply the State law, in our submission the contentions we make are consistent with what this Court has said otherwise provided means conception 79.

We have cited the decision of Northern Territory v GPAO, particularly at paragraph 80.  That paragraph is also referred to – I do not know if your Honours have returned Macleod, but paragraph 80 is one of the paragraphs which is cited – we perhaps do not need it back – with approval at paragraph 22 in Macleod.

Your Honours, if you have paragraph 80, it is directed to – or it mentions that – your Honours will recall that the cases draw a distinction between section 109 inconsistency and what “otherwise provided” means in section 79 of the Judiciary Act.  The sentence we rely on is the last two in paragraph 80 about there being a need to resolve the problem that arises by conflict between conflicting statutes having the same source:

The law of a State or Territory which is to operate as a surrogate law of the Commonwealth is to be measured beside other laws of the Commonwealth.

So this has two effects or we rely on it for two purposes.  The first is if there is direct application, then what is suggested in paragraph 80 would not be apt because you would be comparing statutes which have a different source – one would have a source in a State authority, the other would have its basis or its source in Commonwealth authority.  That is on the authority of GPAO not the way that “otherwise provided” within section 79 is to be interpreted – be interpreted as though the State statute picked up or applied or made binding is of the same source as the other Commonwealth law.

We say we rely on it, also, when we come to what we have called the “federalising” effect of section 79, as being consistent with this passage, but we say our contention about the requirement for section 79 is consistent with what this Court has said about those words and we submit, respectfully, the direct application theory does not explain that.

GAGELER J:   And, again, the legislation in issue was legislation which conferred power on a court to make a certain sort of order, I think. 

MR HOWARD:   The question of timing and what the matter is I think will also raise a similar issue to the issue your Honour Justice Gageler has been raising with me which is until the prosecution was commenced, in our submission there was not a matter in federal jurisdiction, was there a matter or a controversy?  Yes, there may well have been but I do not understand where that takes – how that assists what is put against us but we will come to that when we deal with the question of timing.  Can I turn to the next point which is our contentions, in our submission, explain how State laws get applied in federal courts and the direct application theory on our submission does not explain how a State statute would be applied by a federal court. 

If a federal court and a State court exercising federal jurisdiction are within the one law area, then in our submission one would expect that State statutes would come to be applied via the same mechanism and our contentions, our submissions would have that result.  But as I alluded to in attempting to answer the questions that your Honours Justice Gordon and Justice Keane posed, unclear how there would be a direct application of State statute in a matter being heard by a federal court.
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           There is no equivalent to covering clause (v) that imposes on a federal court the obligation or duty to apply a State statute.  It links back to what we say is that there must be something from the sovereign authority, we say the Commonwealth Parliament, which would require a federal court to apply a State statute.

GAGELER J:   Does it not come from the State statute being law?

MR HOWARD:   But of another polity.  So that we say it is consistent with – and your Honour the Chief Justice asked me before about complex questions in John Pfeiffer.  The three cases of John Pfeiffer, Blunden and Sweedman all talk about when one is in federal jurisdiction the question is how one ascertains the relevant applicable law and sections 79 and section 80 are looked to to ascertain the applicable law in the exercise of federal jurisdiction.

We know the view now is that one starts with section 80 before one gets to section 79 and section 80 contains the choice of law rules which are applied, but it is consistent with our argument, we say, what is said in John Pfeiffer and Blunden and Sweedman, that when you are in the federal jurisdiction, how the law to be applied is ascertained is through section 79 and section 80.

Now, on the direct application theory, at the very best that would not be a complete statement of how one would ascertain the relevant law and leaves open, we say, the question of how the Federal Court would be obliged to apply the State law.

In this next part of the argument I want to turn to a number of the arguments that are put against us and respond to those.  Can I start with what might be hopefully conveniently referred to as the single composite body of law and your Honours will be familiar with this from the way that his Honour Chief Justice French referred to it in Momcilovic at paragraph 100. At paragraph 100, your Honours will see that his Honour draws an analogy between the direct application and a matter of accrued jurisdiction. His Honour says before the quotation from Professor Zines:

“non‑federal law is part of the single, composite body of law applicable alike to cases determined in the exercise of federal jurisdiction and to cases determined in the exercise of non‑federal jurisdiction.”

That passage comes from the decision in Fencott v Muller and what I want to do is take your Honours to both Fencott v Muller and Felton v Mulligan to try and illuminate where that comes from.  If your Honours have Felton v Mulligan, can I take your Honours to page 392, and I want to identify the passage and then go to what precedes it.  Your Honours will see towards the top of the page in the sentence about four lines down that starts “Mine may be”, his Honour says:

Mine may be an ingenuous view, but to me it seems that the law that a court must apply and administer, in the exercise of whatever jurisdiction pertains to it, may be derived from different sources, but that it is still, so far as any particular case is concerned, a single though composite body of law.

That, if I can just interpose, is the source but it is not a direct quote used in Fencott v Muller at page 607, if I can just make that observation.

KIEFEL CJ:   But is his Honour there referring to the composite as being applicable State laws together with applicable Commonwealth laws? 

MR HOWARD:   I think that is what is put against us, your Honour.

KIEFEL CJ:   Well, why would not one read it that way?  Is that not what Justice Gummow was saying – I am sorry, Chief Justice Gleeson and Justice Gummow in Northern Territory v GPAO at paragraph 80?

MR HOWARD:   Can I come back to GPAO because your Honour asked why would one not read it that way and ‑ ‑ ‑

GORDON J:   It might be because in the middle of the paragraph that is what his Honour says, does he not, a few lines down in Justice Windeyer’s judgment?

MR HOWARD:   It does say what it says but can I take your Honours to the foot of page 391, so this is the lead in to what his Honour says on page 392.  He says:

I have so far left aside the troublesome question that arises when a State court exercises federal jurisdiction with which it has been invested and in the same case exercises jurisdiction that belonged to it as a State court over the same subject matter. 

Then he goes over onto page 392 and says what he says which I have already gone to.  His Honour then, as one goes on, talks about what he had said in Anderson v Eric Anderson about:

an “overlapping” of federal and State jurisdictions. 

Then his Honour refers to, or draws an analogy between law and equity being “two steams of jurisdiction” running “side by side” and then refers to Lorenzo v Carey.  Our submission is that his Honour is referring, particularly when one looks at the foot of page 391, to what has become – it is rejected in that case and is now not accepted – the idea that there could be in the same case and the same matter State and federal jurisdiction being exercised together.

GAGELER J:   That is not a mainstream view, is it?  In the one matter, State and federal jurisdiction could be exercised together. 

MR HOWARD:   That is the point we make, which is we say, with respect, that – and it is rejected in Felton v Mulligan by the Chief Justice and Justice Walsh and it is now not orthodoxy, but we say that is what his Honour Justice Windeyer – that is where he is coming from when he says what he says on page 392.  We make that submission based on the words that his Honour uses. 

It is the lead in because he is talking about the exercise of State and federal jurisdiction at the same time by the same court in the same matter.  We say that is not now orthodoxy, it has been rejected.  But that is why his Honour at 392 is talking about the exercise of whatever jurisdiction pertains to it because he has in contemplation we say with respect the idea of the two being exercised together at the same time. 

The references to what he says in Anderson v Eric Anderson, Ashburner, the analogy with law and equity and Lorenzo v Carey all point, with what he says on page 391, that what is said on 392 comes from a discredited premise, so that ‑ ‑ ‑

KEANE J:   And he rejects it.  He goes on to reject it at 392 and 393.  He says Lorenzo v Carey is difficult and he says it should not be read:

as meaning that a court invested with federal jurisdiction, and adjudicating upon a matter arising directly under a Commonwealth Act, can at the dictation of a litigant declare itself as not bound –

and he reads it down.  He reads what was said in Lorenzo v Carey down in a way that leads him to say what he says on 393:

But once a court is duly seised for adjudication of a matter arising under a Commonwealth law, it seems to me impossible to say that it is not exercising federal jurisdiction.

GORDON J:   The preceding sentence deals with this question of the grant of an authority to adjudicate.

MR HOWARD:   Yes, we accept that, and that is also quoted in Fencott v Muller and by Chief Justice French in Momcilovic.

BELL J:   That is the passage on 393, that:

The existence of federal jurisdiction depends upon the grant of an authority to adjudicate rather than upon the law to be applied –

MR HOWARD:   Yes.  But, with respect, I do  not think – or our submission is not that his Honour – I accept obviously and I must what your Honour Justice Keane has pointed to on page 393, but it is not a rejection of the notion of them being exercised side by side, in our submission, when one reads it with pages 391 and 392.  That notion that his Honour has would explain why one would talk about in the exercise of whatever jurisdiction pertains to it and why there would be a single though composite body of law that the passage relied on.

And as I have alluded to, both Chief Justice Barwick and Justice Walsh – Justice Walsh at page 412 in Fenton v Mulligan rejects the Lorenzo v Carey idea and, as I said, your Honour Justice Gageler said that is now not orthodoxy and one sees that in Edensor at paragraph 7 and also in MZXOT.

The difficulty, in our submission, with that passage, when it is not quoted word for word but is adopted in Fencott v Muller at page  606, in our submission, the difficulty with it, and we say this with great respect, as we must, and we say the same in relation to his Honour Chief Justice French’s adoption of it from Fencott v Muller.  Your Honours will see at Fencott v Muller at the bottom of page 606 onto 607, that the difficulty with the underpinnings of what his Honour Justice Windeyer says are not appreciated when there is the citation or the reference at the top of page 607 to “the single, composite body of law”.

Of course, in Fencott v Muller it was not a question of State statute applying, it was a question of common law applying.  So, one can understand perhaps, and again with respect, why the expression makes sense, the expression used in the joint judgment makes sense when talking about the common law being applied in a federal matter.  But, in our respectful submission, one needs to be careful.  We say there is not a proper basis for the observation made; there is a suspect foundation for the observation made by Chief Justice French in Momcilovic relying on Fencott v Muller, if that is applied to State statutes. 

So, if one takes Fencott v Muller as applying to common law, then it is understandable it applies to statutes as his Honour the Chief Justice French does in Momcilovic.  We say it is a fairly radical extension to what was in Fencott v Muller which, as we say with great respect, rests on suspect foundations.  That is, related to the idea of a single composite body of law is the decision or the judgment of his Honour Justice Kitto in Anderson v Eric Anderson and there is a passage in paragraph 30 – I am sorry at page 30.  Can I identify the passage and then speak to it? 

Your Honours will see the last paragraph starts “The grounds relied upon”.  From the start of that paragraph, if your Honours can come down, there is a sentence that starts within that paragraph “To confer federal jurisdiction” and this is relied on against us by Western Australia, New South Wales and the Commonwealth.  His Honour says:

To confer federal jurisdiction in a class of matters upon a State court is therefore not, if no more be added, to change the law which the court is to enforce in adjudicating upon such matters it is merely to provide a different basis of authority to enforce the same law.

Now, again, we say that that passage understandably is relied on against us.  We say to understand the limits to that one has to understand what it was that Justice Kitto – the argument that Justice Kitto was deciding on and if I can just identify it, the argument that is put for the appellant, the plaintiff, appears on page 29 and the four steps are identified in the last full paragraph on that page. 

GORDON J:   What page was that Mr Howard?

MR HOWARD:   The page before paragraph – page 29.  So, your Honours will recall the case has brought the New South Wales District Court in respect of an accident which happened in the ACT, and the defendant company was found to have been negligent but the plaintiff was also found to be contributorially negligent by the jury.  At that time in New South Wales the common law applied so that contributory negligence was a complete defence.  There was an ACT ordinance at the time which did what more modern statutes do and adjusted the liability, or reduced the liability, but did not provide a full defence.

The argument was made that the matter was in federal jurisdiction, and the fourth point of the argument was that because the matter was in federal jurisdiction, the ACT ordinance had to be applied by the New South Wales District Court.  At the time, the choice of law rule was Phillips v Eyre double‑action ability and at common law, or under that law or under that rule, New South Wales law would have provided the applicable law for the tort.

So, the passage I have taken your Honours to is his Honour’s rejection of the fourth point of the argument; the fourth point being, well, the matter is in federal jurisdiction, therefore, you must apply ACT law and his Honour accepted, at the foot of page 29, for the purposes of argument, the first three propositions but then dealt with the fourth proposition and says, well, merely to confer federal jurisdiction – and his Honour notes on page 30 there is no explanation how the matter being in federal jurisdiction would change the applicable law, and his Honour makes that point forcefully.

So, it is in answer to that question:  if it is in federal jurisdiction, does it change the law to be applied from New South Wales, where the court was sitting, to the ACT?  His Honour says, well, no it does not, but it is response to that particular argument and it makes, with great respect, perfect sense in that context.  It does not of itself support, in our submission, a direct application.  Just to round out the submission, and I do not need to take your Honours to it, but in the joint judgment in John Pfeiffer at paragraph 28, it was said that the matter Anderson v Eric Anderson was held not to be in federal jurisdiction.

Can I turn to the question that your Honour the Chief Justice asked me about the independently existing substantive law and can I take your Honours, I want to take your Honours to both Deputy Commissioner of Taxation and to Edensor ‑ ‑ ‑

BELL J:   Is this, you are going to come back to paragraph 53 in Edensor now, are you?

MR HOWARD:   I will, your Honour.

BELL J:   Yes.

MR HOWARD:   So, I think through the answering of the question, with your Honour Chief Justice, I can go to Deputy Commissioner of Taxation v Richard Walter without going back to the Edensor passage by way of starting.  Can I take your Honours to page 205 in Richard Walter and this is the passage which is approved of in Edensor and which is put against us by at least WA and Victoria.  Starting at the first full paragraph, their Honours are drawing a distinction between the jurisdiction which 75(v) confers and the underlying right.  So, if I can pick it up where the sentence starts “Nonetheless”:

Nonetheless, the right to invoke the jurisdiction is essentially an auxiliary or facultative one in the sense that the jurisdiction which the sub‑section confers upon the Court is to hear and determine the designated matters in accordance with the independently existing substantive law.  In other words, the right to invoke the jurisdiction will be unavailing unless the decision or conduct of the officer of the Commonwealth in respect of which the designated relief is sought is invalid or unlawful under that substantive law.

Further down the page, the judgment talks about the fact that the Commonwealth Parliament might change the independently existing substantive law but it cannot change the jurisdiction under 75(v). That, in our submission, is not talking about State statutes in any way. It may not even be – well, it may or may not be talking about the common law but it is talking about the Commonwealth Parliament’s power to change the underlying law by which any application under section 75(v) must be assessed. In our submission, it does not have anything to do with what is before the Court today.

That is the passage which is approved of in paragraph 55 of Edensor.  And again, in Edensor, what is being spoken about is the matter was in federal jurisdiction because of section 75(iii), ASIC being the Commonwealth, and that is apparent in paragraph 53. The distinction that is being drawn, in our submission, in paragraph 55, the difference between the matter coming into federal jurisdiction because of section 75(iii) – the identity of the Commonwealth – or it coming into federal jurisdiction because of a law made by the Parliament under 76(ii).

GORDON J:   What do we make of the end of the last couple of sentences, or at least the last sentence of 53, on your argument - the last two sentences?

MR HOWARD:   Yes.  That Court is talking there, we would say, about how the matter comes into federal jurisdiction by the identity of the Commonwealth rather than as a law under 76(ii) and it is saying it is a similar situation with 75(iv) which is it might come into federal jurisdiction, not because it is a matter arising under the law of the Commonwealth in 76(ii) but because it is a matter between residents and the diversity jurisdiction. 

One still has to look at if all it is is the identity of the Commonwealth or diversity jurisdiction, one has to look at the law outside of that, so outside of how the matter came into federal jurisdiction.  But, it is not and the case is not, we would say, authority.  One looks to the State statute applying of its own force because, as we have submitted, in Edensor the norm, section 615, only applied through section 79.

GAGELER J:   When you say as we have seen, you say that is paragraph 58, is it?

MR HOWARD:   Yes, your Honour.

GAGELER J:   Because the issue in the case was whether order 7, which relied on sections 737 and 739, was supported by those provisions as picked up by section 79, and they were just about what a court could do.

MR HOWARD: Yes, we accept that, but the point we relied of course is section 615 is the provision that establishes the norm, which is what we relied on in the other part of the argument. So, if it was against what we are putting, then another way that Edensor may have been, or perhaps should have been, resolved is, well, the matter is in federal jurisdiction because the Commonwealth is a party, but section 615 applies of its own force and that is the independently existing substantive law. But that is not, in our submission, how the court dealt with it. So we say, with respect, that that passage is not against our submissions.

It is also put against us – and some of this will cover some territory that we covered previously – that Chapter III does not extend to the making of – Chapter III and the incidental power do not extend to the making of substantive laws.  So, by a process of reduction, if the Commonwealth does not have that power, then it follows there must be direct application of the State law.  I sure it will be put more elegantly than that against us, but crudely that is what is said.  We have answered that in part with the submission about the creation of a federal law area and to say that, in our submission, the incidental power would go so far as to pick up a State law without amendment.

Now, our case is unusual, as I said to your Honour Justice Bell previously, because there are direct analogues in Commonwealth legislation to these offences suggesting that there is a Commonwealth head of power under which section 79 could be given that operation. But, in our submission, the incidental power goes so far as to pick up State laws unamended.

KIEFEL CJ:   Edensor did not involve a substantive law in the way you have discussed earlier in your five examples, though, did it?  It was concerned with the power given by a State Act to a court within jurisdiction.

MR HOWARD:   Would your Honour repeat the question; I am sorry.

KIEFEL CJ:   The question really is:  was not Edensor concerned with the power given by the State Act, the Corporations Law (Vic), to a court to make particular orders with respect to shareholders, rather than the shareholders having a substantive right of the kind that you have referred to earlier in your argument?

MR HOWARD: The case also had to, in our submission, or did involve, in our submission, the norm that was created by section 615. The remedies could not work in a vacuum; the norm had to be picked up as well. We rely on that because ‑ ‑ ‑

KIEFEL CJ:   Yes, I see.

MR HOWARD: Can I turn to the timing of the matter, because much is put against us in relation to this and it, I think, will link back to the discussion that I had with your Honour Justice Gageler. As far as we understand it, what is essentially put is, well, there was a norm created before there was ever an invocation of federal jurisdiction. That was a State norm, again, to put it crudely. Nothing changed so it remained a State norm, and whether it is put as the matter did not change or the offence did not change, and a number of the parties rely on this against us, we accept that, as we must, it was within State power to create the norm, and we have said so in our reply submissions, just as it was within the power of Victoria to enact section 615 in Edensor. 

So, if what is being put is against us is, well, there was a controversy or a potential controversy or a matter before the invocation, and it must be not federal matter but it must be matter shorn of that, before there was the invocation of federal jurisdiction, we would say, yes, but what difference does it make?  And what is put against us is, well, the real controversy is did the appellant contravene the Misuse of Drugs Act in July 2012 and that is well before he is charged and before the invocation of federal jurisdiction. 

I have already alluded to the fact that there could a reverse Momcilovic situation where the offender or alleged offender moves in to the State, is a resident of the State at the time that they are charged, the matter would never come in to federal jurisdiction, and in the discussion with your Honour Justice Bell I referred to how Justice Gummow dealt with it in Momcilovic.

BELL J: To the extent that you have an accused who is from another jurisdiction, your contention is that absent section 79, though the norm may have been breached by that person present in Western Australia engaged in the supply of a commercial quantity of a drug, it would be non‑justiciable absent section 79 in relation to those persons engaged in that behaviour in Western Australia who happened to be resident in another State.

MR HOWARD:   Yes.  I understand it will be said against us – and I think it is probably even worse than it being novel – but, in our submission, that is the outworking of the submissions we make.

BELL J:   That really flows from your paragraph 34 in which you point to what you describe as a consistent line of authority:

that a State law cannot apply of its own force in federal jurisdiction –

by reference to decisions which have not raised this issue.

MR HOWARD:   I accept that.  Of course, those cases are characterised against us as being to do with the conferring, the investing, the defining of jurisdiction.

BELL J:   Indeed.  In your opening submission, you, as I recollect it, drew in aid the same underlying principle as justifying its application in this context.  For my own part, I am having difficulty understanding the underlying principle to which you referred in that context.

MR HOWARD:   We think there is a large degree - that this is common ground that it is beyond the legislative competence of the State to legislate for the exercise of Commonwealth judicial power because it is the judicial power of another polity from a State.  We say that the distinction that is sought to be drawn between those laws and the other laws is not justifiable ‑ ‑ ‑

BELL J:   That is, I think, the difficulty that I am having.  It is one thing to look to the incapacity to confine the power of the Commonwealth Parliament in relation to the exercise of judicial power, judicial power having been invoked to resolve the controversy.  It is what in point of principle supports the view that the controversy created by the breach of the norm in July of whatever year it was cannot be resolved in the exercise of federal jurisdiction without picking ‑ ‑ ‑

MR HOWARD:   Yes, and the two things we say about that – firstly, we draw on those five cases that I have taken the Court through.

BELL J:   I understand that, but I think you have accepted none of them raise this point.

MR HOWARD:   Well, Macleod raises it in the sense that it is a criminal matter in a State court where the State law is said by the Court to apply through section 79.

GAGELER J:   So it is like catch‑22 really.  By invoking federal jurisdiction to resolve controversy about the application of a State law you destroy the application of the State law.

MR HOWARD:   With respect, no, because the State law does get applied by the command of the Commonwealth Parliament.

GAGELER J:   As Commonwealth law.

MR HOWARD:   Yes.  It is a great line that is put against us but, in fact, I expect it does not have substance because the State law does get applied by the Commonwealth Parliament and the catch‑22 that your Honour referred to is what we are talking about now with the question of timing and it is dealt with in Commonwealth v Evans Deakin and it is dealt with in Austral Pacific and it is dealt with in Edensor. 

It is also dealt with in MacLeod without mentioning because in MacLeod it is exactly the same situation.  What is put against us, particularly by the Commonwealth, is that, well, you know, you must have an existing – a court exercising existing federal jurisdiction.  But that is not a problem in MacLeod because the offence is applied by section 79, leave aside whether it becomes federal law, and at the same time that leads to an investing of jurisdiction through section 39. It all happens at the same time.

In Evans Deakin, and we have cited this in our submissions, there is that question of well, how is the Commonwealth sued?  Well, the Commonwealth is only sued because of the Commonwealth’s statute and what was contended for is the Commonwealth says, well, there must be something before the Judiciary Act creates the right.  We have cited the passages particularly in our reply submission where this Court says, well, no, that is not a difficulty that works.

Now, it might appear somewhat arbitrary and it might appear, if one had a blank page, to be not satisfactory but that is the way that the timing issues have been dealt with in Macleod, in Evans Deakin which was then approved of in Austral Pacific.  Your Honours, I note the time.  I have come to the end of the timing point.  Would that be a convenient ‑ ‑ ‑

KIEFEL CJ:   Yes it would, thank you.  The Court will now adjourn until 2.15.

AT 12.42 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.13 PM:

KIEFEL CJ:   Yes, Mr Howard.

MR HOWARD:   May it please the Court. It is put against us in some of the submissions that there is a limitation the operation of section 79 against our contention to be found in the words at the end of the section “in all cases to which they are applicable”. We have dealt with this in our submissions at paragraphs 52 and, I think, 53.

Probably to those passages can I add the references to the decision in Austral Pacific in the joint judgment of the Chief Justice and Justices Gummow and Hayne at paragraph 13 where they give an explanation as to what those words mean and there is also a similar but perhaps more detailed explanation given in Edensor at paragraphs 72 to 74. 

In short, there will be, we accept as we must, some State laws which are just not, because of their nature, capable of being picked up.  A prime example is that which is in Solomons but it, of itself, is not importing the limitation that it is only State statutes conferring, defining and investing jurisdiction which can be picked up.  So we do not accept that the words that appear at the end of the subsection are against our argument and we rely on the explanations given in this Court as to what those words mean.

If, turning to the second leg of the argument, the Court were to accept that there was no direct application of the State statute, the question would remain, what effect or what operation or rather what effect does section 79 have? Principally, not just in the Commonwealth’s submissions against us, but it perhaps is most plain there, essentially what is put, well, you may need section 79 to pick up or apply the State law but it does not change the character of the law applied and there are numerous statements made in this Court to the effect that a State law made applicable by a federal law operates as a federal law.

We have, in our submissions at paragraph 54, referred to the passages that appear in Mok, especially at paragraph [35] in the judgment of Chief Justice French and your Honour Justice Bell and also in similar effect in the judgment of your Honour Justice Gordon at paragraph [84], where particularly in the joint judgment of the Chief Justice and your Honour Justice Bell, it is said that:

There is a variety of verbal formulae by which Commonwealth laws give effect to State laws as laws of the Commonwealth. 

We accept obviously Mok is dealing with Service and Execution of Process Act but the statements made included the Commonwealth Places Act, Service and Execution Process Act and section 79.

That was also, albeit in a different statutory context, the decision of Ruhani v Director of Police where the Commonwealth statute was the Nauru (High Court Appeals) Act and it was held that it had the effect of applying the law of Nauru as federal law.

If I can give your Honours the references ‑ I do not need to take the Court to the particular passages ‑ your Honours will see in the judgment of his Honour Justice McHugh at paragraphs 66, 70 and 73, also in the joint judgment of their Honours Justices Gummow and Hayne at paragraph 113 and in the joint judgment of their Honours Justices Callinan and Heydon at paragraph 273. Each of those is made we accept - statements in Mok purport to apply not just to the Service and Execution of Process Act but we understand that it may be said those statements are made in cases where there was a particular law of the Commonwealth such as Service and Execution of Process Act or the Nauru Act which one can point to an express head of power and therefore the statements ought not to be taken to mean what they appear to say.

In our submission, the reasoning behind those statements applies equally to laws which are applied or made binding by section 79. In the context of section 79, we would point to the judgment in Edensor of Justice McHugh at paragraph 130 where that point is made in the context of sections 64 and 79 of the Judiciary Act.  The paragraph at 130 goes across pages 609 to 610 and the passage we particularly rely on is on page 610, where his Honour says:

State laws will be applicable as federal laws –

by the operation of section 64 and section 79. Similarly, in Parker v The Commonwealth, which I took your Honours to previously and I read the passage earlier - I am not going to re‑read it - but his Honour Justice Windeyer makes the same point in relation to sections 79 and 80 that they make the State law applicable as federal law.

There are also statements which we have referred to – there is a statement in the Re Colina Case which we have referred to in our reply at paragraph 10 where we cite in the judgment of his Honour Justice McHugh at paragraph 38 – and I do not propose to specifically take your Honours to it.

GAGELER J:   Mr Howard, there are statements all over the place ‑ ‑ ‑

MR HOWARD:   Yes.

GAGELER J:   ‑ ‑ ‑ in this area of law. But for this proposition, is there any case that actually turns on the proposition of a State law that is picked up by section 79 being picked up and operating as a federal law?

MR HOWARD:   Only – well, the short answer is directly no, your Honour, except for the statement that we have already taken the Court to in GPAO about what the consequence would be when one comes to looking at what “otherwise provided” means in section 79.

GAGELER J:   You only get to the GPAO view by the law being picked up, being picked up as a federal law.

MR HOWARD:   That is right.  Now, what is said against us – lots of things are said against us but in this point, two things essentially.  One is a question of power.  We have spoken about that and I do not think I will revisit that other than while your Honours have Edensor open at page 610, and I do not think I mentioned this to the Court before and if I did my apologies for the repetition, but the question of power is alluded to by his Honour Justice McHugh at the top of page 610 where his Honour says in the first sentence:

But where the Commonwealth or a State is a party to the proceedings, there would seem to be no limit to the State laws that the Parliament can make applicable in those proceedings.

The footnote 184 then refers to sections 75(iii) and 58(xxxix) and also section 78. Now, obviously, section 78 is not relevant to us and we are in section 75(iv) rather than section 75(iii) but there is some indication that his Honour saw the power coming from that – those places within the Constitution.

I do not want to take that too far because obviously it is dealing with the Commonwealth in 75(iii) rather than diversity of jurisdiction in 75(iv).  But our argument, as I sought to put it before, is quite limited for our purposes about how far the power needs to go, and we do not contend for an open‑ended power, if I can call it that, which will allow the Commonwealth to legislate for all matters within diversity jurisdiction.  We have contended for a narrower scope of power under the incidental power.

The second point after power that is put against us for the federalising effect of section 79 is that this will make a mess of the Judiciary Act, in particular Part X. It is said I think by the Commonwealth, Western Australia and South Australia that our interpretation has rendered Part X, which contains section 68, otiose. There is a problem with the way we deal with it in our reply. In our reply at paragraph 22, we said that there was no reason why section 68 and section 79 – or why section 79 could not provide the trigger for the operation of section 68. I do not have to say, with respect, that that is wrong on the authority of Macleod and to say we do not press it would seem almost churlish.

Can I then deal with what Macleod says?  Because it actually sheds a lot of light, we say, on how this is to work, and I am dealing now essentially with the interpretation argument of the Judiciary Act, which is put against us.

As I went to before, the Court did spend some time in Macleod, even though it was not at the point of the decision, so to speak, explaining how section 79 and section 68 worked. The points that come out of particularly paragraphs 8 and 9 on pages 292 over to 293 is that Mr Macleod, as would be the case for Mr Rizeq, was not charged under a law of the Commonwealth as that is understood in section 68.

Section 68, the joint judgment says, is where there is a law made directly under another law of the Commonwealth that is made directly. It does not apply where an offence or a State provision is picked up. Rather, the Court says where it is picked up under section 79 the investing happens via section 39(2).

The significance of that is that where the law is being picked up, the machinery provisions are not being picked up by section 68 either; they are being picked up through section 79. In that respect, if that is correct, then Part X, which has section 68, and Part XI, which has section 79, are both needed because section 68 is not going to apply to offences which are picked up through section 79.

In our interpretation that does not render Part X otiose.  It shows or it is consistent with, with respect, what the joint judgment says in Macleod about how section 68 and section 79 both work. There is an interesting point that at least for me was obscured because with the modern convention in the statues of having divisions, et cetera, rather than just the parts, when one looks at the Judiciary Act as passed, it is very obvious there are two sections which are headed “Application of laws”. There is section 68 and there is section 69, and it suggests that the drafters thought that there was a need to have both, and Macleod gives an explanation as to why it was needed to have both, because section 68 by itself would not apply to an offence picked up through section 79.

I have already made mention of the other interpretation questions that come out of MacLeod which, we say, assist our contentions. The first is that it picks up a criminal law and applies it to a person, notwithstanding that section 79 talks about it being binding on a court. There is no suggestion, we say, of the State Act applying of its own force, and the timing question, if I can call it that which is put against us particularly by the Commonwealth, is not of concern or it does not trouble the Court when it is explaining how section 79 and section 39 work. The federalising effect, I have already mentioned, I think, we say, is particularly clear in what the Court says about “otherwise provided” in section 79.

I turn to the last point which is, as we understand it, it is put that even if section 79 is needed, even if it federalises the State law, as we apprehend it from the submissions of WA, the Commonwealth and Tasmania, it is said that it may be a federal law but it is not a law of the Commonwealth within section 80, so that we would not get to the constitutional guarantee. Our submission, of course, is that if the Court accepts the first two steps then we suggest, with respect, the third ought to follow and it would be right for it to follow.

In Re Colina, there was a question, of course, about whether section 80 – the guarantee in section 80 applied. The Court split on the judges who considered that the Court split 2-2 as to whether the contempt arose out of the Constitution, Chapter III, or whether it arose out of the statute. But at paragraph 25, even though their Honours the Chief Justice and Justice Gummow took the view that contempt arising out of Chapter III was not within law of the Commonwealth in section 80, at paragraph 25 on page 397, their Honours used in about the middle of the paragraph:

The term “law of the Commonwealth” refers to laws made under the legislative powers of the Commonwealth.

It was, in our submission, in the context, we would say saying that if a law is made under legislative powers it is not necessarily a law made under section 76(ii), it would include a law made under – a law picked up under section 79, and we say that in Justice McHugh’s judgment at paragraph 45 that – and I think his Honour Justice Callinan agreed with Justice McHugh on that point, that the law of the Commonwealth is simply a law made under or by the authority of the Commonwealth Parliament and we say that would occur through section 79.

That idea has been accepted in statements made in Pinkstone and in Mok.  We have given the references in our submissions and neither of those cases turned on the section 80 guarantee.  But if it is accepted that where a Commonwealth statute such as Commonwealth Places or Service and Execution of Process Act makes a State statute binding, then the section 80 guarantee applies. The question arises, why would it not then apply to a law made binding through section 79? And the answer to that might be that they have expressed heads of power. But what that would do is create, in effect, a hierarchy of federal laws where a valid law made under an express power attracts the constitutional guarantee but an equally valid law made under the incidental power would not attract the constitutional guarantee.

BELL J:   When one speaks of the “constitutional guarantee”, it is a guarantee that it has been recognised it is within the power of the Commonwealth by determining whether an offence against the law of the Commonwealth will be tried on indictment to either extend the guarantee or, if you like, withhold it.  On this analysis, those discussions that informed the final terms of section 80 of the Convention go out the window.  It is not the Commonwealth Parliament determining that critical question.

MR HOWARD:   It is, though, the Commonwealth determining it by picking the law up.  It is still by the operation of the Commonwealth law. 

BELL J:   The Commonwealth is making – by Commonwealth law, the State offence is picked up.

MR HOWARD:  

Yes.

BELL J:   But, to the extent – if one goes to the history – that there was consideration of a capacity to determine those offences that would be triable on indictment and those that would not, the Commonwealth is indiscriminate in picking up everything as it applies in the State law.

MR HOWARD: It makes that decision via section 79, we would say. But I accept the point that your Honour is making.

BELL J:   Yes, and necessarily, although Justice Gummow was speaking in Momcilovic with relation to section 109, your argument – well, his Honour’s argument, one would think, would apply equally to section 80.

There may be a difference - and the point was, I mentioned previously, because of the order that one approaches these things from the Agtrack decision, amongst others, there may not be the same meaning or there would not be the same meaning of “law of the Commonwealth” in section 109 as “any law of the Commonwealth” in section 80 because - and there is a slight difference of language used, but it would not then have the same meaning because one has to determine if there is inconsistency with the law of the Commonwealth under section 109 that, we would say, must refer to laws made under section 76(ii) or some other express head ‑ ‑ ‑

BELL J:   Yes, I see, yes.

MR HOWARD:   ‑ ‑ ‑ but section 80 is, we would say, broader because we would say section 80 - we must say section 80 encompasses and we do say section 80 encompasses laws picked up.  May it please the Court, they are the submissions for the applicant.

KIEFEL CJ:   Thank you, Mr Howard.  Yes, Mr Quinlan.

MR QUINLAN:   If the Court pleases.  If I can commence with what my learned friend identified as the crucial plank of their submissions which is the proposition that State criminal laws do not apply of their own force in matters that may be tried in federal jurisdiction, which is the proposition that we deal with in the first two paragraphs of our outline of oral argument.

We say, in our respectful submission, there is no such constitutional principle and that, for reasons I will come to in a moment, such a proposition would be quite inconsistent, not only with the constitutional provisions in relation to Chapter III but also in relation to the continuation of the former Australian colonies as States of the new Federation with a continued and enduring Constitution, Parliament and laws in accordance with sections 106 to 108 of the Constitution.

In our respectful submission, one begins from the proposition that the State law in this case, section 6 of the Misuse of Drugs Act, applied according to its tenor to all persons within the limits of the State.  We would leave aside, because they are not relevant to this case, questions of extraterritorial operation of laws - that a Commonwealth enactment was in no way and in no circumstances necessary to give effect to such a law.

It was a law within the legislative power of the State and applied to all persons within the State. In our respectful submission, the Commonwealth Constitution does not, in effect, have a disapplying effect on State laws simply by reason of the fact that this Court and other courts may be invested with federal jurisdiction to hear matters that arise in relation to them.

The effect of the appellant’s primary proposition is that no State law may apply in federal jurisdiction would suggest, as has been accepted by my learned friend, that in the absence of section 79 there would be a legal vacuum in relation to all valid laws of the State in federal diversity suits where no laws could apply of their own force.

We say that that does not and could not flow from the provisions of the Constitution. Indeed, in our respectful submission, it would be a very odd federation were the States who had existing legislative power in relation to the conduct of all persons within the States to prescribe criminal laws would have to await Commonwealth approval of its laws in order for them to operate in courts trying persons from other States.

That would be inconsistent, in our respectful submission, with the continued legislative power of the States to create laws that operate according to their tenor.  Insofar as there is one law area that covers the Commonwealth, it is a law area which is made up of Commonwealth laws, State laws, the common law, and, indeed, as Justice Kitto referred to in Felton v Mulligan, some imperial statutes that still have application.  They are laws which are and continue in effect and are the laws upon which the disputes of persons who come before both federal courts and State courts where there is a pure State jurisdiction are to be determined.

In our respectful submission, that naturally flows from section 75(iv) of the Constitution itself. The Constitution specifically confers upon this Court the original jurisdiction to determine disputes:

between residents of different States, or between a State and a resident of another State.

By investing this Court with that diversity jurisdiction and, in our respectful submission, the Constitution proceeds upon the basis that there will relevantly be a system of law to determine that controversy and it does not have to await the passage of new Commonwealth laws in order to provide that body of law.

It is for the same reason, in our respectful submission, that is identified in Fencott v Muller for the existence of a crude jurisdiction that that is the case. If it were otherwise, the judicial power conferred by section 75(iv) would be insufficient to accomplish the purpose of the judicial power of the Commonwealth quelling disputes between States and residents of other States. That is why ‑ ‑ ‑

GAGELER J:   Without section 39 of the Judiciary Act this would not have been in federal – this prosecution in a State court would not have been in federal jurisdiction, I think.

MR QUINLAN: It would not have been within exclusive federal jurisdiction, that the cases that we have referred to in our outline are to the effect that prior to the passage of section 39 the State judicial power would have extended to a diversity matter. It would not have been federal diversity jurisdiction but a dispute between a resident of the colony of Victoria and the colony of Western Australia in relation to events in Western Australia or a prosecution of an interstate resident in Western Australia would have formed an ordinary part of the jurisdiction of the State judicature and the judicial power given by the State Constitution.

That is one of the areas of judicial power which, in accordance with section 77(iii), would have belonged to the State. The effect of section 39 was to, on the one hand, make all such jurisdiction exclusively federal jurisdiction in section 39(1) and then in 39(2), give it back to the State courts as federal jurisdiction. So, it is the case that the double effect of subsections (1) and (2) of 39 was to remove what would otherwise have been within the jurisdiction of a State.

We have mentioned, of course, criminal matters but I think in relation to – there is also discussion in our outline of submissions at paragraphs 34 and 35 by reference to – and it is in footnote 16 – your Honours will see the reference to MZXOT and to Baxter where there is the discussion of the fact that there were certain matters which would previously have been both able to be the subject of federal jurisdiction and State jurisdiction but which were all made exclusive by section 39(1).

GAGELER J:   Thank you.

MR QUINLAN: Our submission in relation to that starting point of the operation of the Constitution that it contemplates laws of - the composite body of Commonwealth laws, State laws, the Commonwealth, common law and, indeed, imperial statutes is why section 79 has been described and was described, for example, by the Chief Justice, Justice Gleeson, Justices Gaudron and Gummow in Edensor as implementing or being consistent with what Chapter III would have done in any event.

So that the starting point, in our respectful submission, is that in a federal constitutional structure where the laws of the State are expressly saved and continued in force within the State, the laws of the State continue to operate regardless of the source of authority to adjudicate in relation to matters that arise under them. 

We go on to distinguish that from what our learned friends have correctly identified as the position we take in relation to the limitation on State legislative power which is simply that which flows from Chapter III of the Constitution, that is, that the States cannot apply of their own force in federal jurisdiction laws which fall within the exclusive legislative powers contained in Chapter III.

Can I take your Honours to the decision in APLA which we have referred to - at 224 CLR 322 which is the passage my learned friend referred to but if I can take your Honours to it because it provides, in our respectful submission, appropriate framing for observations that are made in relation to other cases concerning section 79 in particular. His Honour’s discussion in relation to Chapter III begins at page 404 on paragraph 222 and on page 406 is the relevant paragraph, paragraph 230. Importantly, his Honour commences by recognising:

the exclusivity of the powers of the Parliament with respect to the conferring, defining and investing of federal jurisdiction –

and his Honour refers to the provisions:

has the consequence, well recognised in the authorities that the laws of a State with respect to limitation of actions and other matters of substantive and procedural law which are “picked up” by s 79 of the Judiciary Act, could not directly and of their own force operate in the exercise of federal jurisdiction.

His Honour importantly goes on:

This generally results from an absence of State legislative power rather than the operation of s 109 of the Constitution with respect to the exercise of concurrent powers.

So, importantly, his Honour is identifying the particular matter which causes certain laws of the State not to be able to apply directly.  That passage, in our respectful submission, where his Honour refers to “limitation of actions” and other matters of substantive and procedural law does not mean all laws of substance but those which meet the description in the opening words of his Honour’s conclusion, that is, the exclusivity of powers of the Parliament with respect to conferring, defining and investing.

Now, that does flow, in our respectful submission, and my learned friend has – I should add in relation to that, that is similar to the point – I need not take your Honours to it but the point made by your Honours Justices Nettle and Gordon in Alqudsi 90 ALJR 711 at paragraph 171 that it is for:

the Commonwealth Parliament to provide for and regulate the exercise of federal jurisdiction -

that is, the kinds of matters referred to by his Honour Justice Gummow in APLA and which are contemplated by section 79 of the Judiciary Act.  It is of some significance in the text of the Act, it refers to the laws to which it speaks being binding on courts, binding on them in the exercise of federal jurisdiction or exercising federal jurisdiction and it specifically refers to particular kinds of laws that he contemplates, laws relating to procedure, evidence and the competency of the witnesses. 

Of course, it is not limited to those matters but those matters are identifying the kinds of laws which are concerned with the regulation and exercise of judicial power, not, we would submit, the independently existing substantive law that may come to be applied in federal jurisdiction.  In our respectful submission, the test of that is that the exclusive federal legislative power referred to by his Honour Justice Gummow does not extend to all the laws that regulate the substantive rights and interests that may fall to be determined in federal jurisdiction, including all of the rights and interests between residents of different States and the criminal liability of interstate residents.

That is, as the Commonwealth submits, and importantly, as the Commonwealth submits, as the Commonwealth disavows the extent of legislative power which the appellant attributes to it.  The Commonwealth simply does not have plenary legislative power, let alone exclusive legislative power to regulate all of the substantive rights and interests that may fall to be determined in federal jurisdiction. 

That very notion, in our respectful submission, is inconsistent with the confined legislative powers conferred by sections 51 and 52 and section 51(xxxix) does not, in effect, mean that there is a head of power, for example, that says that the Commonwealth may make laws with respect to the rights between persons of different States, full stop, which is the effect of our learned friend’s submission as to the reach of the incidental power.

Now, that is, in our respectful submission, to be contrasted with laws of the Commonwealth which do validly incorporate some other text emanating from outside the Parliament, whether it be the law of a State or some other text, as being the content of a Commonwealth law made within power. 

In all of those cases, and that is why, in our respectful submission, it is important that each of the areas where there has been a description of a Commonwealth law applying or picking up or adapting State laws must be seen in the particular legislative or constitutional context in which it arises, in all of those cases where it does so, it must nevertheless have legislative power with respect to the text which it is picking up because in each of those cases where it does so, where it picks up or incorporates by reference a text from somewhere else, it is as if the Commonwealth were setting out word for word what appears in the external text.

So it must have had legislative power to legislate in that way if it is able to do it by incorporating by reference and in some instances the connection may be quite clear as when the Commonwealth incorporates provisions from another text - it could be another State law, it could be a different volume of laws - to be the law in a new and distinct place such as a Commonwealth place or over a new subject matter about which it has legislative power, such as service and execution of process or matrimonial causes or a matter of that kind.

Where the incorporation of the text is within the metes and bounds of a particular head of power, it is easy to see that that incorporation by reference will be effective.  But it does mean and it does follow, in our respectful submission, that the Commonwealth will only have power to do that where it would have had power to enact the external text. 

For that reason, in our respectful submission, there is no basis for the distinction drawn in the appellant’s reply to my learned friend’s submissions today to the effect that the Commonwealth has power to enact as Commonwealth law the unamended text of a State statute but not an amended version.  Either the Commonwealth has legislative power to enact Commonwealth laws in relation to all of the substantive rights of persons that may arise in federal jurisdiction or it does not.  In our respectful submission, for the reasons set out in our submissions and in the Commonwealth submissions, it does not.

Can I turn then to section 79 itself which is paragraph 6 and following of our outline of oral argument and particularly to the proposition in paragraph 7 which picks up one of the authorities that my learned friend refers to in their paragraph 34 as being authority for the proposition that State laws cannot apply of their own force in federal jurisdiction. The submission we make about that is that is a subset of State laws. The ones which we have identified from Justice Gummow’s judgment in APLA with respect to conferring, defining or investing a federal jurisdiction and that is reflected, as I have said, in the text of section 79.

Can I take your Honours to Solomons v District Court (NSW) at page 134 of 211 CLR.  This is the joint judgment of his Honour the Chief Justice Gleeson, Justices Gaudron, Gummow, Hayne and Callinan and the relevant passage begins at paragraph 21, page 134 and this is the passage, we understand, that our learned friends rely upon:

It is well settled, despite a contrary disposition apparent in some of the appellant’s submissions, that State laws upon which s 79 operates do not thereby apply of their own force in the exercise of federal jurisdiction.

The critical words we emphasise in that sentence are “upon which”, that is, it is identifying the laws upon which section 79 will operate. It is the laws which apply – cannot apply of their own force in the exercise of federal jurisdiction, i.e. the laws of the description identified by his Honour Justice Gummow in APLA.

The converse applies as well of that proposition. It necessarily follows that laws which are able to apply of their own force in the exercise of federal jurisdiction are not laws upon which section 79 operates. That is consistent with, as their Honours go on, in identifying the limitations in the text of section 79 in paragraph 23 – and I have already referred to those – that is:

only where there is already a court “exercising federal jurisdiction”, “exercising” being used in the present continuous tense.

So, it is concerned with matters going to the process and authority of adjudication and that it is addressed only to courts and then the third limitation which is not presently relevant. 

The previous cases relied upon by our learned friends, as we say in paragraph 8 of our outline, are all properly to be understood as laws dealing with something arising in the course of judicial power or something properly incidental to the investing or exercise of judicial power.  Some of them are, in effect, choice of law cases in civil suits – for example, Parker’s Case which does refer to section 79. But Justice Windeyer in Parker’s Case also – and, in fact, the first basis that he gave for the application of Victorian law in that case which was not in dispute, was the rules of private international law.

That is important in the context of this case because in whatever jurisdiction is being exercised in a civil case, in a civil cause of action, questions of choice of law might arise because of the events in question and the locations of the parties.  So there may always be a question in civil jurisdiction as to what is the substantive law to apply in any system of law – in a unitary system or in a federal system. 

That is not the case with criminal laws.  If I can just give one reference without needing to take your Honours to it – in Lipohar – Lipohar v The Queen 200 CLR 485, their Honours Justices Gaudron, Gummow and Hayne draw the distinction at paragraphs 105 and 106 between common law rules of private international law which apply to civil causes of action which by their nature are transitory and criminal laws which their Honours say stand apart because criminal laws are concerned with the conduct of persons in the place to which the law applies and the adjudication of the breach or otherwise with that conduct.

The choice of law cases, in our respectful submission, are not ones which would have any relevant bearing in relation to whether or not it is possible that section 79 can be construed as having created offences against the laws of the Commonwealth.

GAGELER J:   But can I just understand that submission a little more? You accept that section 79 can operate to…..choice of law provisions.

MR QUINLAN:   In fact, it is section 80 which is concerned with choice of law provisions as we understand it.

GAGELER J:   So, you say section 79 is not addressed to a choice of law.

MR QUINLAN: Section 79 does not need to. Section 80 will deal with choice of law.

GAGELER J:   I see.  Thank you.

MR QUINLAN:   But the important point we make about that is that there is nothing startling about, in a civil cause of action, a court needing to determine what the relevant substantive law to apply is, whereas criminal laws operate quite differently.  The next authority that our learned friends took your Honours to was Macleod and in fact, in our respectful submission, the authority is authority for the opposite of the proposition that is being advanced by our learned friends, Macleod being at 211 CLR 287. Your Honours will recall that my learned friend took your Honours to paragraph 1, which identified the relevant law under which the offences were instituted and their Honours at the end of paragraph 1 said:

The offences in question thus were offences against the law of Western Australia.

Their Honours then went on to deal under the heading “Federal Jurisdiction” on paragraph 4 and following.  The first relevant paragraph we would rely upon is paragraph 6 where their Honours identify the nine heads of matters which fall within federal jurisdiction and halfway down that paragraph, their Honours said:

In the proceeding in the Court of Petty Sessions, the identity of the ASC as the complainant attracted the exercise by that Court of federal jurisdiction; the liability sought to be established in the proceeding, and the substantive content of the “matter” within the head of s 75(iii) was the determination of liability for contravention of certain laws of Western Australia and the imposition of penalties if liability was established.

That, in my respectful submission, is their Honours clearly identifying that the independently existing substantive law in relation to which federal jurisdiction was engaged not by reason of the character of the law but by reason of the identity of the parties was a contravention of State law.  That is made clear in paragraph 8 where their Honours say:

In the present case, it is important to bear in mind, as already mentioned, that Mr Macleod was charged with offences against State law. He was not charged with offences against “the laws of the Commonwealth”, the expression upon which turns the investment of State courts with jurisdiction by s 68(2) -

We submit in relation to that, that is not, as our learned friends contend, suggesting that there is some difference between “laws of the Commonwealth” within the meaning of section 68 and “laws of the Commonwealth” within the meaning of section 80 of the Constitution or between a surrogate law under section 79 and a “law of the Commonwealth” within the meaning of section 68.

It is simply saying precisely what it says – that is, that the charge, the trial and the conviction of Mr Macleod was not for offences against the law of the Commonwealth; it was and always remained offences against the law of a State. Again, that is manifest by the opening words of paragraph 9:

In the present case, the investment of federal jurisdiction is supported by s 77(iii) in combination, not with s 76(ii), but with s 75(iii) of the Constitution.

Now, the reference to picking up State laws, it is apparent that paragraph 10, it does not refer to the offence‑creating provision in that paragraph. The State law to be picked up that is being referred to, the area of dispute in that case was whether in this trial for a contravention of the law of a State was in effect the adjectival law granting rights of appeal something upon which ASIC could avail itself.

So what their Honours go on to identify in relation to section 79 was that it could not, as it were, be picked up and applied to confer upon ASIC the right of appeal which it claimed. That appears at page 296 of their Honours’ judgment at paragraphs 21 through to 23 and I do not read that but just simply identify that, that the area of controversy in that case was, was section 206A(2) of the State Justices Act a provision in relation to appellate rights, something that was picked up by section 79, not that the charge had already been picked up by section 79. Their Honours, with respect, disavow that in paragraph 8 of the judgment itself.

Your Honours, the other case that your Honours were taken in that regard was Australian Securities and Investment Commission v Edensor (2001) 204 CLR 559.  I will take your Honours to some of the passages in a moment but before doing that, can I just broadly say this about the decision;   this is developed to some extent in the Commonwealth’s written submissions as well. 

It is important to identify precisely upon what that case turned and what it was concerned with and significantly, in our respectful submission, what it was not concerned with.  The judgment of his Honour Justice McHugh in Edensor’s Case is, we would accept, the highest that reasons for decision go in suggesting some form of entire adoption of State statute law.

We say to the extent that his Honour goes that far in Edensor’s Case, one, that should not be accepted, that is that the extent of legislative power which his Honour posits in that case as to the breadth of what could be made under the incidental power should not be accepted and in any event, it was unnecessary for the purposes of the decision.

It was not an issue in that case, in our respectful submission, as to whether or not, when it was alleged that Edensor and the other respondents were in breach of section 615 of the Corporations Law at the time that they issued the relevant prospectus, that section 615 could only be applied or could only be adjudicated upon, is probably the better word, by the Federal Court by reason of section 79. That was not an issue in that case.

Can I take your Honours then very briefly to the passages that bear that out? Your Honours will see in the joint judgment of Chief Justice Gleeson and Justices Gaudron and Gummow on page 574 of the report the relevant passage set out – that is, section 615 and the prohibitions contained in the State Corporations Law which were alleged by ASIC to have been contravened, and they were, not unlike a State criminal law, a law which proscribed certain conduct when it was engaged in by persons in relation to the acquisition of shares.  The finding that was then made by his Honour Justice Merkel in the trial, your Honours will see on page 576 at paragraph 26 that his Honour made various orders and declarations.  They:

included a declaration of contravention of s 615 by entry into the Shareholders Agreement (order 1) and a declaration of contravention of s 615 by [the companies] by reason of their entry into the informal arrangements –

Those declarations that what had occurred was a contravention of State law were not the matter that was the subject of challenge or the matter of the controversy.  The matter of controversy was order 7 which was the remedial order that was made, and the remedial order that was made was made pursuant to what was said to be the provisions of section 737 and 739 of the Corporations Law, which were provisions that said that the Court may make orders of a certain kind where certain events had occurred, or where certain contraventions had occurred.

There was no issue raised in the proceedings as to the manner in which section 615 of the Corporations Law operated in relation to the appellants and again, as in Macleod’s Case, federal jurisdiction was engaged not by section 76(ii) but by section 75(iii) on the basis that ASIC was the Commonwealth, and that appears at page 586, paragraph 53 onto paragraph 54. So paragraph 53, which is a passage that the Court were taken to earlier today, that section 75(iii):

may be a sufficient animating circumstance without any federal law supplying the substantive rights and liabilities which are tendered for adjudication. 

And their Honours identify that that was the nature of the proceeding in that case because the moving party was relevantly the Commonwealth, which is at 54.  The substance of the dispute in relation to that was whether there had been a contravention of 615 of the Corporations Law which appears in 56.

KIEFEL CJ:   Do paragraphs 57 and 58 of Edensor support your argument?

MR QUINLAN: Paragraph 57 supports the proposition that the independently existing substantive law was section 615. There is an identification in paragraph 58 as to – and these, in our respectful submission, are strictly obiter comments for the purposes of the case in paragraph 58. The reference to 615 rather suggests, as the Commonwealth puts it, that section 79 if it applied had the – what might be called the directing function rather than the re‑enacting function, that is, directing where the Court shall go for the substantive law. There is no suggestion in their Honours’ reasons that the character of section 615 went from being a State law to being breach of a Commonwealth law.

GAGELER J:   How does the Commonwealth’s argument fit with your argument, this idea of directing one to another body of law?

MR QUINLAN:   I will not seek to verbal my learned friend, the Solicitor for the Commonwealth, but the proposition that we make is, as with Solomons’ Case, if the State law is a law capable of applying directly, section 79 does not operate on it to convert it into a federal law.

GAGELER J:   If it is not capable of applying directly and falls within the scope of section 79, it is picked up and applied as federal law in your submission.

MR QUINLAN:   Yes.

EDELMAN J:   But at 44 in your submissions you have an intermediate point where you, I think, suggest that 79 can operate in a declaratory way.

MR QUINLAN: Yes, that should not be understood to be anything other than to say that insofar as it does not operate to create a new federal law, if it were regarded as – to use the expression that is sometimes found in the cases “pointing where to go” or “directing where to go” for the federal law, that would simply be declaratory of what the Constitution by Chapter III produces in any event, that is, a body of substantive law made up of the relevant State or the relevant common law, the relevant Commonwealth ‑ ‑ ‑

GAGELER J:   Just to go back one step, I am sorry to keep harping on this but it is really quite important, do you say that the area of State legislative incompetence is coincident with the scope of section 79 or does section 79 go further, in any way, than just plugging that gap in State legislative power?

MR QUINLAN:   We would say that it goes no further than plugging that gap.  It is a relatively modest provision, in that respect.

EDELMAN J:   It must go slightly further if it is declaratory or if it has a direct effect?

MR QUINLAN:   Yes, and that is why it is not essential to our argument that it has a declaratory effect in relation to other laws, but that would be all it did.  If it has any effect beyond that and that is really because the laws which apply their own force are already binding on the courts in that sense.  They are laws of a State of the Federation which apply and are to be applied by the Court in the exercise of federal jurisdiction. 

Can I just complete the references in Edensor to the provisions that were actually the subject of dispute?  They are set out in paragraph 61 on page 589 which are sections 737 and 739 and the conclusions reached by their Honours in relation to the resolution of that dispute can be found in the judgment of the Chief Justice and Justices Gaudron and Gummow on paragraph 99 on page 599 which makes clear that the thrust of the attack was directed to the exercise by the Federal Court of power derived under section 737 and 739 of the Corporations Law and their Honours Justices Hayne and Callinan in their concurring judgment at page 639 similarly focus entirely upon those two provisions conferring powers on the Court. 

As I indicated, Justice McHugh did explicitly refer to section 615 as operating as federal law but, as I have indicated, that was not a matter that was necessary or essential for the case and that is indeed reflected in his Honour’s – towards the end of his Honour’s reasons at page 614 that at paragraphs 144 and 145 his Honour - and then concluding at paragraph 146 his Honour returns to the provisions that were, in fact, in issue in that case, the two powers provisions.

Your Honours, I have already addressed to some extent and I need not go to the cases, the purpose of section 79 being to implement what, in any event, would flow from the operation of Chapter III itself and then make the point as I did in response to your Honour Justice Gageler that the objective is a relatively modest one in intending to facilitate the exercise of jurisdiction by whatever court may be invested with it.

In fact, the selection of the courts of the law of the relevant State reflects, in our respectful submission, the use of the autochthonous expedient that it would likely be State courts that would be adjudicating in that federal jurisdiction. It would be possible for the Commonwealth, in our respectful submission, under the incidental power, to as it were write a code as to all of the law to be applied in relation to the adjudication process – a Commonwealth Procedure Act and Evidence Act and the like to be applied in the exercise of federal jurisdiction, but that is not what it has chosen to do for the most part and section 79 is providing that – the plugging of a gap which might otherwise arise and require the Court to draw upon perhaps the implied power that there would be under Chapter III to regulate the process of the judicial power of the Commonwealth in any event.

We do say, though, going onto paragraphs 10 and 11, that it goes well beyond the reach of section 79 to ascribe an intention to enact as Commonwealth law offences in relation to conduct by interstate residents, or by persons who happen to be interstate residents at the time proceedings are commenced.

We say in that respect, and this goes to the issue of timing that my learned friend referred to, that it is unavoidable, in our respectful submission, that the appellant’s position entails the conclusion that what is created by section 79 on his case is a retroactive criminal law that creates a new criminal liability, the conduct committed prior to that liability.

That cannot be – that conclusion cannot be avoided, and we have noted there – I will not take your Honours to it but we provided some copies of parts of Chapter 2 of the Criminal Code (Cth) and Part IB of the Crimes Act – the fact that there is a regime under both of those sets of provisions in relation to principles of criminal responsibility in relation to sentencing, in relation to parole orders which apply to offences against laws of the Commonwealth.

Now, if the appellant’s construction is correct and that what he was tried for here was an offence against a law of the Commonwealth within the meaning of section 80 of the Constitution, in our respectful submission, it is unavoidable that that is a meaning that flows through the rest of the Commonwealth statutory scheme which fixes upon laws of that kind.

Now, we say apart from issues of constitutional power which we have addressed, there would need to be a clear statement of legislative intention before that result could be drawn from section 79, particularly given that, as we note – and as was referred to in exchange this morning – federal jurisdiction may be engaged at any time during a proceeding.

Your Honour Justice Bell referred to the possibility of a person moving interstate during a long trial. Your Honour Justice Gageler referred to a section 109 point may be raised in the middle of a trial, and there are a variety of others. It may be that in the course of a trial there is an evidential issue in relation to some recordings from the Commonwealth Telecommunications (Interception) Act which raises a constitutional point which brings the case into federal jurisdiction and because section 79 on the authorities is described as applying to the exercise of jurisdiction in the present continuous sense, that is continually, according to the appellant’s submission, once federal jurisdiction is engaged, the substantive law under which the person is being tried flips from a State law to a Commonwealth law and applies back to the conduct which was alleged to occur beforehand.

BELL J: With the consequence on your argument that the Chapter 2 principles of criminal responsibility under the Criminal Code (Cth) apply affecting the elements of the offence.

MR QUINLAN:   Yes.  An example we refer to in our outline of submissions, as was determined by the Court in Alqudsi, in relation to an offence against the law of the Commonwealth it is not open to an accused to waive a jury trial and to elect a trial by judge alone.  It is open to do that under State legislation in relation to State laws.  A person may be charged with a State law – it would be in State jurisdiction.  They make that election. 

The trial continues for some time. A federal issue is raised or a constitutional issue is raised in the course of the trial, immediately the election that has been made when the matter was in State jurisdiction – when the matter was for a State law in State jurisdiction – immediately the mode of trial under which the matter was being determined becomes unavailable. Those are the consequences, in our respectful submission, of the appellant’s argument and that is an additional reason for the far‑reaching effect that section 79 is said to have had.

In relation to that timing issue, our friends rely upon the Commonwealth v Evans Deakin Industries and the construction of section 64 of the Judiciary Act in support of the notion that it is only a half‑truth to say that a non‑resident becomes liable for a Commonwealth offence that did not exist before the prosecution.  We, with respect, say that it is a whole‑truth.  But, whether an offence against the law of the Commonwealth has been created, a half‑truth of retrospectivity would be enough to deny that intention to be ascribed to the legislature.

Section 64 is a quite different provision concerned with civil suits in relation to which – as we have said in paragraph 13 of our oral outline – it is not uncommon in civil suits for there to be rights which are inchoate which are dependent upon the course of the suit – contribution is an example. The right to contribution does not arise until the judgment against the joint tortfeasor but it can be tried as an inchoate right. The same is not true of the criminal law, in our respectful submission.

The final matters that we have dealt with and I seek to deal with in the outline are the matters firstly dealing with the matter enlivening the federal jurisdiction.  As we have said there, and we have identified the passage in our submissions, the matter is identified independently of, and, we say, logically prior to – there may be some difference in claiming in terms of when the federal matter is engaged, but logically prior to the commencement of the proceedings brought for its determination. 

The justiciable controversy, the matter in this case, as we have said, was whether, on or about 16 July 2012, the appellant had breached section 6 of the Misuse of Drugs Act and if so what sentence should be imposed.  We have referred there to those passages in Macleod which characterise the matter in the same way.  The matter is one arising and remaining under State law. 

Those – because my learned friend has referred to the decision in Mok and the decision in Pinkstone in relation to the effect of the Commonwealth Places (Application of Laws) Act and the Service and Execution of Process Act -those are quite different and distinct matters.

In each of those cases, the relevant matter, the contravention which was alleged, was a matter arising under section 76(2), contravention of a law operative at the time of the relevant conduct arising under Commonwealth law, which is why for example in the passage we have referred to in paragraph 18 of our outline in Mok in your Honour Justice Bell’s joint judgment with his Honour Chief Justice French, there is a reference to the fact that the information in that case was deficient because it ought to have referred to section 89(4) of the SEPA Act.  That is because there was no offence committed under State law.  The offence was committed under the SEPA law, which incorporated by reference the terms of a relevant State law of the warrant issuing place.

Prior to section 89(4), there was no relevant prohibition of a person absconding from a warrant issued by a magistrate under the Service and Execution of Process Act.  It created it and it was in existence as a Commonwealth prohibition at the time that Mr Mok fled from the persons who had him in custody, as is the case with the Commonwealth Places provision.

In those cases, the relevant dictionary that is used is the State in which it occurs, but there is no time at which there is a State law operative in a Commonwealth place because section 52(i) prevents that from occurring. So at the time that the contravention occurs, it is a contravention of the Commonwealth Places Act incorporating the provisions of - not applying as a State law by incorporating the provisions of the State’s statute, which is why for example in an indictment in a Commonwealth place there is a reference to, as there ought to have been in Mok, the relevant Commonwealth statute which creates the matter. So, that is not only an illustration of how the matter differs, but how provisions of that kind differ from what is suggested to be the effect of section 79.

The final matter that I would simply deal with is the proposition put by my learned friend at the end of the submissions, which is if – and this is if against our primary argument – there is some pointing effect or directing effect in relation to the substantive law that is applied in the federal jurisdiction by section 79, that does not, in our respectful submission, give rise to a law of the Commonwealth for the purposes of section 80 of the Constitution.

In fact, the passage that my learned friend took your Honours to in the decision in Re Colina; Ex parte Torney 200 CLR 386, in the judgment of his Honour Chief Justice Gleeson and Justice Gummow at paragraph 25, in that case their Honours made clear at the bottom of that paragraph:

The fact that there are laws made by the Parliament which are declaratory of the power implicit in Ch III of the Constitution or which make provision under s 51(xxxix) of the Constitution incidental to the exercise of that power does not bring the case within s 80.

We read that consistent with the notion that, if it is suggested that section 79 in some way through the incidental power in 51(xxxix) has work to do in declaring what would have been the effect, in any event, that does not convert it into a Commonwealth law or, I should say, an offence against a law of the Commonwealth within the meaning of section 80, any more than a statutory provision which said that, for example, it is an offence to commit a contempt against a Chapter III court, which would be incidental and declaratory of the power implicit in Chapter III in any event. If your Honours please, those are our submissions.

MR DONAGHUE:   Your Honours, the Commonwealth’s focus in oral submissions is on supporting the position that was provisionally favoured by Chief Justice French in Momcilovic, which has been called in this case the direct application approach. Notwithstanding the structure of the Commonwealth’s written submissions, your Honours will see from paragraph 60 of those submissions that that approach is in fact the Commonwealth’s preferred analysis and the alternative analysis is the analysis by which section 79 directs a court as to where to find the law. But the principal analysis that we urge consistently with that also advanced by the State Attorneys‑General intervening and by the respondent is that the better view is that the Western Australia Drugs Act provision in this case applied directly of its own force with no need for that operation to be supported or assisted by section 79 of the Judiciary Act.

In developing those propositions, I propose to develop two propositions identified as propositions 1 and 2 in the oral outline that we have handed up.  I will pass over proposition 3 which has been dealt with sufficiently by Western Australia and I will briefly say something about the alternative argument.  The first proposition, which is qualified by reference to the second, is that the conferral of federal jurisdiction in and of itself does not alter the law that the Court will enforce or administer in the exercise of the jurisdiction so conferred.

To develop that, I would ask your Honours to go back once again to Edensor where I will endeavour to avoid repeating analysis that has already been undertaken but there are some useful passages in that case that your Honours have not yet been taken to.  So, Edensor (2001) 204 CLR 559 and my focus, your Honours, is on the joint judgment of Chief Justice Gleeson and Justices Gaudron and Gummow, but at the end of the judgment your Honours will note that Justices Hayne and Callinan in their joint judgment relevantly agreed with the analysis of section 79, so this is observations with the authority of five members of the Court behind them. If your Honours could start on page 570 at paragraph 3, you will see in the last four lines of that paragraph a proposition that is important, although I think in this appeal uncontroversial, that:

Federal jurisdiction is “the authority to adjudicate derived from the Commonwealth Constitution and laws” –

So, when we speak of investiture of federal jurisdiction, the focus is on the source of the authority to adjudicate but not on the law that is to be applied in the exercise of that authority to adjudicate. That law might be federal law, as will often be the case or always be the case in a law where federal jurisdiction is attracted because of section 76(ii) of the Constitution, but of course, as is pointed out in the last few lines of paragraph 3, federal jurisdiction may be attracted not just because of subject matter but also because of the:

identity of parties or the nature of the relief sought.

and, of course, as this case demonstrates, by the location of the parties where the jurisdiction is attracted.  In any of those cases, there is no necessary reason to think that the law that will need to be applied in the exercise of the authority to adjudicate will be federal law.  That point is made, or recognised, expressly by their Honours on the next page in paragraph 7.  So their Honours start with a discussion in that paragraph of State jurisdiction:

A State court receives State jurisdiction under the constitution and laws of that State.  It may also [receive] federal jurisdiction . . . under 77(iii) –

and it is noted that section 39(2) of the Judiciary Act is an example, indeed, the primary example of such a law.  Then there is a few lines discussing the position in federal courts and then their Honours say in the middle of that paragraph:

A “matter” in respect of which that jurisdiction is conferred may, in a given case, include claims arising under common law or under the statute law of a State.  But the jurisdiction invoked remains, in respect of all of the claims made in the matter, “wholly” federal –

Now, in my submission, your Honours, that is a crystal clear recognition that in a matter in federal jurisdiction that claims may arise under, owe their force to a law of the State and there is no suggestion that that State law needs to be mediated through section 79 of the Judiciary Act or any other Commonwealth law in order to supply the governing law.  If it did need to be so mediated, the consequence would be, as your Honours Justice Gordon and Justice Keane identified this morning, most striking in a diversity case in the original jurisdiction of this Court because it means that notwithstanding the conferral by the Constitution of that source of jurisdiction, it would completely depend on an exercise of legislative and power by the Commonwealth Parliament to supply the law to be applied in the exercise of that jurisdiction and that is, we submit, a most unlikely construction of the constitutional provisions.

Now, moving from section 7, one then comes to the part of the judgment that has been the focus of attention so far today from paragraph 53 and following at page 586.  Paragraph 53, we submit, is also strongly against the appellant’s case, referring there to the concept of “accrued jurisdiction” and again recognising that federal law may be attracted by the identities of the parties and their Honours say in the middle of the paragraph:

The identity of a party as the Commonwealth, within the sense of s 75(iii) of the Constitution, may be a sufficient animating circumstance without any federal law supplying the substantive rights and liabilities which are tendered for adjudication.

Like paragraph 7, in our submission, that is a direct acknowledgement that there need be no federal law supplying the law to be applied.  Likewise, one sees in paragraphs 55 and 57 the reference to “independently existing substantive law”.  Our friends for the appellants endeavour to deal with that reference by saying, well, that is a phrase that is drawn from Richard Walter.  But, in our respectful submission, that does not really answer the force of the point that their Honours in those paragraphs are recognising the distinction between a conferral of federal jurisdiction as authority to decide and the independently existing substantive body of law that falls to be applied, possibly federal, possibly State, depending on the nature of the matter in question. 

Richard Walter was concerned with 75(v) and it makes the obvious point that the fact that this Court has jurisdiction in respect of officers of the Commonwealth gives it authority to decide when it is said that those officers have exceeded their power but one needs to look to the substantive law to find out whether there has been an excess of power and one goes therefore to an external source.  In that case, it will be a Commonwealth law because it will be governing the powers of a Commonwealth officer, but in other cases in federal jurisdiction it need not be.

EDELMAN J:   Is the contrast between laws concerned with authority to decide and what you are calling and what is described as the substantive laws a sufficiently precise one because the laws concerned with authority to decide can themselves be substantive?

MR DONAGHUE:   They can.  I accept that, your Honour, and that is my second proposition.  If I could very briefly defer answering that more fully but I fully accept what your Honour says.  My point for present purposes is to seek to demonstrate that Edensor supports the idea that one can look for the applicable law in federal jurisdiction to State law applying of its own force, and that is what I am seeking to get from these passages.

One then sees in paragraph 57, after the sentence referring to “independently existing substantive law”, so on the third line down, a reference to South Australia v The Commonwealth where Chief Justice Dixon said after referring to section 64 that:

ss 79 and 80 of the Judiciary Act “direct where this Court shall go for the substantive law” –

and it is that idea quoted by their Honours in paragraph 57, and also by this Court in the British American Tobacco Case, that underpins what we have put as our alternative submission. 

GAGELER J:   How does it fit into this judgment?  It just does not work, does it?

MR DONAGHUE: Your Honour, I accept that there are, we submit, significant difficulties with it working in that way. We submit that the best analysis of it is that if one, contrary to our primary submission, construes section 79 as extending to State and Territory laws of a kind that do not fall within the exclusive area of Commonwealth power, then one is dealing with laws that may be outside Commonwealth power – State and Territory laws on topics that are outside Commonwealth power completely and that one then has what some of the parties have called a declaratory‑type idea where what section 79 is doing is not giving operative force to anything but just helping you – a signpost to a destination that you could readily arrive at without the signpost, so that it points one to the applicable law without changing it in any way.

But we make that submission, your Honour, only in relation to – and our friends for the appellants may not fully have appreciated this distinction in the way we put our submission. Within the area of exclusive power, when section 79 applies to a law it applies as Commonwealth law, as a surrogate federal law. We do not cast any doubt on that proposition. It is only if one goes outside the area of exclusive legislative power ‑ ‑ ‑

GAGELER J:   Just going back there, you do not need the word “surrogate”, do you?  It is really superfluous and quite distracting.

MR DONAGHUE:   I accept that, your Honour.  It is used in Solomons ‑ ‑ ‑

GAGELER J:   I know, it is all over the place.

MR DONAGHUE:    ‑ ‑ ‑ it may go back further but I accept that federal law is sufficient and it in that manifestation uses the same model as in Mok and in Pinkstone and is a true Commonwealth law that governs rights and liaibilities and needs a head of power to support it.  Within the area of exclusive Commonwealth power, obviously that is not a difficulty and so we submit that there is no challenge in reaching the conclusion that 79 of the Judiciary Act as we construe it is supported not only by Commonwealth power but by exclusive Commonwealth power, and I will develop that shortly in a moment if I may.

The underpinnings of the alternative submission are South Australia and the Commonwealth, paragraph 57 of Edensor and British American Tobacco applying the same idea but, having said that, we accept that there are difficulties with that analysis and that the direct application of it is preferable. 

Finally, in Edensor, your Honours, if you could turn to paragraph 72 – or, actually, your Honours, before you move on from 57, under the quote from section 79, you will see that their Honours draw attention to two matters about section 79:

The first is that s 79 implements, or at least is consistent with, what in any event would flow from the operation of Ch III and covering cl 5 of the Constitution. The second is that s 79 is to be supported under s 51(xxxix) of the Constitution –

Their Honours return in paragraph 72 to the first of those propositions and say that, in the second sentence:

As to State law –

the operation of 79:

may be taken to reflect what otherwise would be the operation of Ch III.

That observation was quoted with approval by five members of this Court in Solomons. In our submission, it is very hard to reconcile with the idea that the operation of section 79 is to re‑enact as Commonwealth law the full body of State law that applies because quite plainly Chapter III itself did not do that. So if section 79 is just reflecting the operation that Chapter III would otherwise have had, it is very hard to see how it could be having that re‑enacting effect across the board in relation to the full body of State law.

Your Honours, can I move from there to the second proposition which is that there is a qualification on the first where we said the conferral of federal jurisdiction does not change the law.  The conferral of federal jurisdiction does have the consequence that a certain category of State and Territory laws cannot apply of their own force.  That is a proposition that is underpinned, as all the parties agree, by recognition that there is an area of exclusive Commonwealth legislative power concerning laws that apply to the exercise of federal jurisdiction.

There is, however, not precise agreement about how that area of exclusive Commonwealth legislative power should be defined.  Most of the parties and State interveners have been content thus far to focus upon Justice Gummow’s formulation in APLA.  If I could ask your Honours to go back to APLA (2005) 224 CLR 322 and to turn to page 405 – the key paragraph upon which attention has been focused in 230. But before I come to that can I invite your Honours to start at 226 on the previous page, page 405, where Justice Gummow records a submission that was put by the amici in that case to the effect that the State law in question fell:

within the zone of exclusive federal legislative power –

and his Honour records that if that is right State law would be invalid without any need to get to any of the other issues in the case.  That is the introduction that then leads his Honour to advance a number of propositions about the exclusivity of federal legislative power which he does then in propositions 1 through 6, ending on page 233.

For our purposes, your Honour, in my submissions, we should start at 228 where his Honour notes the range of different kinds of legislative powers that are conferred on the Commonwealth Parliament by Chapter III, including about halfway down that paragraph, a reference to laws:

to confer, define and invest federal jurisdiction (s 77) –

So his Honour is clearly paraphrasing there from section 77 of the Constitution as one amongst a number of different powers that one finds conferred on the Parliament by Chapter III. His Honour then notes – four lines up from the bottom:

These grants of legislative power would, in accordance with general principles, carry within them “everything which is incidental to the main purpose of [the] power”; the extent of this incidental power “will be affected by the nature of the subject matter of the express grant –

So his Honour is recognising that in addition to the express incidental power one finds in section 51(xxxix) that the grant of power, the various grants of power in Chapter III itself also carry with them, as part of that grant of power, the power to do things incidental to the grant.

Then having identified that range of powers, his Honour says in 229:

Fourthly, the powers of the Parliament just mentioned –

all of them:

are necessarily exclusive of those of the legislatures of the States.

It is then against that background that his Honour comes to the fifth proposition upon which attention has been focused where his Honour uses the words “conferring, defining and investing”, which is the section 77 language again and refers to the fact that various:

laws of the State with respect to limitation of actions and other matters of substantive and procedural law which are “picked up” by s 79 of the Judiciary Act, could not –

apply:

directly and of their own force.

In my submission, reading that in context, when his Honour says “substantive laws” he is clearly not suggesting that all of the laws of the States fall within the area of exclusive legislative power. What his Honour is talking about is that laws of the kind that the Commonwealth Parliament can make under Chapter III fall in within the exclusive area of legislative power and that, in our submission, is to accurately identify the mischief to which section 79 of the Judiciary Act is directed.

It recognises that there are some State laws that are unable to apply of their own force in the exercise of federal jurisdiction and it fills that gap – if I can call it a gap – by picking up laws of that kind in the State or Territory where federal jurisdiction is being exercised.

GAGELER J:   Is it purely a gap; does it go beyond that gap?

MR DONAGHUE:   No, not on our primary submission.  On the alternative submission, if your Honours are against us as a matter of construction, then it does and it has a different operation beyond the gap, but our primary submission is no.

GAGELER J:   If you just look at the words of section 79, when it says:

including the laws relating to procedure, evidence, and the competency of witnesses –

all of those are in the gap, are they?

MR DONAGHUE:   Yes.  In our submission, that is so.  How exactly one identifies the gap, one could use the phrase “conferring, finding or investing”, which our friends are using - we do not quibble with that phrase so far as it goes.  It is that all of those laws are within the gap or are within the area of exclusive power but we do submit that one needs to go a little further than that. 

The case law is not uniform in the expression used, as my learned friend from Western Australia pointed out, your Honours Justice Nettle and Justice Gordon used the formulation “provide for and regulate the exercise of federal jurisdiction”.  We submit that probably catches the concept a little more accurately than just conferring, defining or investing.  Your Honour Justice Edelman this morning talked about laws concerned with authority to adjudicate.  As we understand it, that expression is directed towards the same topic.

There may of course be difficulties at the margins in identifying precisely what the boundaries of that area of exclusivity are, in the same way as there are difficulties at the boundaries of the incidental power and working out what is or is not incidental.

In our submission, your Honours, we would be content to proffer the Alqudsi formulation as an appropriate formulation but we accept that it is not precise at the boundaries but, in our submission, your Honours do not need to be troubled by that in this case because section 6 of the Misuse of Drugs Act is nowhere near the boundaries.  It is clearly not a law that is concerned to provide for or regulate the exercise of federal jurisdiction.  It is creating a substantive norm of conduct that binds the people in Western Australia and it ‑ ‑ ‑

EDELMAN J:   The textual description is, is it not, laws that are binding on all courts and that is what each of these formations is trying to explicate?

MR DONAGHUE:   I entirely accept that, your Honours, and in the part of my submissions I am going to pass over we were going to make that point but, in our submission, the use of that language “binding on courts” is apt to distinguish between laws that are binding on people such as the criminal drug offence laws and Parliament, in using that formulation, has differed from the formulation it has used in other places, including in the Commonwealth Places Act which talks about laws applying, in section 68 of the Judiciary Act which talks about laws applying. So, the distinction, we submit, marries with the purpose that section 79 serves.

GAGELER J:   Do you know where it comes from, that language?  It is not in the ‑ ‑ ‑

MR DONAGHUE:   The binding on ‑ ‑ ‑

GAGELER J:   Yes, it is not in the American precedent.

MR DONAGHUE: No, it appears to come from covering clause 5, your Honour, so covering clause 5 refers to the laws being made by the Parliament under the Constitution, being binding on the courts but it then extends to judges and people of every State, so ‑ ‑ ‑

GAGELER J:   And do you draw any comfort from the distinction between the language of covering clause 5 and the section 79?

MR DONAGHUE:   We do and I think Victoria has developed this in its submissions as well in the sense that, binding on courts appears to be a subset of the range of laws that might be binding on people as well as courts.  Now, the distinction that we draw, as we have said in writing in our submission, is not a procedure substance distinction, although it is submitted it is true that many of the laws within that exclusive area of power will be what would commonly be called procedural laws but that will not be true of all of them.

It will not be true, for example, of many limitation laws which are described at least for choice of law purposes as substantive laws but which the decisions of the court show are laws to which section 79 will in the appropriate case apply: a limitation law being a law, in our submission, that comfortably falls within the formulation providing for or regulating the exercise of federal jurisdiction and the same is true, in our submission, for the body of case law subject to debate in this case, including things like the right to proceed against parties in the exercise of federal jurisdiction.

So that the distinction itself, as your Honours know, has been criticised in this Court in Bass v Permanent Trustee, said that the procedure substance distinction is one that “sheds no great light on this or any other area of law”. We submit that when one finds in the authorities references to section 79 dealing with substantive laws, that can be accommodated within the submission that the Commonwealth makes to you for the reason that I just identified.

And so the way, in our submission, that section 79 works in this case, on the facts of this case, was that it had no operation with respect to section 6 of the Misuse of Drugs Act, because that was not a law providing for or regulating the exercise of federal jurisdiction.  That law applied of its own force to the trial of the appellant.  But then, when one comes to the majority verdict provisions, in section 114 of the Criminal Procedure Act, that was a law that could not have applied of its own force in the criminal trial. It applied here because section 79 picked it up and applied it to the trial of the State offence that applied by its own force and, because it remained a trial of the State offence, section 80 of the Constitution had nothing to say with respect to it, section 80 being confined to trials on indictment of offences against a law of the Commonwealth.

EDELMAN J:   What about a right of contribution, such as – is it Austral ‑ ‑ ‑

MR DONAGHUE:   Yes.  That, your Honour, I think is the case that is closest to the boundary or hardest to reconcile with the analysis that the Commonwealth has proffered.  But it is a right that is available only in circumstances where the defendant, or the primary defendant, has been found to be liable.  And it may be that it can properly be analysed as akin to the regulations of the remedies that can properly be granted by the Court upon the determination of the matter so that it, in that sense, we submit, can be fitted within the analysis that we advance.

So, your Honours, that is our primary submission. Very briefly, on the alternative submission, as I think I have briefly said, it is no part of this alternative analysis to deny that laws that fall within the exclusive power of the Commonwealth are federal laws when picked up and applied by section 79. If your Honours were to find as a matter of construction that section 79 purports to pick up and apply to laws beyond that area, then, in our submission, in that operation the law is not to be regarded as a surrogate federal law – or a federal law – in part because there may or may not be Commonwealth power to enact section 79 having that operation, unlike the cases like Pinkstone and Mok where the law that is picked up is being picked up to apply in an area that is supported by an express grant of legislative power. 

In the context of section 79, where the legislative support comes from the incidental power, there is no reason to think that section – and every reason to deny that the Commonwealth would have complete legislative power to pick up each and every State and Territory law that might, on a wide construction of section 79, fall within it. One has, as I have already mentioned, references in both Edensor and British American Tobacco to section 79, directing where the Court is to go and operating not to in that manifestation to reinact the law but as something somewhat akin to a choice of law rule.

EDELMAN J:   But British American Tobacco does not quite say that, though, does it?

MR DONAGHUE:   Well, British American Tobacco, at paragraph 65, the Court says:

Section 79 of the Judiciary Act directs where the Supreme Court is to go for the applicable statute law dealing with matters of procedure.  But . . . is not limited to laws of that [kind]. 

That is the paragraph I am referring to.

EDELMAN J:   Could that not be comfortably read as concerned with matters that are directed to courts?  In other words, the reference to it being directory is talking properly about it being picked up, but picking up matters that might be described as procedural or, more broadly, as conferring, defining and investing jurisdiction.

MR DONAGHUE:   Well, your Honour, we are certainly content with that reading.

NETTLE J:   Mr Solicitor, may I just ask:  why is it to be thought that the idea of declaring or directing is suspect?

MR DONAGHUE:   We do put it as an alternative submission ‑ ‑ ‑

NETTLE J:   I understand that.

MR DONAGHUE: ‑ ‑ ‑ but essentially for these two reasons. First, that that approach requires section 79 to have two quite distinct operations. It requires it, with respect to laws that cannot apply of their own force, to enact the best federal law and then, via the same legislative language in section 79, to have a directory operation for laws that cannot be enacted, or

either cannot be or need not be enacted as Commonwealth law. So, because it requires that dual operation, that is one reason that one might hesitate. The other, your Honour, is that in our submission it is a quite unnecessary operation to give to section 79.

GAGELER J:   There is a third problem, I think, as well. It has been held in a number of cases that section 79 does not – to use a metaphor, section 79 will pick up and alter to some extent State laws and the directory notion just does not accommodate that operation of section 79, I think, for example, where a State law on its proper construction is considered only with State courts.

MR DONAGHUE: Indeed, your Honour, but on that operation, I think it is right to say that we would be in the area of exclusive legislative power. Section 79 would be picking up those laws as they apply to State courts and allowing federal courts or a court exercising federal jurisdiction to exercise – so it would be changing, but within an area of Commonwealth legislative power.

So, it is on that alternative analysis, we submit, that if section 79 does apply to the Western Australian Drugs Act, it does not do so in a way that re-enacts that law as a substantive law, and so one ends at the same endpoint that I was at previously on our main submission, which is that because section 6 remains a State offence, it does not engage with the language of section 80 such that a trial by jury was required. Your Honours, unless there are any questions, those are my submissions.

KIEFEL CJ:   Yes, thank you, Mr Solicitor.  The Court will now adjourn until 9.45 am tomorrow for pronouncement of orders and otherwise until 10.15 am.

AT 4.12 PM THE MATTER WAS ADJOURNED
UNTIL THURSDAY, 2 FEBRUARY 2017