Rothmans of Pall Mall (Aust) v State of Western Australia & Anor

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Perth No P62 of 2002

B e t w e e n -
ROTHMANS OF PALL MALL (AUSTRALIA) LTD
Appellant
and
STATE OF WESTERN AUSTRALIA
First Respondent
THE COMMISSIONER OF STATE TAXATION (WESTERN AUSTRALIA)
Second Respondent

GLEESON CJ
McHUGH J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT PERTH ON WEDNESDAY, 23 OCTOBER 2002, AT 10.18 AM

(Continued from 22/10/02)

GLEESON CJ: Yes, Mr Hutley.

MR HUTLEY: Thank you, your Honour. Your Honours, to take up one matter from yesterday: I referred at the commencement of my submissions to the fact that the Act had been amended to reduce the relevant period from two months to one month in the endeavour to keep within bounds the material to be brought over. That amending Act which was Act No 18 of 1993 was not included. Can I hand up eight copies for the Court and your Honours will see that that takes effect as a result of the combined effect of section 2 and section 10 which replaces a new schedule to the Act which has one monthly periods rather than two months.

Your Honours, yesterday afternoon I had come to the point of consideration of section 6 of the Crown Suits Act. Your Honours, construction of that, of course, has to take place in the light of the Constitution in covering clause 5. Were the immunity of the State to be denied in respect of certain matters by operation of either the Constitution or covering clause 5, the Act, of course, could not speak to that denial and the Act, moreover, would be construed on the basis that it would not entrench upon that denial. So against that background, one comes to a consideration of sections 5 and 6.

In our submission, the combined operations of section 5 and 6 is to remove the immunity of the State of Western Australia from suit. That immunity is only removed in relation to the field covered by those sections if certain conditions are satisfied. The field covered by those sections is explained substantially by section 7 of the Act which indicates those areas unaffected by the balance of sections 5 and 6.

KIRBY J: You accept, do you, that the Act applies to the State of Western Australia? In its terms, it talks of the Crown and in section 3 it says:

“Crown” means the Crown in right of the Government of Western Australia.

MR HUTLEY: Yes, we accept that it is Western Australia.

KIRBY J: You accept that it is the constitutional State?

MR HUTLEY: Yes, your Honour.

KIRBY J: Do not assume that I will accept that.

MR HUTLEY: Yes, your Honour. Your Honours, in our submissions, the conditions are specified in section 6(1), (2) and (3). The case is principally concerned with subsection (1) and in point of fact, subsection (1)(a). Subsections (2) and (3) are further qualifications of subsection (1). Section 5 does not operate to effect a removal of the immunity which is then reimposed in the event that section 6 is not satisfied. Rather, the alteration of section 5 is conditioned upon satisfaction of one of the provisions of section 6.

If I could turn then to section 6, your Honours. The words “no right of action” which appear in the second line of the subsection specify two events which must occur before the entitlement to sue is conferred by section 5. The double satisfaction is necessary, of course, subject to subsections (2) and (3). If subsections 6(1)(a) and (b) are satisfied, the Crown as referred to in section 5(1) may be sued. It is to be noted, of course, that the immunity is only lifted pursuant to section 6(1) upon the commencement of the proceedings in the case concerned and that appears from section 6(1)(b).

Under subsection (2):

The Attorney-General may on behalf of the Crown consent in writing to the bringing of –

a suit –

at any time . . . whether or not the notice as required by subsection (1) of this section has been given.

“As required”, in our respectful submission, really means no more than “as stipulated by”. The effect of such a consent is not to confer the right to sue but, rather, remove the condition precedent to the entitlement to sue specified in section 6(1). The right to sue still derives from section 5.

GUMMOW J: Yes, but the right to sue in section 5 is “in any Court” capital “C”. Is there any definition of capital “C” Court anywhere?

MR HUTLEY: Yes, your Honour.

GUMMOW J: In the local Interpretation Act? In any event, it has to mean “Court exercising State jurisdiction”. Otherwise it is invalid.

MR HUTLEY: Your Honour, the jurisdiction, yes.

GUMMOW J: If the State of South Australia has a dispute with the State of Western Australia and sues in this Court, it is not because of section 5 that can be done.

MR HUTLEY: Quite, your Honour, but let it be assumed there is a federal matter involving both the State of Western Australia and a trading corporation who are acting in business together and they engage in a negligent ‑ ‑ ‑

GUMMOW J: All I am saying to you is section 5 cannot speak to that situation and is not to be construed as doing so because it would be invalid because of what is said in a string of cases including Robertson Transformers back in the 70s. So I do not know what we are doing at the moment.

MR HUTLEY: Your Honours, if the position is that under no circumstances can this speak this in any case in federal jurisdiction ‑ ‑ ‑

GUMMOW J: That is so, is it not? Do you say that is not so?

McHUGH J: It cannot of its own terms.

KIRBY J: That is all that is being said, I think.

MR HUTLEY: Yes, of its own terms, your Honour, I accept. The question is whether it might be picked up through section 79.

GUMMOW J: That is the question we have to look into.

MR HUTLEY: But, your Honour, before one gets to section 79, because of certain arguments which are put about the operation of this through section 79, in our respectful submission, it is important to understand how it purports to act on its own terms because it is only picked up and applied as per section 79 in accordance with its proper construction.

McHUGH J: But you tend to treat the time limitations as equivalent to statute of limitations.

MR HUTLEY: No, your Honour, we do not. What we say they are, are conditions precedent to the lifting of the immunity, not time limitations. In contradistinction to the position of the State of Western Australia, in our submission, it is just simply a condition precedent to the lifting of the immunity.

McHUGH J: Do you know The Crown v McNeil that decides this, or Maxwell v Murphy, both those cases. It is discussed Justice Windeyer in Australian Iron & Steel v Hoogland.

MR HUTLEY: Exactly. It is a condition precedent to the removal of the immunity. The issue, your Honour, of course, is whether it is picked up and applied by section 79 as surrogate federal law. That goes without saying, in our respectful submission. The question is whether it is picked up. The argument turns to some extent on whether there is, for example, a constitutional denial of immunity. My learned friend for the Commonwealth submits that even if there be a constitutional denial of the immunity such that there is a right to proceed, section 79 can pick up section 6(1) and qualify that denial of immunity in federal jurisdiction. The reason, your Honour, I am addressing its true construction is because to address that argument of the Commonwealth, one has to, of course, have regard to the jurisprudence that one will not apply such a section through section 79 and give effect to it other than according to its true construction.

McHUGH J: But accepting that is so, is it not arguable that sections 5 and 6 are part of the definition of a “relevant matter”? I am not talking about “matter” in a constitutional sense, I am just talking about “matter” generally. It is part of your title to your cause of action.

MR HUTLEY: In our respectful submission, no. Our cause of action exists at common law. It is deficient to the extent that ‑ take this out of a federal sphere, just a normal money have not received claim against the State where there no federal issue involved. That cause of action exists at law and I took your Honours to the cases in this Court which have so found it. There is an immunity from suit and the character of that immunity historically was the incapacity for the Crown, re the State of Western Australia, to be sued in its own courts.

KIRBY J: Exactly. Why do you accept that the State has those immunities? There is law in other places, you know, that says it does not. Why do you accept that all those prerogative immunities attract to the constitutional State of the Commonwealth of Australia? Just because a lot of people have assumed that, do not assume I assume it.

MR HUTLEY: Your Honour, just so I understand that I am on the same page as your Honour, I understand the argument that at least in the situation where one is dealing with a right which arises under the Constitution ‑ ‑ ‑

KIRBY J: You say the Constitution was breached. You want to get money back because of constitutional defect and you are accepting that all the baggage of Crown immunity is picked up by the State of the Commonwealth in the Constitution.

MR HUTLEY: Your Honour, we do not accept that at all. I am addressing a series of alternate arguments about the issue. One alternate argument is that the State’s immunity is not removed per se by the fact of a cause of action, an essential element of which involves an infringement of the Constitution. We do not put that position but that is one of the positions. We have three descending orders of case, your Honour: one ‑ ‑ ‑

KIRBY J: I wonder if you have forgotten your top ascending order in the case?

MR HUTLEY: I understand the argument, your Honour, but Mewett does not yet establish and has not yet established that ‑ ‑ ‑

KIRBY J: It is a question of whether you are pushing the principle, which at least to me seems distinctly arguable, that ‑ ‑ ‑

MR HUTLEY: Your Honour, we are putting that submission but we say the Court may not consider it necessary to determine that question here because ‑ ‑ ‑

KIRBY J: I accept you have to have alternative arguments. You proceed with them, just do not forget one of them.

MR HUTLEY: Your Honour, your Honour can take it that because of the statement I made as to how one has to construe this Act against the background of any constitutional right, that if there be such a constitutional right, we say this Act has nothing to do with it. Your Honour, we will be submitting that having regard to the fourth category of claims that your Honour Justice Kirby and Justice Gummow referred to in Mewett, we fall within it. We will be submitting that because of covering clause 5, we acquire a right to proceed.

GUMMOW J: Why do you not do that? Why do you spend so much time ‑ ‑ ‑

KIRBY J: On ancient history.

GUMMOW J: …..opponents, rather than showing us there is some clear, nice path?

KIRBY J: And a constitutional path, an Australian constitutional path.

MR HUTLEY: Your Honours were not in a majority in Mewett. There were two dissenting ‑ ‑ ‑

GUMMOW J: I am not going to argue about Mewett. All I am saying to you is it might be helpful if you could show us some clear path that you want us to follow, rather than trimming off all these overhanging branches.

MR HUTLEY: There is a clear path, your Honour, in our respectful submission, through section 64 and that is established authority. There is another path which is not so clear which we will be relying on and, your Honour, which may be a superior path, if it exists, that is, the Constitution. Our first path, your Honours, is that section 64 is pellucidly clear. It gives a right of suit and that is the end of it.

McHUGH J: But it may be invalid in its application to the State.

MR HUTLEY: Your Honour, we say one thing it is valid to do is confer rights of action. We say it has within it the words “as near as possible”. The mere fact that in theory one could conceive a case which might exceed the constitutional power by the application of the express terms of 64 will not invalidate it because the simple answer is that result will not be as near as possible because the Constitution will not permit of it.

KIRBY J: This is constitutional snakes and ladders. It is very complicated and very difficult and you have to take the various snakes and ladders, but do not forget that at least possibly there is a ladder that goes straight up and it is an Australian constitutional ladder. Just because everybody has not seen it in the past does not mean it does not exist.

MR HUTLEY: Your Honour, I am aware of the ladder. One will come to the ladder. On the current authority in this Court, I have a ladder that gets me there by two or three other steps.

KIRBY J: Just beware of those snakes.

MR HUTLEY: Your Honour, I am surrounded by them and I will not say I am confronted by them.

KIRBY J: Some of them are giving you partial help.

MR HUTLEY: Your Honours, I know where I should go now.

KIRBY J: Anyway I think it is better if you develop your argument.

MR HUTLEY: I just wanted to explain the operation of the Act because there is a dispute between our side and South Australia as to the operation of the Act and to quote one member of the Bench, one has to go to the text in the first instance, in our respectful submission, simply to see, as it were, the universe of discourse. One will then come to the steps by which we say we get the right of action.

Section 6(2) deals with the Attorney-General’s position and that empowers the Attorney-General to the consent to the bringing of an action and subsection (3) confers a discretion upon the Court in the circumstances there indicated. However, whichever way one proceeds, the right of action conferred by this Act insofar as it does is a right of action conferred by section 5. In other words, satisfaction at any permitted time of any one of the provisions will make perfect rights of a person which remain imperfect whilst the immunity of Western Australia to act in its own courts is in place.

Now, in that context, the words “right of action” in section 6 means the right to proceed and section 6(1)(a) tells you that a right of action does not lie unless certain things occur. It does not tell you what that right of action is, let alone confer it. Section 5 does that.

When the current proceedings were commenced, we had not complied with section 6. Upon the issue of the writ, the proceedings were in federal jurisdiction. Section 79 bound the Supreme Court to apply State laws as surrogate federal laws as far as they were applicable, except as otherwise provided by the constitutional laws of the Commonwealth. The terminology of the Court: these laws are picked up except as otherwise provided and applied as surrogate federal law and, importantly, with their meaning unchanged.

If the appellant acquired a right to proceed in respect of these causes of action from any source which derives either from the Constitution or federal legislation, section 5 and 6 of the Crown Suits would either not be picked up because something had otherwise provided or simply not speak to the topic in so far as the terms of section 6(1) had not been fulfilled and, therefore, the case would not be one to which the section was applicable.

The test for otherwise providing is that provided by this Court in Northern Territory v GPAO (1999) 196 CLR 553, namely inconsistency or repugnancy. As was held in Bass v The Permanent Trustee Company (1999) 198 CLR 392, a purported grant of a concurrent right to proceed could establish such a repugnancy. Thus, for example, if section 6(1) had been complied with and a right to proceed were to be found either in section 64 or deriving from the Constitution, section 5 would not be picked up as it would be repugnant to that right.

Turning to section 64. The section applies to any suit. “Suit” is defined in the Judiciary Act in section 2 as:

any action or original proceeding between the parties.

It applies to a suit in federal jurisdiction. It only operates if there is a suit to which the Commonwealth or State is a party. However, of course, once the State is a party, in the words of The Commonwealth v Evans Deakin Industries 161 CLR at 254, the condition for the operation of section 64 is satisfied.

Now, there is no gloss to be put on those words by reference to a characteristic said to be present or absent in the claims comprehended in the original process.

GUMMOW J: Mr Hutley, am I right in thinking that what you have been submitting that 79 does not pick up section 6?

MR HUTLEY: Neither 5 nor 6.

GUMMOW J: Assume it does, just assume it does, that picking up would then be subject to other provision by any other law of the Commonwealth, would it not, with would include 64?

MR HUTLEY: Yes.

GUMMOW J: What would happen then?

MR HUTLEY: In our respectful submission, if it were ‑ one, the true construction of right of action in section 6 is only the right of action conferred by section 5. The picking up would not give it a different meaning. It would simply not speak to the right of action conferred by section 64. When one reads section 5 and section 6 together, the right of action in section 6(1) can only be the right of action deriving from the capacity pursuant to section 5 for the Crown in right of Western Australia to be sued.

Thus the point is that the jurisprudence of this Court about not giving a different operation to a section defeats any possibility that section 6 could impact upon a right to proceed given under a federal law. That is the first point. If it purported to, it would be, in our respectful submission, repugnant to it. It would not be construed, in our respectful submission, as having sought to qualify a right to proceed given by federal law.

Now, the only qualification on the conferral of the equalisation process undertaken by section 64 is that it take place “as nearly as possible”.

Now, section 64 was enacted, of course, at least in part in pursuant to section 78 of the Constitution which conferred power upon Parliament to make laws conferring rights to proceed against the Commonwealth and the States. In our respectful submission, that at its very heart comprehends a power to make a law lifting the immunity of the State from suit in federal jurisdiction. As your Honour Justice McHugh said in the Mutual Pools & Staff v The Commonwealth (1994) 179 CLR 155, that:

The primary purpose of section 78 was to ensure that the Federal Parliament could remove the immunity of the Crown in right of the Commonwealth or the States from actions of tort or breach of contract.

Your Honour referred to the Convention Debates. That was at a time, of course, when contract was conceived to comprehend the sorts of claims with which we are concerned.

Section 64 confers that right to proceed once the suit has been commenced. That is the sole condition for the equilibrating effect of section ‑ ‑ ‑

GUMMOW J: Section 64 does not talk about rights to proceed at all.

MR HUTLEY: It speaks of “rights”, your Honour ‑ ‑ ‑

KIRBY J: That is a very important word alone.

MR HUTLEY: Of course, your Honour.

KIRBY J: It is not restricted to rights to proceed.

MR HUTLEY: Of course not. All we need to do is that it comprehend rights to proceed. The jurisprudence in this Court with respect to the Commonwealth certainly goes well beyond mere rights to proceed, but it has imposed causes of action against the Commonwealth and at least, in our respectful submission, it must comprehend a right to proceed against the State.

HAYNE J: What exactly are you meaning by saying “a right to proceed against the State”?

MR HUTLEY: Removal of the immunity from being sued in its own courts.

HAYNE J: Is the right to issue process?

MR HUTLEY: Yes, and to proceed against the Crown in right of State in this case in its own courts.

GUMMOW J: It is not its own courts, the Australian courts.

MR HUTLEY: In the Australian courts.

GUMMOW J: That is the point.

MR HUTLEY: Your Honour, I am content with that conclusion. The question is, does it confer a right to pursue the Crown in the State court? In our respectful submission, section 64 was intended, really, to reflect historically that which derived from the legislation that was concerned in Farnell v Bowman. That was legislation which itself removed immunities of the Crown from suit. Now, there were certain textural differences between the sections there under consideration and the current sections but, as this Court has mentioned on a number of occasions and the citations are referred to in our submissions, the differences are not significant.

What we say is that once you issue process and the matter is in federal jurisdiction, section 64 engages. The question is the rights of the parties, that is, between here my client and the State of Western Australia, is to “as nearly as possible be the same” as in a suit between subject and subject. In such a suit between subject and subject, one has the right to proceed in that court to have one’s cause of action adjudicated upon.

GUMMOW J: Assume a resident of South Australia who had a claim in tort against the State of Western Australia, section 75(iv) of the Constitution applies. What more did you need?

MR HUTLEY: Nothing in those circumstances, your Honour. The question is whether in the jurisprudence where one is dealing with a matter arising under the Constitution which does not fall within section 75, whether the immunity of the State is denied, to use the terminology of Mewett, by that fact. For the purposes of this argument one would assume that that has not been determined and one would just assume that this was like any normal case in federal jurisdiction where the State of Western Australia is a party, there is no constitutional element. In our respectful submission, section 64 would operate to remove the immunity of the State of Western Australia to suit in the Supreme Court of Western Australia because the right to proceed against it is a right to proceed – given, conferred – by section 64 upon commencement of suit.

If that proposition be correct, the equilibrating effect of the section is to put my client in the position, vis-à-vis Western Australia, of a subject. There is no noticed provision of the variety provided in section 6(1)(a) as between subjects and the claim succeeds on this point.

The idiosyncratic precondition which the State of Western Australia has imposed through section 6(1) to a right to proceed against it is, as will appear from the other State legislation to which we refer to in footnotes to our submissions, unique in the nation. Nothing about that notice regime require it such as to prevent its removal being not as nearly as possible to that between subject and subject.

KIRBY J: Accepting for the moment the assimilation of the Crown or the government of Western Australia with the State, it is not unusual to have a notice provision. When I was a young lawyer they were in abundance. Proceeding against government at every level, it was very common to have notices. It is only in the enlightenment of the last 20 years or so that they have disappeared, so it is not peculiar.

MR HUTLEY: Yes. Your Honour, peculiarity is not the test for as nearly as possible, in our respectful submission. The question is, is there something about the State which, to remove a notice provision, would entrench upon something either essential or peculiar to a State as a litigant.

KIRBY J: I suppose an argument might be that a State is a big thing with a lot of branches and a lot of employees and a lot of officers. Getting out the files and getting to the information requires a bit of time and therefore that might have been one of the reasons behind notice provisions.

MR HUTLEY: Your Honour, the reason for notice of provisions one can understand and no doubt they were such as your Honour has indicated, but the test of section 64 is that there shall be an equalising as nearly as possible and that dose not mean as nearly as convenient.

KIRBY J: It does allow a little flexibility, having regard to the peculiarities of a State as a litigant. What is so burdensome about having to give notice as soon as practicable?

MR HUTLEY: Your Honour, let me assume that it is not burdensome. In our respectful submission, that is not the question. If one looks at every other State in this country, together with the Commonwealth as one can see from section 64, no notice provisions are imposed upon litigation against them. One then asks the question, is the removal of the notice provision such as to be not possible having regard to the character of Western Australia as a State? And the answer to that is, it may be convenient for Western Australia to have such a provision but it is certain the absence of one is not one which, as it were, defeats some essential characteristic of the State as a State. The examples usually given in the cases have been such things exposing States to attachment for contempt and the like which are, as it were, antithetical to the character of the State as a State. This is just a notice provision which, as we have submitted, is idiosyncratic. It is convenience may be accepted; its necessity is not, and in our respectful submission, it simply is not necessary.

If that be correct, on the per medium of section 64 and the conventional jurisprudence in this Court, in our respectful submission, we succeed.

Turning then to the constitutional issue as to whether the State of Western Australia’s immunity is denied because of the character of the suit with which one is concerned. Here the character of the suit arises consequent upon an infringement by the State of a constitutional provision, section 90. The States are obviously bound by the provisions of the Constitution and under covering clause 5 all courts are bound to give effect to the Constitution.

GLEESON CJ: Is that not implicit in the Constitution anyway now?

MR HUTLEY: Yes, your Honour, but the section 76(i) jurisdiction did not have to of course be conferred upon any court. This is not jurisdiction within section 75. Had it not been conferred and such an action had arisen against a State, the court of that State would have had to give effect to the Constitution at least by virtue of covering clause 5 – I am saying at least by virtue of ‑ ‑ ‑

GLEESON CJ: The trouble with putting all your weight on covering clause 5 is it is not subject to section 128, is it?

MR HUTLEY: The amendment?

GLEESON CJ: Yes.

MR HUTLEY: Let it be accepted that it is not, your Honour, non constat that whilst there be a constitutional provision in place, albeit subject to amendment, the Court should not give effect to it. Also, your Honour, beyond covering clause 5, the Constitution itself has effect to bind the States.

The character of the constitutional compact obviously contemplated suits of this variety could arise and as Justices Kirby and Gummow at page 548 in the Commonwealth v Mewett expressed that this sort of suit –can I take your Honours to it – that this type of controversy falls within “the fourth class of controversy” referred to on page 548 in the joint judgment of Justices Gummow and Kirby.

The fourth class of controversy concerns litigation by which an individual or corporation seeks redress for tortious injury to private or individual rights by government action in administration of a law which the plaintiff asserts was not authorised by the Constitution but upon which the defendant relies for justification of the alleged tortious conduct. To deny such a claim on the footing that, in the absence of enabling legislation, the Crown can do no wrong and cannot be sued in its own court would be to cut across the principle in Marbury v Madison. It would mean that the operation of the Constitution itself was crippled by doctrines devised in other circumstances and for a different system of government.

That, of course, applies equally to a circumstance such as the present where rather than a tortious role, money is obtained by the State as a result of legislation which is discovered to be in breach of one of the constitutional provisions.

That, we submit, leads of itself to a right to proceed against a State because absent such a right to proceed the constitutional provision could effectively be set at nought by the device of reliance upon the immunity of the State, in our respectful submission, does not rely for its efficacy upon section 75, nor need it do so, although it is to some extent of course supported by section 75(iv) and the possibility ‑ ‑ ‑

McHUGH J: It does not apply in this case though, does it?

MR HUTLEY: Section 75(iv) does not but 75 may inform the implication of the right because the jurisprudence in this Court in relation to section 75 suggests that the right to proceed exists; not the cause of action ‑ that is to be found in the common law ‑ but the right to proceed exists. Section 75(iv) deals with residence and of course residence is only residence at the time of the commencement of the suit, not at the arising of the cause of action. Therefore, the capacity for such an action under 75(iv) exists with respect to every claim by every citizen ‑ set aside corporations for the moment ‑ because of the intrinsic possibility that they may at a relevant time become a resident of another State and thereby be able to engage the diversity jurisdiction. I think the jurisprudence is that unless that is a colourable change of – in the United States, I do not think this Court has had cause to consider it – unless it is a colourable change of residence, section 75(iv) jurisdiction would be engaged.

Thus, if section 75(iv) supports an absence of immunity or denial of immunity in relation to such claims, it supports the submission for which we contend that implicit in the Constitution in respect of actions involving a breach of the constitutional requirement, a cause of action arising which involves that, the immunity of the States is denied.

McHUGH J: Could I go back to your section 64/79 argument. That argument treats section 64 as the superior provision to section 79, does it not? Assume for a moment that section 64 was not in the Judiciary Act, given what the Court has said about the word “court” in Robertson’s Case and some of us in Edensor, section 79 would apply here, would it not, if section 64 was not?

MR HUTLEY: Section 79 of the Judiciary Act, your Honour?

McHUGH J: Yes.

MR HUTLEY: Yes, certainly.

McHUGH J: Certainly, it would apply and it would be binding on a court exercising federal jurisdiction and that you would have to comply with the provisions of section 6 of the State Act?

MR HUTLEY: Assuming the constitutional – yes.

McHUGH J: Your argument then depends upon section 64 negativing that effect of section 79, does it not?

MR HUTLEY: Yes.

McHUGH J: Why should one read section 64 in that way? It is not a case a case such as Maguire v Simpson when you needed section 64 to impose some liability on the Commonwealth. Here section 79 has already done it, so to speak, in federal jurisdiction. Why does not section 64 really have nothing to say because a federal law has already spoken on the subject, namely, section 79?

MR HUTLEY: Your Honour, in our respectful submission, in this Court Bass held that section 64 was a law which otherwise provided for the purposes of section 79.

McHUGH J: That is obvious, it can do that. It did it in Dao, it did it in Moorebank and cases like that.

MR HUTLEY: Quite. Therefore, one has to determine the content of section 64 in relation to a federal suit, that is, what does it do in respect of a suit in federal jurisdiction. I cannot, in effect, pick up and then say section 64 does not speak to it, with respect, because one has to determine what section 64 does to know if it is otherwise providing. What we say is section 64 is clear on its terms. It has one precondition for its operation, that is that there be a suit and it be in federal jurisdiction.

McHUGH J: What I am putting to you is that section 79 in effect says the State is liable subject to compliance with section 6. You then are forced to say, I think, that section 64 takes that away in some way, destroys it.

MR HUTLEY: Because section 64, in our respectful submission, is a section which the equating effect is in respect of all the rights of the parties. One of the rights of a party is to sue in a court. It is the absence of that right derived from the immunity of the State.

McHUGH J: You have to say, I think, that section 64 not only governs substance of rights but also governs the right to proceed in this.

MR HUTLEY: Your Honour ‑ and we referred to them in our submissions, I will not ‑ but numerous cases in this Court have said that section 64 was in part enacted pursuant to section 78 of the Constitution as a law making laws conferring rights to proceed and, in our respectful submission, that is what it has done. When one sees it in historical context of the provisions in Farnell v Bowman, in our respectful submission, that is precisely what it has done.

Could I take your Honours shortly to Farnell v Bowman (1887) 12 AC 643. The sections there under consideration appear at pages 647 to 648.

GUMMOW J: What are we looking at Farnell v Bowman for?

MR HUTLEY: His Honour Justice McHugh was asking me about whether the right to proceed derives from section 64. What we say ‑ ‑ ‑

McHUGH J: No, there is no doubt about that and I have said it myself that section 64 does provide that right in most cases but what I was directing your attention to is, section 79 already having given that right, is section 64 to be read as taking it away or changing the conditions upon which section 79 gives it?

MR HUTLEY: No, your Honour. Section 64 is engaged at the moment of suit. Section 79 does not pick up in relation to this suit section 64, section 5 and 6 of the State legislation.

McHUGH J: That is because the effect you give to section 64.

MR HUTLEY: Quite.

McHUGH J: Anyway, I put it to you earlier but my question was really directed at whether or not 64 is to be given priority in the sense that you contend, given that 79 has already given you a right to proceed, but subject to conditions?

MR HUTLEY: Your Honour, in our respectful submission, 64 is an unqualified right to proceed which attaches at the moment of suit.

GUMMOW J: Jurisdiction at the moment of suit was conferred by section 39 of the Judiciary Act.

MR HUTLEY: Yes, your Honour.

HAYNE J: Is it a question of according 64 priority over 79? Section 79 concerns a set of which 64 is a subset, is it not? Section 64 concerns a subset of proceedings, namely, suits to which the Commonwealth or State is a party.

MR HUTLEY: Yes, your Honour.

HAYNE J: Is it therefore a question of according 64 priority over 79?

MR HUTLEY: No, your Honour. That may be the consequence, yes, because section 64, in our respectful submission, is the code for rights to proceed against the State at the federal level.

HAYNE J: Codes carry with them all sorts of baggage. Once we get into that language ‑ ‑ ‑

MR HUTLEY: Yes, your Honour. It is in the sense to the extent that your Honour asked me is it a priority. At the point of the inquiry we say once the suit is commenced rights to proceed are determined in section 64.

McHUGH J: The reason why I used the term “priority” is because 79 just does not apply generally to suits in federal jurisdiction, it only applies to suits or to cases to which they are applicable and therefore unless they are applicable then they have no effect whatever. So, as I think you conceded, if 64 was not there, 79 would operate and would impose those conditions on you.

MR HUTLEY: Yes, assuming that there is no constitutional ‑ ‑ ‑

McHUGH J: Yes, leaving aside the of the other argument.

MR HUTLEY: Its presence, in our respectful submission, creates a circumstance where you cannot pick up from section 5 and 6. Of course, they will only, as it were, practically be engaged, section 6, at the commencement of suit.

GUMMOW J: Wait a minute. This notion of unchanging meaning comes out of the concluding words, does it not, “in all cases to which they are applicable.”?

MR HUTLEY: Yes, your Honour.

GUMMOW J: Why is section 6 applicable?

MR HUTLEY: Your Honour, we submit it is not.

McHUGH J: I think his Honour is asking in relation to section 79.

MR HUTLEY: We submit it is not. That is precisely it. The question I was answering Justice McHugh was on the assumption that, in effect, section 64 was not present. Once section 64 is present, the position is that, in effect, they necessarily intersect, 64 and section 6, because if for no other reason section 5 which grants the right to proceed under the State Act only attaches at the moment of commencement of the suit because it is only at that point at the earliest that one can satisfy the requirement of section 6(1), namely, 6(1)(b).

Let it be assumed one satisfied section 6(1), the right to proceed at the State level only arises when you commence the suit. That is precisely the moment of course when section 64 attaches. You then have, in effect, two rights to proceed, section 64s and section 5s. They are inconsistent. That is, it cannot be, in our respectful submission, the case that if you do not comply, section 6 trumps section 64.

McHUGH J: Section 6 cannot trump section 64. The only question is whether or not ‑ ‑ ‑

MR HUTLEY: Per medium of section 79, I am sorry, your Honour; per the medium of section 79.

McHUGH J: The difficulty with sections like sections 5 and 6 is that they are directed to the courts of a State but in John Robertson it was said that was by the way, that you just did not read that literally.

MR HUTLEY: And Edensor has recently dealt with exactly the same. We accept that, your Honour. But that is why if one test it at the moment of complying with the section, section 6, one gets a complete clash. The oddity of this is that the submission to the contrary is because you do not comply, section 64 simply has nothing to say to the matter, as we understand the submissions put against us.

KIRBY J: How would one deal with a very restrictive State legislative provision, say, one that required notice to be given within a day of setting aside the constitutional validity of a payment?

MR HUTLEY: The issues such as considered by this Court in Antill Ranger and the like would immediately be engaged. You cannot, in effect, do indirectly what you cannot do directly. You cannot really seek to expropriate somebody’s cause of action because that in effect is the same as the law, that is a law with respect to the same subject matter, as the law which infringed the constitutional prohibition.

KIRBY J: Do you argue that here?

MR HUTLEY: No, your Honour.

CALLINAN J: Mr Hutley, does anything turn on the difference in language in section 5 between section 5 and section 6? Section 5 speaks of “be sued” and section 6 speaks of a “right of action”.

MR HUTLEY: Yes, one is in the passive voice.

CALLINAN J: Might it not be that you cannot sue unless you have a right of action so therefore section 5 has no application unless you have complied with section 6, rather than putting it the other way. I know how you put it: you talk about a condition precedent to an action but another way of looking at it is that you have no action.

MR HUTLEY: If your Honour goes to section 6, Your Honour will see in 6(1)(a) there is a reference to the cause of action accruing. That is a cause of action which accrues at relevantly common law. The question then becomes, and the only question to which this is directed relevantly, is the immunity to suit of the Crown in right of Western Australia. In our respectful submission, the right to sue the Crown in right of Western Australia is given by section 5 in the passive voice, subject to X the Crown may be sued.

CALLINAN J: Is there not an argument that the right to sue is only given if there is a cause of action, and section 6 provides that there is no cause of action.

MR HUTLEY: No, your Honour, because the right of action in section 6(1) is different to the cause of action referred to in 6(1)(a) because the cause of action accrues and is different to the right of action. It does not say that no cause of action arises in section 6(1). It says, “no right of action lies”. The right of action, your Honour, is in effect the corollary of the engagement of section 6/5, namely that the Crown may be sued, that is that entails that someone thereby acquires a right of action.

CALLINAN J: You say in section 6(1) the meaning really is no right to bring your cause of action.

MR HUTLEY: Yes. No right to sue in court.

CALLINAN J: I am not absolutely sure that is the necessary construction at the moment. I do not understand what you ‑ ‑ ‑

McHUGH J: Is not a simple way of putting your argument, based on 64 and 69, to simply to say ‑ you do not worry about section 5 giving you the right to proceed. It is section 64 that gives you the right to proceed in federal jurisdiction. If section 5 and 6 of the State Act had never been enacted no one would doubt that section 64 was the applicable provision and section 79 would have nothing to say, and section 64 being the provision that gives you your right to proceed and governs your rights, then when you turn to section 79 the relevant law is not applicable because ‑ ‑ ‑

MR HUTLEY: It has nothing to say to the matter.

McHUGH J: It has nothing to say.

MR HUTLEY: Your Honour, that is the alternate way we put it. We say, either there is a clash or, alternately, it simply does not speak to the subject matter.

McHUGH J: Yes.

MR HUTLEY: Because in effect it simply has not engaged.

CALLINAN J: Well, what is the alternative, Mr Hutley?

MR HUTLEY: Sorry, your Honour?

CALLINAN J: I understand entirely what Justice McHugh has put to you. It seems to me at the moment ‑ it has probably got a lot in it ‑ what is your alternative?

MR HUTLEY: My alternative? I would embrace what his Honour ‑ ‑ ‑

CALLINAN J: I know, but you said there was some alternative.

MR HUTLEY: Your Honour, there would be an argument that absent section 64, section 6 would apply. There is an argument ‑ ‑ ‑

CALLINAN J: You cannot say absent section 64. It is there.

MR HUTLEY: Quite. Your Honour, it is the question as to whether there be a valid ‑ ‑ ‑

KIRBY J: Subject to it being validly there. There is an argument you have to meet.

MR HUTLEY: Yes. The question is whether there was a conflict or not. With respect, we accept what your Honour says.

McHUGH J: I thought much of your argument was directed in some way to giving 79 priority and then destroying its effect, but I would have thought the simple way of doing it was to go straight to 64 saying, “That governs the whole case and 79 does not pick up sections 5 and 6 because they’re not applicable, given the terms of section 64”, any more than State Limitation Acts have been applicable in other cases.

MR HUTLEY: Your Honour, yes. That is the way we put it, that, in effect, 64 gives the right of action. Section 6 simply does not speak to the circumstance, and so it goes.

McHUGH J: Sections 5 and 6, on one view, have nothing whatever to do with the case.

MR HUTLEY: On one view.

KIRBY J: You said at the very outset that there were four levels of generality. At some stage I would like to understand, as it were, the big picture, the grand concept that is beginning to emerge in the questions you have just answered. One would have thought you would start with the simplest solution which is the one Justice McHugh just elicited from you, like drawing a tooth, and then if necessary get into ‑ there is of course a snake on that and that is the validity of section 64.

MR HUTLEY: Your Honour, we say the validity of section 64 simply just never arises because it, in effect, has its internal safety mechanism.

KIRBY J: Well, there is a lot of paper being spent in this case attacking the validity.

MR HUTLEY: Yes.

KIRBY J: On the theory that you are propounding for the simple ‑ ‑ ‑

MR HUTLEY: Yes.

KIRBY J: This is the Exocet solution. You just go straight through 64.

MR HUTLEY: Yes. Your Honour, the arguments put against us is not, as we understand it, that your Honour’s Exocet example is beyond constitutional power. It is because that section 64 could apply to the States on its terms in a vast and different array of circumstances outside your Honour’s Exocet. Our submission is that simply does not arise for consideration.

KIRBY J: In this particular case. Because on any view this is simply procedural and, therefore ‑ ‑ ‑

MR HUTLEY: Quite. But the argument is put, as we understand it, you cannot, as it were, avoid the constitutional argument because section 64 either binds the States or it does not, and one has to look at it in its total possible operation. What we say is that is wrong. One simply should deal with the particular case, but in any event section 64 has its own saving operation within it because it only operates as nearly as possible, and possibility must include constitutional possibility and, therefore, the issue should be determined on a case‑by‑case basis to determine to the extent, if at all, it can apply to the States.

McHUGH J: I think it might have been a forensic mistake to start with, your analysis of section 5 and 6, Mr Hutley.

MR HUTLEY: We learn, your Honour.

McHUGH J: Justice Gummow earlier was asking you what it had to do with it. You might have been better going straight to 64.

MR HUTLEY: We learn.

KIRBY J: We are always giving helpful little hints.

MR HUTLEY: Your Honour, at some point one has to not leave everything for reply because ‑ ‑ ‑

CALLINAN J: I am interested in sections 5 and 6.

MR HUTLEY: Your Honour is too kind to me. Justice Hayne has not spoken. I will take that as he is not going to be kind to me.

HAYNE J: That would be a fair supposition.

MR HUTLEY: I thought as much.

GUMMOW J: It is said against you that ‑ New South Wales seem to come here to argue that it is part of the essential functions of government which cannot be…..by 64, to collect taxes unconstitutionally and not have to pay it back.

MR HUTLEY: And also require notice.

GUMMOW J: Yes.

HAYNE J: Keep unconstitutional tax.

MR HUTLEY: Yes. Your Honour, all we are concerned here is with a notice provision. Now, at the end of the day if there was a final hearing of this matter someone may argue that there is no cause of action for the recovery of these imposts because it is essential to the State to be able to hold onto unconstitutionally obtained ‑ ‑ ‑

GUMMOW J: That just cannot be right.

MR HUTLEY: Well, your Honour ‑ ‑ ‑

GLEESON CJ: Until the developments in the law relating to money paid under mistake of law, the rubric under which your right of action was put was extortion, was it not?

MR HUTLEY: Yes. Under colour of office effectively. Your Honour, we submit that the whole of the submissions, with all due respect of the Attorney‑General of New South Wales about the essentiality of this, proceeds on an assumption first about a matter which is simply not for consideration, irrespective of its merits at the end of the day. What one is here concerned with is whether a notice provision is essential to necessary - to the operation of the State.

Now, if your Honours were to entertain a reopening of the Evans Deakin Industries decision which, as we understand it ‑ ‑ ‑

GUMMOW J: Why would that matter for you?

MR HUTLEY: We say at the end of the day ‑ ‑ ‑

GUMMOW J: One way or the other.

MR HUTLEY: ‑ ‑ ‑it would not, but the way as we understand it is ‑ ‑ ‑

McHUGH J: It does for the Commonwealth, the way the Commonwealth put it.

MR HUTLEY: Yes.

McHUGH J: The Commonwealth says it does not apply until after the suit has commenced.

MR HUTLEY: And one has to find, as it were, the right to commence that suit elsewhere. We would submit that the Commonwealth’s argument proves too much because an adjectival right, as they define it, must include the right to approach a court. So even on their argument, we would submit, at the end of the day section 64 would extend to the right to proceed. Now, it is only if that occurs and your Honours come to the conclusion that we do not have a right to proceed under section 64, we do not have a right to proceed derived from the covering clause 5 in the Constitution, that one has to then search where the right to proceed could arise. That would seem to then send the Court back to the consideration of section 58 of the Judiciary Act because if those submissions are correct, that can be the only source of a right to proceed against the State in federal jurisdiction in tort and contract other than section 6 and the Crown Suits Act. We would submit that that gives us a right to proceed on the basis that we fall within contract.

Now, the current status of sections 56 and 58 in the jurisprudence of this Court is inconsistent with that, having regard to the decision of this Court in Breavington v Godleman, though that decision assumed, in our respectful submission, that Evans Deakin was correct and the true source of rights to proceed lies in section 64. If that be wrong, in our respectful submission, then section 58 should be revisited as giving a right to proceed against the State in a claim in tort and contract in federal jurisdiction.

KIRBY J: There is no doubt, is there, that “person” in 58 includes an inanimate person?

MR HUTLEY: Yes, your Honour. Comes from the Interpretation Act I think, your Honour. Yes, your Honour. Now, that, in our respectful submission ‑ ‑ ‑

KIRBY J: Why can an inanimate person be a person for that Act but a corporation not be a resident for the purposes of the Constitution? One of these days we will have to have another look at that too. It seems, with respect, to be a somewhat absurd and out‑of‑date notion.

MR HUTLEY: Your Honour, this is, as it were, the ultimate fallback position, that if all else fails one really should revisit 58. One has to then ask the question, “Where does the right to proceed in federal jurisdiction derive from in respect of tort and contract?” It must, in our respectful submission, have been intended if that is the true construction, in the way it is contended by the other side, of the Judiciary Act that a right to proceed was intended to be given by section 58.

HAYNE J: Much is turning on this branch of the argument on what you mean and what baggage you attach to this notion of “right to proceed”. At the moment your argument makes no reference in this branch to what if any significance is to be attached to the combination of 76(i) and 77(iii) plus 39(2) of the Judiciary Act in combination themselves, conferring jurisdiction on State courts in particular kinds of matter. What is it that then invites attention to a further consideration which you put under this rubric, a “right to proceed”?

MR HUTLEY: The question which arises, your Honour, is whether the State could, in respect of a suit invoking such jurisdiction, say that it is immune from suit ‑ ‑ ‑

GUMMOW J: In a 76(i) case.

MR HUTLEY: In a section 76(i) case. Now, your Honours, the difficulty with implying from the conferral of section 76(i) of a removal of immunity may be that there was no necessity so to do, but it may be to be inferred that once done the immunity is denied by virtue of that fact. The difficulty arises that there are a number of expressions in this Court, that the mere capacity to confer jurisdiction does not lead to a conclusion necessarily that the conferral has an effect upon the content of that which is the subject of the conferral.

HAYNE J: But here where we are dealing with 76(i) jurisdiction and one of the integers of the Federation about a matter arising under the Constitution or involving its interpretation, what is it that injects this notion of immunity? What is the immunity that is injected? What is its source?

MR HUTLEY: The immunity is said to be the immunity of the Crown from being ‑ I am sorry, the State in right of Western Australia ‑ ‑ ‑

HAYNE J: But there is the point, is there not, Mr Hutley?

MR HUTLEY: Yes.

HAYNE J: That we have slid from notions of Crown immunity to equate that to immunity of a State in connection with constitutional construction in jurisdiction routed in 76(i). Now, those slides are the slides to which I invite attention. Are they properly made?

MR HUTLEY: In our respectful submission, no. In our respectful submission, once 76(i) jurisdiction be engaged through the medium of section 39, the Court is exercising federal jurisdiction in no relevant sense is it the Crown in right of States court in exercising that jurisdiction, and no immunity should subsist.

HAYNE J: Because I think if you unpick the notion of immunity not very far, you find the need, do you not, to accommodate those notions in some way with constitutional fundamentals and that accommodation is not readily achieved in a way that would leave immunity applying in this set of circumstances, or at least it is not apparent to me yet how that would be so. It is that premise for this branch of your argument which seem to me to require a little testing.

MR HUTLEY: Yes, your Honour, but a fortiori when one is engaged in a section 58 case ‑ ‑ ‑

HAYNE J: Well, 58 is not engaged in this aspect of the matter at all because notions of suit in contract and tort absent constitutional considerations might invoke notions of immunity that would be much more readily accommodated.

HAYNE J: As your Honour please. Anyway, that is our submission. Once one moves ‑ ‑ ‑

GUMMOW J: I would have thought it was your primary submission actually.

McHUGH J: You get it out of, it seems to me, section 30 of the Judiciary Act in terms of “a matter” and section 39(2) in respect of proceedings in the State courts. So the combination of section 30 of the Judiciary Act, 39(2) and 76(i) and 77(iii) would seem to give you the right to approach the Court subject to some argument that somehow section 78 by necessary implication requires some special law on the subject, section 78 of the Constitution.

KIRBY J: But that is in permissive terms, it “may make”.

MR HUTLEY: Yes, your Honours.

GLEESON CJ: Mr Hutley, I suppose it would be a frightful oversimplification to say that when section 90 provides that the power of the Commonwealth Parliament to impose duties of excise is exclusive, it implies that if a State imposes a duty of excise it has to give it back.

MR HUTLEY: In James v The Commonwealth it was held that section 92 ‑ it was not implied from the fact that if a State imposed an interference with freedom ‑ ‑ ‑

GLEESON CJ: This is in a sense a little more direct.

MR HUTLEY: Yes.

KIRBY J: Now, I saw in a footnote Kruger said that there are no implied causes of action in the Constitution.

MR HUTLEY: Difficulties arising of course with regulating such cause of action, your Honour, because if it is an implied right to recover that unlimited ‑ ‑ ‑

McHUGH J: That is why I asked you yesterday about Bivens ‑ ‑ ‑

MR HUTLEY: We do not rely on Bivens, your Honour. We say that the cause of action we have, which is perfectly good, arises at common law.

GUMMOW J: Yes, but it does not just arise at common law. It arises ‑ ‑ ‑

MR HUTLEY: Informed by the ‑ ‑ ‑

GUMMOW J: As informed by what the Chief Justice was just putting to you.

MR HUTLEY: Your Honour, if the Court were to imply, as it were, a constitutional right of recovery, one would then have to in effect investigate the capacity to regulate that right of recovery. We do not make a submission that there is such an implied constitutional right of recovery, your Honour. We say it arises in the common law informed by the Constitution.

KIRBY J: Just on that point. Is it true that Kruger says that ‑ does Kruger contradict this very simple but, at least on the face of things, arguable constitutional doctrine?

MR HUTLEY: Your Honour, I would have to check as to whether it is inconsistent with that, your Honour.

KIRBY J: That is said, I think, in the Commonwealth’s submission, I am not sure.

McHUGH J: But James v The Commonwealth 62 CLR denies it in terms, does it not?

MR HUTLEY: Yes. So one would have to, in effect, in our respectful submission, reinvestigate that jurisprudence and ‑ ‑ ‑

GUMMOW J: I think in the end we are just debating forms of action.

MR HUTLEY: Yes. Your Honour, whatever may be under the Constitution, we have a right at common law and that is the right we seek to enforce.

GUMMOW J: Not just at common law, because at the root of it is Marbury v Madison.

MR HUTLEY: Of course, your Honour. Those are our submissions.

McHUGH J: It may be of some importance in some cases because as in James you are forced to sue for trespass to your goods or trespass generally or in another case for money had and received, whereas if you can anchor the right in the Constitution it may be much simpler and you may not have procedural difficulties that you have in other cases.

KIRBY J: It does seem an odd result that a State by its laws can prevent your recovering moneys which were unconstitutionally extracted.

MR HUTLEY: Your Honour, we do not make any submission other than that sections 5 and 6 of the Crown Suits Act do not impact upon our right to proceed.

GLEESON CJ: Thank you, Mr Hutley. Yes, Mr Solicitor for Western Australia. I suppose it is convenient that the Solicitor for the Commonwealth should go last amongst the interveners.

MR BENNETT: I am content with that, your Honour.

GLEESON CJ: Thank you, Mr Solicitor.

MR MEADOWS: If it please the Court, in our submission section 64 of the Judiciary Act does not enable a party to bring an action against the Commonwealth or a State in federal jurisdiction. In other words, it does not confer rights to proceed.

McHUGH J: That is contrary to what Justice Isaacs said in Griffin’s Case 80 years ago, is it not? He specifically said, if I remember rightly, the whole purpose of section 64 was to do away with Crown immunity.

MR MEADOWS: In our submission, that is not the correct position. What section 64 does is to govern the rights of the parties once a suit has been properly constituted or commenced. How can a provision, which governs the rights between parties in a suit, be said to give the right to commence that suit? In our submission, it is a precondition to the operation of section 64 that there be a properly constituted suit.

McHUGH J: Does that stand with Evans Deakin, Mr Solicitor?

MR MEADOWS: In our submission, it does because in Evans Deakin the proceedings were under section 75(iii) of the Constitution which were said to give the right to proceed, and the proceedings were commenced under that right to proceed.

If I could just refer the Court to the Commonwealth v Anderson in support of the proposition which I am now putting.

KIRBY J: It would be helpful to me, Mr Solicitor, if at the very outset you could as it were sketch just in a few words ‑ I am not asking you to take up much time ‑ the big picture of your submission. In other words, we have had at the very end of Mr Hutley’s submissions a descending level of four and the Court threw in a possible fifth level. Now, could you just give us ‑ ‑ ‑

MR MEADOWS: The first aspect of our submissions will be directed to the requirement for a properly constituted suit before section 64 can be said to be applicable.

KIRBY J: Really, conceptually, that is the section 64 argument.

MR MEADOWS: Yes.

KIRBY J: That is a precondition to section 64.

MR MEADOWS: Yes.

KIRBY J: So you tackle it first on section 64. What comes next?

MR MEADOWS: Secondly, we would deal with the argument ‑ in the context of that first argument then we have to deal with the effects of section 75 through to 78 of the Constitution and the impact that that has on the application of the Crown Suits Act, as we would put it. The second matter that we propose to address is in relation to the argument that because this is a matter which involves issues which are peculiar to government, that that precludes the ability of the appellant to rely on section 64.

KIRBY J: That is another sub‑issue of section 64.

MR MEADOWS: It is, your Honour. The next aspect of our argument will be to the effect ‑ and it again involves section 64 ‑ that section 64 of the Judiciary Act in fact would impose the notice requirement in section 47A of the Limitation Act, in an action as between subject and subject, which provides for a similar notice requirement. The fourth aspect of the argument that we propose to put was in relation to the validity of section 64 of the Judiciary Act.

In addition, of course, we would propose to address the question whether it is open to the State to impose a restriction in the form of section 6 of the Crown Suits Act before it was amenable to an action, even one based in proceedings to recover money which was exacted as a result of an invalid tax.

If I could just quickly address that point. Our argument would be that certainly the State could not preclude an action for recovery in those circumstances, but it is open to the State to lay down procedural requirements, whether they be reasonable limitation provisions or notice provisions of the kind in section 6.

CALLINAN J: Do you say that these are procedural provisions, section 6?

MR MEADOWS: We say that section 6 is substantive in effect. It has procedural components to it in that certain processes have to be followed, but if there is a failure to follow it, then the effect of the section is to extinguish the cause of action.

CALLINAN J: That is still an open question because of what was said by the majority in Evans Deakin at 263. Is that right?

MR MEADOWS: Yes, your Honour.

CALLINAN J: You have to say that really, do you not?

MR MEADOWS: We do, yes. I am about to take the Court to 263, in fact.

KIRBY J: Is that the entire sketch of the horizon that you are going to encompass?

MR MEADOWS: Yes, your Honour.

KIRBY J: Because it leaves out a matter which at least is of interest to me and, I think, other members of the Court relating to the juristic quality of the State.

MR MEADOWS: Yes.

KIRBY J: This was mentioned in Mewett by Justice Gummow and me and in Bass I mention in a footnote a case which, at least, is important to me which I did not know when Mewett was decided. It is the case of Byrne v Ireland [1972] IR 241 in which it was held that Ireland, when it was the Irish Free State, a constitutional monarchy, was a separate juristic person that did not pick up all of the baggage of Crown immunity, and that is the thought which is behind the point that has been recurring this morning. The States of Australia are not to be confused with the Crown.

MR MEADOWS: With due respect, your Honour, in our submission, not only is it the case that the States are to be confused with the Crown, but the constitutional arrangements in this country require that when you look at the term “State” in the Commonwealth Constitution that it is referring to the State in the context where the Crown and the State are synonymous, particularly in ‑ ‑ ‑

KIRBY J: I do not want to take you off your argument, but you will remember that in Mewett Justice Gummow and I pointed out that though the Crown is there in respect of Chapters I and II, it is not there in respect of Chapter III.

MR MEADOWS: I appreciate that that is what your Honours said in Mewett, but in our submission that is not a correct analysis and that when one looks at Chapter III and particularly a provision such as section 78, that where the word “State” is used in that section it is talking about the Crown in the right of the State because ‑ ‑ ‑

KIRBY J: It does not say that, and in Ireland they held it did not mean that and I do not see why it is not so also in Australia, but I will not take you off your course, but in your indication of your horizon you did not mention the matter which, at least, is very important to me and I would be grateful if, at some stage, you will give some attention to it.

MR MEADOWS: Perhaps it would be opportune for me to deal with the issue now as to why we would submit that section 78 in particular, which is the section under which “rights to proceed” may be given against the State, refer to the immunity of the Crown and that when the word “State” is used in that section, it is in the context of a right to proceed and thereby removing the immunity of the Crown. Perhaps the starting point in that exercise ‑ ‑ ‑

GUMMOW J: The immunity of the Crown deriving whence and in respect of what?

MR MEADOWS: Well, the immunity of the Crown from suit, that it could not be impleaded in its own courts.

GUMMOW J: Yes, what sort of actions, whereabouts?

MR MEADOWS: At the time of the Convention Debates, for example, it was seen to be in regard to all matters, particularly matters in contract or in tort.

KIRBY J: That just might have been a mistake.

GUMMOW J: Actions between States, actions between the Crown?

MR MEADOWS: There were no States, of course.

GUMMOW J: Well, exactly. Actions between the Crown, immune, are they?

MR MEADOWS: Between the Crown?

GUMMOW J: Actions between the States.

MR MEADOWS: Of course, they are provided for specifically in the Constitution.

GUMMOW J: Right. Section 76(i) is there, too, and that is at the root of this litigation, is it not?

MR MEADOWS: Well, I accept that as well, but that nevertheless, in order for a subject to have a right to proceed against the State in relation to ‑ ‑ ‑

GUMMOW J: An invasion by the State of the Constitution.

MR MEADOWS: Yes.

GUMMOW J: By failure to observe section 90.

MR MEADOWS: There is no denying that, your Honour, but the fact of the matter is that an order ‑ ‑ ‑

GUMMOW J: Just a minute, a notion that could not exist at common law because of Diceyan notions about the parliamentary ‑ ‑ ‑

MR MEADOWS: I accept that as well.

GUMMOW J: Could not be right. They never had to think about it in those…..

MR MEADOWS: But, nevertheless, the immunity of the Crown existed and ‑ ‑ ‑

GUMMOW J: And was increased, you have to say.

MR MEADOWS: Yes.

GUMMOW J: Attaching to the new subject matter.

MR MEADOWS: Yes, your Honour.

GUMMOW J: Why would that be consistent with the constitutional scheme and so prejudicing Australian citizens?

MR MEADOWS: Well, because it was always envisaged that the Parliament would confer rights to proceed and that is the way in which it was structured. I was going to take your Honours to the starting point which I would suggest is the debates at the Convention in 1898.

KIRBY J: Do not forget that these were Australians living in colonies and, therefore, expressing their understandings in terms of the position of subjects of the Crown in a Crown colony.

MR MEADOWS: They took it for granted, your Honour.

KIRBY J: Exactly.

MR MEADOWS: No, no.

KIRBY J: They created a new nation with a Commonwealth and a State.

MR MEADOWS: But they took it for granted that the States would have Crown immunity.

GUMMOW J: That is the question.

KIRBY J: Did what they create set that consequence?

MR MEADOWS: That is why they inserted section 78.

McHUGH J: Well, they may not have necessarily intended Crown immunity. You have to remember the United States has a doctrine of sovereign immunity and the United States Supreme Court seems to be still plagued with cases of sovereign immunity. In fact, almost every time I read the United States reports there seems to be a case on whether this or that body is entitled to sovereign immunity of the States. So it may be that some immunity was contemplated, as section 78 might indicate, but it does not necessarily mean it was a Crown immunity which might mean that it has to be worked into the whole constitutional scheme.

KIRBY J: All of this is examined by Justice Walsh in the Irish case, and he was truly one of the great judges of Ireland and he goes through the American experience and comes to the conclusion for Ireland. I do not see why a conclusion for Ireland, when it was a constitutional monarchy, but an independent dominion, is not equally applicable to Australia.

MR MEADOWS: Well, if I could provide the answer to that, your Honour, it is because of the way in which Chapter III is structured, and Chapter III was structured in a way which required, ultimately, for the Parliament to confer rights to proceed and, in particular, in relation to matters which fell within section 76.

I was taking your Honours to the debates on 1 March 1898 where it is quite clear there that when the original drafting in relation to what became section 78 was being considered that it was being included in order to enable rights to proceed to be given in respect of the States because the States were seen as having Crown immunity. If I could just quote from what Mr Glynn, who moved the relevant provision, which was then clause 73A and it was to provide:

Proceedings may be taken against the Commonwealth or a state in all cases, within the limits of the judicial power, in which a claim against a subject might be maintained.

That was as it was then drafted, and he went on to say:

I might mention, for the information of the non‑legal members of the Convention, what the general law is as regards remedies against the Crown. There is a right of action against the Crown upon a petition of right presented by a subject, in all cases where there has been a breach of contract by the Crown, or where moneys, and, I believe, latterly, lands which belong to a subject have got into the possession of the Crown. But there is no claim by way of petition of right for damages for a tort or injury not arising out of contract.

It is quite clear then that if one reads on that the reference here to the State in the proposed clause equated the State with the Crown in terms of immunity.

KIRBY J: Mr Isaacs seemed to have some questions:

Why is this provision more necessary in this Constitution than any other?

I mean, we just have to be a little careful reading what, with all respect, Mr Glynn thought about this.

MR MEADOWS: It is not just Mr Glynn, and I am not going to take your Honours to every passage of it, but throughout this debate it is quite plain that those that were attending the Convention regarded the State as having Crown immunity.

GUMMOW J: Is there any discussion in the Convention of the Eleventh Amendment to the United States Constitution?

MR MEADOWS: Not that I noticed, your Honour.

McHUGH J: I think there is.

MR MEADOWS: But in this passage?

McHUGH J: In 1654 column 2 there is a short reference to it, is there not?

KIRBY J: And at 1655 there is a reference to the United States Constitution.

McHUGH J: It talks about the Eleventh Amendment, just below the reference to “Burgess’s Political Science”.

MR MEADOWS: Yes, I beg your pardon, your Honour. Yes.

KIRBY J: But you have this going for you, that there is no doubt section 78 was enacted and was meant to do work and it contemplated that, at least, there would be some laws that would govern proceeding against the Commonwealth or a State, but it contemplated those laws would have been made by the Federal Parliament, not by the State Parliaments, and if that is so ‑ ‑ ‑

MR MEADOWS: Well, we do not quarrel with that, your Honour. What we say is that the effect of section 79 is to apply the State provisions.

HAYNE J: The clause that was being debated was a self‑executing clause.

MR MEADOWS: It was at that time, yes.

HAYNE J: Yes, but it was not thought necessary to provide for that in the Constitution. Rather it was thought necessary to provide that Parliament might make laws on that subject.

MR MEADOWS: That is so, your Honour, but the corollary to that, we would submit, is that absent laws by the Parliament, then Crown immunity would be applicable.

HAYNE J: …..for the debate seemed to be that but for this provision the Constitution would be set at nought. I just wonder really how much we get out of this debate, Mr Solicitor, when it is about a different provision on a premise which is later denied, effectively denied by the form the Constitution ultimately takes.

MR MEADOWS: But there can be no other basis for the insertion of section 78 other than the removal of Crown immunity.

KIRBY J: Not necessarily. You are so blinded, and we have all been so blinded by Crown immunity that we just inserted it whereas it does not say that. It just says:

laws conferring rights to proceed against the Commonwealth or a State –

This is a new nation with new political entities and, as Justice Hayne was saying earlier, if you do not have Crown immunity you still may need provisions for bringing proceedings against government because of the special peculiarities of government.

MR MEADOWS: That would be to deny the historical context, with all due respect.

KIRBY J: No, to acknowledge that a new historical context was created by our Constitution.

MR MEADOWS: Well, whether it be Crown immunity or sovereign immunity, as Justice McHugh has mentioned, we would submit that the effect of section 78 is that there was a need for rights to proceed to be conferred.

McHUGH J: The Americans have themselves in a terrible mess. They are giving sovereign immunity to harbour boards now in a most recent case I looked at about six months or so ago.

MR MEADOWS: Given what has happened in regard to section 76, of course, and the provisions of section 30 and section 39(2) of the Judiciary Act, the issue of jurisdiction is addressed and in relevant context rights to proceed are conferred.

If I can just take a minute to point out one or two things about the nature of the State of Western Australia in terms of its constitutional arrangements. In Western Australia it is Her Majesty who makes laws by and with the advice of the Legislative Council and the Legislative Assembly.

KIRBY J: Well, that may be a courtesy to Her Majesty, but it is the State of Western Australia which is the polity.

MR MEADOWS: But the polity of Western Australia embraces or includes the sovereign.

KIRBY J: Yes.

MR MEADOWS: And when, if you look at section 2 of the Constitution Act of Western Australia ‑ ‑ ‑

KIRBY J: It includes the Queen. The sovereign in Australia is a disputed question.

MR MEADOWS: Well, it talks in terms of Her Majesty.

KIRBY J: Yes, as Queen.

MR MEADOWS: It does and section 2(2) talks about:

The Parliament of Western Australia consists of the Queen and the Legislative Council and the Legislative Assembly.

We also have provisions which establish the Governor as the Queen’s representative in Western Australia and that role of the Queen is entrenched through section 73(2) of our Constitution Act.

KIRBY J: By “entrenched” you mean there must be a referendum to change it?

MR MEADOWS: Yes, your Honour. In the present context, if you look at section 12B of the Business Franchise (Tobacco) Act 1975 it will be seen:

Fees payable under this Act for licences are debts due to Her Majesty and payable to the Commissioner.

So the actual impost over which the appellant has sued was an impost that was payable to Her Majesty.

CALLINAN J: You have section 7 of the Australia Act too, have you not?

MR MEADOWS: Yes, your Honour.

CALLINAN J: It clearly indicates the role of the sovereign in the States, does it not?

MR MEADOWS: It does, your Honour, and in section 3 of the Crown Suits Act, as has already been adverted to, it provides that the reference to “the Crown” is a reference to “the Crown in right of the Government of Western Australia”.

KIRBY J: Not the State.

MR MEADOWS: No, that is so, your Honour.

KIRBY J: The Limitation Act does refer to the State.

MR MEADOWS: It does. That is in section 37A, and it is useful, we would submit, to refer to some of the earlier cases to which your Honour was referring and if I could just refer to the judgment of this Court in The Mayor, Councillors and Citizens of the City of Essendon v Criterion Theatres where what was under consideration there was the meaning of the phrase “the Crown” in the Local Government Act in Victoria and each of the judges in that matter, apart from Justice Rich, held that the Crown meant the Crown in the right of the State of Victoria.

KIRBY J: But that is just a matter of construing a peculiar provision in a State Act.

MR MEADOWS: It is, but it does illustrate, your Honour, that in the context of the times, at the time of the enactment of the Constitution and subsequently, it was a well‑understood concept that “the Crown”, when referred to in legislation, meant the Crown in the right of the State.

KIRBY J: The question is, was it a well‑misunderstood concept? It certainly is very common. I am not denying that at all.

MR MEADOWS: What we are saying is that in this context the two words are synonymous.

GLEESON CJ: Well, you see in Evans Deakin at pages 262 and 263 the majority joint judgment speaks of section 64 as producing the result that laws apply:

as would apply if the Commonwealth were a subject instead of being the Crown.

MR MEADOWS: Yes, your Honour. That is the essence of our argument. Our submission is that in the present context the terms “the Crown” and “the State” can be used interchangeably. I should also direct the Court’s attention to what was said in Sue v Hill 199 CLR 462 and to the passages at pages 498 to 502. So, in our submission, the concept of the Crown is not something which is foreign to the Australian Constitution and ‑ ‑ ‑

KIRBY J: Of course it is not. It is there in terms. The Queen is there in terms. I think there were 64 references to the Queen in our Constitution. There is no question about that. The issue is whether it is there in Chapter III in the creation of the separate polity of the State. It has been assumed that it is there.

MR MEADOWS: In our submission it is there, and if one took proceedings, say, under section 75(iv) where a resident of another State sued the State and it was an action in tort, that would be clearly regarded, in our submission, as an action against the Crown in the right of the particular State.

GLEESON CJ: Mr Solicitor, if you go to the Crown Suits Act 1947 of Western Australia and consider the application of section 5 in a purely State context – forget any question of federal jurisdiction – what would be the consequence in terms of the operation of section 5 if the expression “the Crown” there did not mean the State of Western Australia?

MR MEADOWS: Well, that makes my point, your Honour, that the two expressions are synonymous in this context.

KIRBY J: Yes, but what you do in your own jurisdiction is your business. What you do in federal jurisdiction is the Constitution’s business.

MR MEADOWS: Certainly the Constitution has an overriding role to play, but also it is for the Commonwealth Parliament in certain instances to govern the arrangements which might be applicable in proceedings in federal jurisdiction.

Might I then return to where I began and deal with the question of the application of section 64 of the Judiciary Act, and I was taking the Court to the Commonwealth ‑ ‑ ‑

KIRBY J: Just as a final footnote on that last issue mentioned, Justice Walsh in the case of Byrne which I mentioned at 272 says that the fundamental mistake has been that the theory of English constitutional law was that the Crown:

the King was the personification of the State –

whereas in Ireland he says, in the Irish Free State they were part of the British monarchy. It was a constitutional monarchy. It was part of the Constitution that all authority was:

derived from the people of Ireland –

Now, in our Constitution there is, in the covering clauses and in the statements anterior to the Constitution, as well as, at least on one view in the history of what preceded the Constitution, the participation of the people of Australia. It talks of the people and of the electors. That was mentioned in Sue v Hill, so the question is whether we have just had blinkers on for a long time and made the mistake which in 1972 Justice Walsh in the Supreme Court of Ireland said had been made about the nature of the Irish polity. It is an easy enough mistake to make, especially if a lawyer is brought up in the old ways. It is a question of whether we have made that error and whether it is time to correct it.

McHUGH J: The difficulty of accepting Justice Walsh’s point of view is that the preamble declares that the people of the various colonies:

have agreed to unite in one indissoluble Federal Commonwealth under the Crown of the United Kingdom –

so “the Crown” is superimposed.

KIRBY J: But by the will of the people.

GLEESON CJ: Although 17 per cent of them who actually voted.

KIRBY J: I thought it was Justice McHugh in Bropho who said the ultimate foundation of sovereignty in Australia was the will of the people.

GUMMOW J: Anyhow, the preamble says “under the United Kingdom Crown and under the Constitution”.

MR MEADOWS: I accept that, your Honours.

GUMMOW J: So there was a tension there right from the beginning.

KIRBY J: Anyway, I took you off your argument.

MR MEADOWS: Yes, you have, your Honour.

KIRBY J: You were going to more familiar territory.

MR MEADOWS: I was about to take the Court to Commonwealth v Anderson 105 CLR 303 and, in particular, to what was said at pages 310 and 311 by Chief Justice Dixon and at 310 ‑ ‑ ‑

GUMMOW J: What was the issue in Anderson? It was really a landlord and tenant case.

MR MEADOWS: It is. It was to do with ‑ ‑ ‑

McHUGH J: The Supreme Court had no jurisdiction in cases under the Landlord and Tenant (Amendment) Act.

MR MEADOWS: That is right. There was a tribunal set up for that purpose.

McHUGH J: Yes. The question was whether the Crown in right of the Commonwealth could bring an action in ejectment in the Supreme Court in respect of it.

MR MEADOWS: That is right, your Honour. But the passages to which I refer at pages 310 deal with the effect of section 64 and its application and Chief Justice Dixon said, and this is about a third of the way down the page:

But in any case the essential condition of the application of s 64 is the existence of the suit to which the Commonwealth is a party and as a result of s 39(2) of the Judiciary Act 1903‑1959 that includes a suit in the Supreme Court in which the Commonwealth is plaintiff.

McHUGH J: Yes, but what does that mean? Since Evans Deakin it cannot mean that you had a legally enforceable cause of action the moment before you filed your writ, can it? The same in Evans Deakin. It means no more than you have a suit in which the Commonwealth is a party. Now you try to distinguish Evans Deakin by saying it turned on 75(iii) whereas this turns on 76(i) and 39(2), but there is a matter under 39(2). What is the difference?

MR MEADOWS: The difference is that in order for section 64 to apply, in those circumstances there must be a properly constituted suit that has been commenced.

McHUGH J: But the proposition is loaded with “properly constituted”. What do you mean by “properly constituted?

MR MEADOWS: I say that in the context of a compliance with necessary procedural or other requirements such as those which are to be found in section 6. In addition, at page 311 – and this is just below halfway down the page – he says:

In the application of s 64 of the Judiciary Act you begin with the existence of the jurisdiction and of the suit brought by or against the Commonwealth or State.

So you have to have a suit on foot, we would submit, before section 64 can apply.

McHUGH J: But Evans Deakin gives a very special meaning to “suit” in that context, does it not, because the suit had no content before section 64 applied. The Commonwealth only had a liability under the Subcontractors Act after 64 operated. That was why, in Dao’s Case, when I was on the Court of Appeal I said that section 64 could not operate unless you had a cause of action independently of section 64, but that is now long rejected. It was rejected in Dao, rejected in Evans Deakin.

MR MEADOWS: Yes. Well, Evans Deakin, of course, said that in determining the rights of the parties, you could have regard to section 64. This is outside the context of a suit. But in terms of its application to the States, then we would say that section 64 comprehends the existence of a properly constituted suit before it has application.

Even if one goes to Evans Deakin 161 CLR 254, one can see in the judgment of Chief Justice Gibbs, Justices Mason, Wilson, Deane and Dawson at page 263 – and this is in the final paragraph:

The argument for the appellant in the present case takes as its starting point the proposition that “the essential condition of the application of s 64 is the existence of the suit to which the Commonwealth is a party.

And reference is made to Commonwealth v Anderson, Maguire v Simpson and China Ocean. They go on to say:

The correctness of that proposition cannot be doubted; it appears from s 64 itself that there must be a suit to which the Commonwealth is a party before s 64 commences to operate, at least directly.

McHUGH J: Yes, but if you look at 264, about point 5 of the page, their Honours say the Supreme Court was given jurisdiction by “39(2) of the Judiciary Act and s 75(iii) of the Constitution.” Why in this case is not the jurisdiction given by 30 and 39(2) of the Judiciary Act and 76(i) of the Constitution?

MR MEADOWS: Well, jurisdiction has been given, I accept that, but the right to proceed is what you have to look for.

McHUGH J: There was no right to proceed independently of section 64 in Evans Deakin.

MR MEADOWS: With respect, there was and it was said to flow from section 75(iii).

McHUGH J: What was the right? What sort of a right was it? I mean, 75(iii) just talks about the Commonwealth being a party.

MR MEADOWS: I know it does, your Honour, but the judgment to which I have referred in Evans Deakin makes it clear that it was 75(iii) which gave the right to proceed, whereas when you are dealing with section 76 where jurisdiction can be conferred, you then also have to find elsewhere the right to proceed.

What the Court held in Evans Deakin was that the right to proceed is inherent in the conferral of jurisdiction under section 75(iii). If I take your Honours back to Evans Deakin at page 264, in the middle of the page in the second paragraph:

The Supreme Court is given jurisdiction to entertain a suit to which the Commonwealth is a party by the combined effect of s 39(2) of the Judiciary Act and section 75(iii) of the Constitution. When an action is brought against the Commonwealth in the Supreme Court the condition for the operation of s 64 is satisfied: see The Commonwealth v Anderson. Once the suit is commenced the substantive rights of the parties shall be, as nearly as possible, as in a suit between subject and subject.

So, it was section 75(iii) which was said to give the right to proceed.

McHUGH J: I think you are putting a gloss on it. You may be right but there is nothing there about the right to proceed.

MR MEADOWS: But, with respect, it can be the only way in which that particular passage can be viewed because they have said at the outset that in order for section 64 to apply you have to have a suit and you have to find therefore a right to proceed.

McHUGH J: That only means you have to have a plaintiff and a defendant in which one party is the Commonwealth, then you have a suit. The law is made applicable governed by 64, 79.

MR MEADOWS: That is so but that is once the suit has been instituted. That analysis we would see as being reflected in what Justices Gummow and Kirby said in Mewett 191 CLR 471, in particular at page 550:

As Brennan J put it in Georgiadis, the liability is created by the common law. In respect of that liability, the Constitution applies to deny any operation to what otherwise might be doctrines of Crown or executive immunity which might be pleaded in bar to any action to recover judgment for damages in respect of that common law cause of action. The constitutional denial of the operation of any immunity doctrine in respect of matters in which this Court has original jurisdiction under s 75 of the Constitution is carried forward when, under s 77 of the Constitution, the Parliament makes laws with respect to the matters mentioned in s 75, whether to define the jurisdiction of any other federal court or to invest any court of a State with federal jurisdiction.

McHUGH J: What about the last sentence in that second paragraph on 551:

A law which confers jurisdiction with respect to matters arising under a law made by the Parliament (s 76(ii)) may give a new substantive right against the Commonwealth or a State.

Why is that not the effect of section 30 and section 39(2)?

MR MEADOWS: That is a matter of conferring jurisdiction. It comes to rights to proceed. One has to go to section 78.

HAYNE J: What is the content of this distinction that you draw between conferral of jurisdiction and conferral of a right to proceed?

MR MEADOWS: The conferral of jurisdiction gives the Court the jurisdiction to adjudicate on the matter.

HAYNE J: A matter joined between identified parties?

MR MEADOWS: Yes, your Honour.

HAYNE J: What then is the content of the right to proceed?

MR MEADOWS: The right to proceed is to enable those parties to enliven the jurisdiction of the Court by the initiation of process.

McHUGH J: Your argument has to be that section 64 does not abolish Crown immunity. That is done exclusively by sections 56 to 61 of the Judiciary Act, apart from, you say, 75(iii), by implication, so far as the Commonwealth is concerned?

MR MEADOWS: I would not limit it to sections 56 to 61 because you then have to have consideration to section 79 which may pick up State laws which have that effect. The essence of what our argument is about section 78 is that its function is to enable the Commonwealth Parliament, when it legislates to confer jurisdiction in relation to those matters specified in section 76, they being the matters within the judicial power or being matters within the judicial power, to make provision conferring rights to proceed against the Commonwealth or the States. This is the way in which the provision was viewed by this Court in Commonwealth v New South Wales 32 CLR 200 at page 201.

McHUGH J: It is only Chief Justice Knox though, is it not?

MR MEADOWS: Well, no, with respect, your Honour. We would derive some comfort for this proposition from what was said by Justices Isaacs, Rich and Starke at pages 214 to 215. If I could take you first though to what Chief Justice Knox did say at pages 206 to 207. If I could read the passage beginning at the penultimate paragraph:

It is evident, indeed it was not disputed, that a claim to recover damages in respect of a collision between two vessels is a “matter” within the meaning of sec 75. It is apparent also that in this “matter” the Commonwealth is a party. It follows that by sec 75 original jurisdiction is conferred on the High Court in this case, and “jurisdiction” means “the authority which a Court has to decide matters that are litigated before it or to take cognizance of matters presented in a formal way for its decision” –

citing Halsbury.

This power is conferred by the Constitution itself on this Court to take cognizance of this matter. Any legislation by Parliament directed to conferring this power would, therefore, be as superfluous as legislation by Parliament to restrict the limits of the jurisdiction would be ineffective. The argument for the applicant based on sec 78 of the Constitution ignores the essential distinction between matters which come within the terms of sec 75 and those which come within sec 76. In respect of the former class the jurisdiction of the High Court is independent of, while in respect of the latter class it is dependent upon, Parliamentary enactment. The result of acceding to this argument would be in effect to remove sub‑sec iii from sec 75 and place it in sec 76.

If I could take your Honours then to pages 214 to 215. I will only be reading from a passage on page 215 starting a third of the way down the page:

Much ground remained to be covered within the ambit of the judicial power of the Commonwealth before there existed the same facility of suing the Crown as exists in most of the States within their own jurisdiction. To this, sec 78 is directed, and by that section the Commonwealth Parliament is empowered to confer, in respect of all matters within the Federal judicial power, rights to proceed that are not already conferred by sec 75. Observe the expression is “rights to proceed.” It is not “the right to proceed,” which is really the sense which the defendant’s argument applies to sec 78. We do not read sec 78 as directed to mere procedural regulations which affect not any right to proceed, but the method of procedure. That is covered by other sections, as, for instance, sec 51(xxxix). But we do read it as merely supplementary to what the Constitution, so far as sec 75 extends, did for itself in relation to the matters there mentioned. It enables the Commonwealth Parliament, if it thinks right, to do the same in other matters within the judicial power.

GUMMOW J: I cannot quite see, going back to what Justice Hayne put to you, why 39(2), in association with 76(i), is not to that degree implementing 78 as well. Otherwise, you would have to read the statute as misfiring because matters arising under the Constitution, obviously….. involving States would not work without some other provision made somehow linked directly or expressly to 78.

MR MEADOWS: That, we say, is the structure of Chapter III, that you have this step where you have in section 75 matters where ‑ ‑ ‑

GUMMOW J: But the consequence of what you are saying is that 39(2), insofar as it implements 76(i) in the State courts has misfired.

MR MEADOWS: No, we do not say that at all. It confers jurisdiction.

McHUGH J: But nothing more.

MR MEADOWS: That is right, without a right to proceed.

McHUGH J: Without a section 5 or 6 equivalent, there is nothing. You could not bring an action against a State in a tort action.

MR MEADOWS: The Commonwealth could under section 78 provide for the right to proceed.

GUMMOW J: But the matter is already there. The matter arises under the Constitution. It is not a question of a party. The matter is already there, and you have to say it is not there because of something not done in 78.

MR MEADOWS: Except that section 75 talks about “matters” and section 76 talks about “matters”. It is a question of conferral of jurisdiction when one comes to section 77. The Parliament is given the power to confer jurisdiction in respect of matters under section 76.

GUMMOW J: “Jurisdiction” means authority to decide something.

MR MEADOWS: It does but it does not really go to the question of whether there is a right to proceed.

McHUGH J: But that is involved in the term “matter”.

MR MEADOWS: A matter is a controversy between parties.

McHUGH J: Yes, between a citizen and a State, and that is what section 39 does. I have always thought that unless you can read 78 in some way as requiring some special statute on the subject, which I do not think you can, then 39(2) gives itself a right to proceed in the matters to which it applies.

MR MEADOWS: Section 39(2) is the section which confers jurisdiction.

McHUGH J: But it also refers to a matter arising under the Constitution.

MR MEADOWS: Yes, which, as I said, is a matter of controversy as between parties.

McHUGH J: Yes.

MR MEADOWS: Normally a court would be able to adjudicate on such matters except in the context of where you are talking about the State or the Commonwealth where rights to proceed have to be conferred under section 78.

HAYNE J: And the Court has an authority to decide a particular controversy but somehow it cannot because there is no right to proceed.

MR MEADOWS: Because the litigant does not have the right to open the door.

McHUGH J: But he must have for there to be a matter. He must have standing of some ‑ ‑ ‑

MR MEADOWS: It is not an argument about standing, your Honour.

McHUGH J: But standing is intricately involved in questions of matter. It may be you can have a matter without standing, but normally you will not have a matter unless you have standing.

MR MEADOWS: Once again, I would suggest that standing is a matter going to a right to open the door of the Court.

McHUGH J: Exactly, that is involved in the matter arising under the Constitution.

MR MEADOWS: That is what we say “rights to proceed” mean in section 78. The notion is that rights to proceed must be conferred.

McHUGH J: But supposing two ordinary citizens want to have an argument about a constitutional provision. Where do they get the right to proceed otherwise than under 39(2) and…..the constitutional provisions?

MR MEADOWS: The citizens do not have an immunity which has to be lifted in order for proceedings to be brought against each other, whereas the Crown does.

HAYNE J: Which drives us back to this notion of the content of immunity in this particular constitutional setting.

MR MEADOWS: Here we have a case which, according to my learned friend, is based in a common law claim which, admittedly, has its foundation in an unconstitutional tax and we would say that in that context the Crown immunity would apply because it is an action for money had and received at common law on the basis which has its foundation in an unconstitutional tax.

McHUGH J: I do not say it offensively, but you have subverted the Constitution, you have taken their money and now you will not give it back.

MR MEADOWS: Well, we will give it back.

GLEESON CJ: I suppose you would say that they have passed it on to taxpayers and, as somebody said about the Order of the Garter, you could say about Mr Hutley’s claim that there is no damn merit about it.

MR MEADOWS: The passing‑on aspect is a defence for another day, perhaps, because there are provisions in our Limitation Act which address the issue of passing on. But just coming back to the point, we do not shut the door at all. We open the door in section 5, but we condition it upon certain things being complied with, and reasonable conditions.

McHUGH J: And you say, “Gotcha. You didn’t give your notice in time”.

MR MEADOWS: In our submission, a reasonable requirement of that kind - and we would submit that there has been no argument that it is unreasonable - can be placed as a barrier to entry into the door.

GUMMOW J: No, it cannot. It can only be done by some federal law because we are in federal jurisdiction.

MR MEADOWS: And it has been by virtue of section 79.

McHUGH J: But does it really take you very far anyway, because even Western Australia must concede that section 79 ‑ ‑ ‑

MR MEADOWS: Even Western Australia, your Honour? That is a dangerous statement in this jurisdiction, your Honour.

McHUGH J: ‑ ‑ ‑ picks up sections 5 and 6 and makes them apply. So, even assuming you are right about everything you have said so far, why does not section 64 then operate so as to destroy the conditional limitations that have been imposed by 79 in combination with sections 5 and 6?

MR MEADOWS: If you have got in the door by virtue of sections 5 and 6, then you have a suit on foot and section 64 can apply. You do not have to worry about rights to proceed at that stage because you have already proceeded under the right.

McHUGH J: Yes, I know, but what I am saying to you is that section 64 then says – you say section 79 does not get your foot in the door because you have not complied with the two conditions?

MR MEADOWS: Yes, and we say that as long as that requirement is reasonable, that can be put up as a barrier. We do not bar the action only after a failure to comply with a reasonable notice requirement.

GLEESON CJ: So you are not, in a practical sense, attempting to validate invalid legislation?

MR MEADOWS: No, we are not, and we would not suggest that it could be done and Antill Ranger stands as clear authority for that, but it was always recognised that it was permissible to impose a reasonable limitation period.

GLEESON CJ: I think it was recognised in Antill Ranger.

MR MEADOWS: It was, and also subsequently, I think, in Royal Insurance that it would be possible to impose constraints of that kind.

GLEESON CJ: Partly because of the consideration just mentioned; that is, that typically, if not invariably, these taxes will have been passed on to others.

MR MEADOWS: Yes, and there are other implications, of course.

McHUGH J: …..in your budgets.

MR MEADOWS: It could have catastrophic effects on budgets and revenue raising generally.

CALLINAN J: Some might say it is not your fault, or it is not the State’s fault, that they are in this position.

KIRBY J: Others might say you should not make unconstitutional taxes.

MR MEADOWS: Yes. Some people would suggest that we were sucked into this franchise ‑ ‑ ‑

GLEESON CJ: Let us not seek to apportion blame.

MR MEADOWS: But just coming back to the substance of it, we submit there is a difference between section 75 and section 76 and the difference arises because the jurisdiction created by section 75 is a creature of the Constitution itself and cannot be derogated from by Commonwealth legislation. If there was to be a denial of any right to proceed against the Commonwealth, this would entirely abrogate the jurisdiction conferred by section 75(iii).

GLEESON CJ: Is that a convenient time, Mr Solicitor?

MR MEADOWS: Yes, your Honour.

GLEESON CJ: We will adjourn until 2 pm.

AT 12.46 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.03 PM:

GLEESON CJ: Yes, Mr Solicitor.

MR MEADOWS: May it please the Court. I have just about finished what I wanted to say about the ambit of section 64, but just to conclude on that topic, we would say that section 64, which assumes the existence of a suit, is not a provision which confers rights to proceed against a State. It is therefore necessary to look elsewhere for a provision in Commonwealth legislation which does confer rights to proceed against the State. The only place where that can be found, we would submit, is in section 79 of the Judiciary Act, which brings into play sections 5 and 6 of the Crown Suits Act. The acceptance of our submissions does not require the Court to reconsider Evans Deakin; all it requires is a recognition of the difference between sections 75 and 76 and recognition that the judgment in Evans Deakin was confined to the operation of section 75.

GUMMOW J: Does this mean, Mr Solicitor, you are at odds with South Australia?

MR MEADOWS: I do not believe so, your Honour.

GUMMOW J: They have arguments about invalidity, do they not?

MR MEADOWS: Yes, we are going to argue for invalidity. We are assuming for the purposes of this argument that section 64 is valid. Might I say in that regard that I have had a discussion with my learned friend, the Solicitor for South Australia, over lunch, and we have agreed that he should present the argument on invalidity in order to save time rather than me covering the ground, and him then having to cover the same ground.

GLEESON CJ: Thank you.

MR MEADOWS: So far as section 6 of the Crown Suits Act is concerned, we would submit that it has an operation which is independent of section 5. If you look at section 5, you will see that it is, “Subject to this Act”, so that it operates subject to section 6 of the Crown Suits Act, but you will also note that section 6 is not made subject to section 5 or to any other provision of the Act. So section 6 is not cast in terms which suggest that it is only a proviso to section 5 or that it has no independent operation. In contrast to section 5, which refers to the Crown suing and being sued, section 6 refers to a right of action against the Crown.

GLEESON CJ: Is the corollary of that that section 79 may pick up section 5 but not section 6?

MR MEADOWS: Vice versa, we would say - or vice versa.

GLEESON CJ: Or vice versa.

MR MEADOWS: In an appropriate case, it may pick up both. So section 6, in addition to specifying conditions which relate to the abrogation of the State’s immunity from suit, can also have an independent operation and it operates, we would submit, to extinguish or bar any right of action against the State which arises otherwise than by virtue of section 5 of the Crown Suits Act. The appellant correctly concedes, we would say, that section 37A of the Limitation Act would apply to this case and, we would say, likewise sections 37B and 37C which deal with issues of passing on.
Our contention is that if that be the case, consistently with my learned friend’s concession, what is it then that prevents section 6 from also operating, it being another provision with procedural requirements and the imposition of a limitation in the form of an extinguishment or barring of the action in the event of a failure to comply?

Section 6 of the Crown Suits Act would also apply in circumstances where a right of action was conferred by a State statute, independently of section 5 of the Crown Suits Act. We would say that even if a right to proceed against the State were to be implied from the Constitution or were to be given by other Commonwealth legislation, section 6 could still be picked up by section 79 and require a notice to be given. Our submissions in this regard are supported by those of the Commonwealth in paragraphs 5 and 6 of their submissions.

Before I leave this topic, may I simply refer quickly to Bass v Permanent Trustee Company, which is relied on by my learned friend, and simply point out that the provision in that case and the provision in Farnell v Bowman were fundamentally different from section 64, in that they specifically conferred a right to sue. In the case of Bass, the relevant provision was section 5(2) of the Crown Proceedings Act, which spoke in terms of:

Civil proceedings against the Crown shall be commenced in the same way, and the proceedings and rights of the parties in the case shall as nearly as possible be the same –

et cetera. So there is a conferral of a right to proceed built into that provision which does not exist in section 64. In Farnell v Bowman, the provision in question began with these words:

The petitioner may sue such nominal defendant at law or in equity in any competent Court –

et cetera. So the conclusion which my learned friend seeks to draw from those cases and the application of section 64 of the Judiciary Act just does not stand up.

Might I now turn then to our next submission, which deals with the situation of this case and the potential application of section 64, and to make the point that here we are dealing with a matter which involves issues which are peculiar to government. Section 64 requires the court to hypothesise a suit which is the same in all respects as the matter before it, except that the suit is between subject and subject, and to determine what the rights would have been in that hypothetical suit. Now, this is not a difficult task where the suit is one which can normally arise between subject and subject. However, the position is different, we would say, where what we are talking about is something which involves issues which are peculiar to government. These difficulties, we would submit, in trying to identify the rights which would exist in the hypothetical suit as between a subject and subject demonstrate that the provisions of section 64 are impossible to apply in a case such as this.

GUMMOW J: This turns on the phrase “as nearly as possible”, does it not, in the section?

MR MEADOWS: Well, that would explain why “as nearly as possible” has been inserted into the section, but you do get to the point where it is impossible to do what is “nearly as possible” where, because of the nature of the issues that are involved, it just cannot be done. The clear example, as we will come to, is where a defence which would only be available to the State could not be applied if you were looking at a hypothetical suit between subject and subject, because that ‑ ‑ ‑

HAYNE J: What sort of defence do you have in mind?

MR MEADOWS: Well, take a limitation defence, as a simple example. It would not be available to a ‑ ‑ ‑

HAYNE J: A limitation that is available only to the State.

MR MEADOWS: To the State, yes. So, in an action between a subject and subject, that limitation defence would not be available.

KIRBY J: Yes, but the higher command is of section 64, so that you just have to make it. Unpalatable though it may be to the State, you have to make it “as nearly as possible” the same. That is the command of Parliament.

MR MEADOWS: But if there are defences which are available to the State, or issues even, which would only arise in an issue where the State was a party, then it does not become something which can be done under section 64 in a suit as between subject and subject, or “as nearly as possible”.

KIRBY J: It may be a play on words, but it may be that in that circumstance doing it “as nearly as possible”, you are still obeying section 64 but excising a particular defence, because doing it “as nearly as possible”, the rights of the parties have to include that particular defence. You cannot ignore 64. It is there in a statute of the Parliament.

MR MEADOWS: Well, it has been said in this Court – and we say, correctly – that where you are dealing with something which involves a peculiar function of government, then section 64 does not have any application.

GUMMOW J: Are there any cases decided on that basis in this Court?

MR MEADOWS: If I could refer to what your Honour said in The Commonwealth v Western Australia 196 CLR 392 – the Mining Act Case. If I could take you to page 438, your Honour said at the foot of page 438, the last line:

Further, here the Commonwealth acquired the freehold and leasehold titles for defence purposes and was thus performing a function peculiar to government. The phrase “as nearly as possible” does not embrace such a situation. This conclusion is not foreclosed by The Commonwealth v Evans Deakin Industries Ltd.

GUMMOW J: Nobody else said that, though.

MR MEADOWS: No, they did not, your Honour. But it is true that in Evans Deakin, at pages 264 to 265, the Court there left open that as an issue, and in Austral Pacific Group Limited v Airservices Australia (2000) 203 CLR 136 in the judgment of your Honours Chief Justice Gleeson, Justices Gummow and Hayne, we would perceive observations are made which are consistent with the approach which your Honour took in the Mining Act Case. The passage that I am referring to is at page 144, where it was said at the top of the page:

It is true that the adjustment required by s 64 is qualified by the phrase “as nearly as possible”. The effect of this is that the section cannot operate to alter the nature of respective rights in relation to different subject matters. The nature of the subject matter involved in The Commonwealth v Western Australia rendered s 64 inapplicable.

CALLINAN J: I suppose one possible defence might be that ostensible authority which might be shown in a case between citizens or corporations, would be available – there would be an answer to ostensible authority, perhaps, in a case against the State. Authority to do an act might be conditioned upon all sorts of things but would not apply, perhaps, to corporations acting on behalf of the corporation.

MR MEADOWS: I would have to admit of that possibility, your Honour.

CALLINAN J: That might be another instance of a defence of which you ought not to be deprived, you would say.

MR MEADOWS: Yes. We would say that we should not be but, more importantly, we would say we should not be deprived of defences or from raising issues which only a government could raise.

CALLINAN J: Well, that might be one, that you just cannot have ostensible authority in certain circumstances when governments are doing things that might be available in other situations where governments are not involved.

GUMMOW J: Auckland Harbour Board might be another example, too.

MR MEADOWS: I missed that, your Honour.

GUMMOW J: The Auckland Harbour Board situation. That is to say, it would work the other way around. It cannot be asserted against the government seeking to recover the money that the government is estopped in the same way as estoppels might exist between private parties.

MR MEADOWS: Yes, your Honour. And this might sound a rather absurd statement to make, but it is only governments that can impose invalid taxes, and that of course colours the whole of this proceeding in that what is being sought to be recovered is an invalidly imposed tax. That raises issues ‑ ‑ ‑

KIRBY J: It has the air of a bootstraps argument.

MR MEADOWS: Well, please be ‑ ‑ ‑

CALLINAN J: That is only because you own the prisons.

GLEESON CJ: But it is not only governments that can receive money paid under a mistake of law.

MR MEADOWS: No, that is true, your Honour, but it is only governments that could be asked to disgorge money on a basis of money had and received where an invalid tax has been imposed.

GLEESON CJ: So it all depends on the level of generality or particularity at which you describe the nature of the claim.

McHUGH J: What about the Tape Manufacturers Case?

MR MEADOWS: Well, that is a good example, your Honour, of where you might have a situation where an individual was collecting a tax on behalf of the government which was ultimately to be paid to the performing rights association, as I remember.

KIRBY J: Was that not the case with the retailers in this very instance? They were sued on an indebitatus count.

MR MEADOWS: They were, but they did not have the ability ‑ ‑ ‑

KIRBY J: They sued on that?

MR MEADOWS: The defendant in that case, which I believe is the appellant in this case, did not have the ability to rely on the defences or to raise the issues which a government would be able to raise. The analogy which my learned friend seeks to draw in his submissions – and this is in paragraph 30 of the appellant’s reply – to this being similar to someone seeking to recover money had and received which had been paid under a commercial franchise licence agreement, is not to the point. If the Act which was held to be invalid in this case had simply been characterised as imposing a franchise licence fee, as opposed to a tax on goods, then the States would not have lost in Ha. So you cannot draw that analogy.

So what we are saying is that the fact that the moneys which are sought to be recovered here are moneys which have been exacted under an invalid taxing Act does have relevance to the rights which will be identified for determination in the case between the claimant and the State. It raises issues – and this has already been touched on in argument – about compulsion, whether payments were made under protest, considerations as to whether or not an action is in fact available for the recovery of an invalidly imposed tax. Now, it is not necessary for this Court to determine these issues in the context of this appeal, but it is necessary to recognise that they are out there and will fall for determination in any action between the appellant and the respondent. They are not matters which would be available as defences or issues that would be up for consideration in an action between subject and subject.

We refer in our submissions to the various considerations of the issue about recovery of invalidly imposed taxes and we refer to the judgment of the House of Lords in Woolwich [1993] AC 70 and to paragraphs 177 and 198 where the House of Lords recognised a right to recovery of invalidly imposed taxes.

We also refer to Air Canada v British Columbia where Justice Wilson in that case also recognised such a right, whereas on the other hand, Justice La Forest declined to recognise such a right and, in fact, held that no right should lie, except in circumstances where oppression could be demonstrated.

If I could take your Honours to what he had to say at page 196 of the judgment which is in [1989] 59 DLR (4^th) at page 161, and at page 196, after discussing the various issues, at the bottom of the page he concluded:

All in all, I have become persuaded that the rule should be against recovery of ultra vires taxes, at least in the case of unconstitutional statutes. It seems best to function from the basis of that rule with exceptions where the relationship between the state and a particular taxpayer resulting in the collection of the tax are unjust or oppressive in the circumstances.

Et cetera. Now, that of course we would submit is an issue which would be alive in any proceedings which might be litigated between the appellant and the respondent for the recovery of this tax.

CALLINAN J: So you could get an injunction but you could not recover the tax.

MR MEADOWS: Yes, your Honour, or you could get a declaration as to the invalidity of the tax but you could not recover it.

CALLINAN J: An injunction to prevent any further imposition.

MR MEADOWS: Yes, yes, your Honour. Of course, there are the issues which are addressed in Mason v New South Wales to which my learned friend has referred. We would suggest that perhaps a better analogue for this case with reference to the principles referred to in Mason’s Case is Bell Bros v The Shire of Serpentine-Jarrahdale 121 CLR at page 137, but that does involve questions about compulsion and payments under protest and those sorts of issues. In addition to that, in this particular case we have the provisions of the Western Australian Limitation Act, in particular sections 37B and 37C which deal with passing on and other issues to which I will not take you, but they will be relevant. They are referred to in our submissions in paragraph 37, footnote 43, and there are also some provisions of our Property Law Act which may also be relevant in the proceedings. So there are issues which are peculiar, we would say, to the fact that the defendant in the proceedings is the State.

Now, obviously it is not necessary for the Court in this appeal to determine the existence or the availability of these particular defences. However, it is clear, we would say, that the position of the State is relevant even if the traditional test of compulsion is adopted and no special defence is recognised.

Now, to apply section 64 to this hypothetical situation would be to require all these matters to be discounted. The rights of the parties could not be determined under the same rules as in an action for restitution between subject and subject. So, for those reasons, we would submit that section 64 cannot have any application to a suit of this kind.

McHUGH J: What about the rule of law? In the first ‑ ‑ ‑

MR MEADOWS: That sounds like a bootstraps argument.

McHUGH J: No, Sir Owen Dixon said in the Communist Party Case that the rule of law is one of the assumptions upon which the Constitution is founded. I mean, the approach of Justice La Forest in the Air Canada Case seems to set the rule of law at naught. Governments can impose invalid taxes, you cannot get it back. That does not strike me as a proposition this Court ought to accede to, speaking for myself, anyway.

MR MEADOWS: There is, as I have endeavoured to suggest without going into it in full detail, a respectable authority for the view that invalid imposts may not be recovered unless you can demonstrate certain things as a precursor to your recovery.

McHUGH J: Yes, but a lot of the ideas about the recovery of money unlawfully paid to or unlawfully obtained by governments was set in an era when money was not recoverable for a mistake of law. Since Davids Holdings that has gone.

MR MEADOWS: I appreciate what your Honour says but we would submit that those rules are still applicable and they are ones which are available to the State in resisting a claim for recovery.

KIRBY J: Your theory is it is not negative to the rule of law, it is simply the playing out of the rule of law in your particular case.

MR MEADOWS: Yes, and it is consistent with authority.

CALLINAN J: You are further saying if there is a finding against you in the appeal you will be deprived of the right even to argue with that proposition.

MR MEADOWS: We would be, or if section 64 were to be applied in the manner in which it has been suggested.

GUMMOW J: Why is that?

MR MEADOWS: Because, as I understand it, it would be saying that if section 64 were to be applied to this case and you take the hypothetical suit between subject and subject, a subject could ‑ ‑ ‑

GUMMOW J: No, it is applied to this case to get rid of the time limitation. That is all Mr Hutley is on about.

MR MEADOWS: At this level?

GUMMOW J: The rest of your argument is then in terrorem

MR MEADOWS: No, it is not, your Honour, it is about whether section 64 can have any application to a case of this kind.

Could I now turn to our next submission and that is to address the question of the application of the notice requirement in section 47A of the Limitation Act. If the Court rejects our submissions about section 64 and its application, then it will be necessary to determine what the rights in a hypothetical suit between subject and subject would have been. Of course, for the purposes of this argument, we are assuming that section 64 is valid. What we would say is that in the hypothetical suit which assumes that a subject can impose an invalid tax which can the subject of an action for recover, what section 64 of the Judiciary Act would require is that the rights of the parties be governed by any statute of limitations which would be applicable if both parties were subjects.

Maguire v Simpson 139 CLR 362 is authority for that view. I refer in particular at pages 376 to 377 and pages 391, 402 and 406. So in the hypothetical suit between subject and subject for declarations as to and the recovery of an invalidly imposed and collected tax, we would submit that section 47A of the Limitation Act of Western Australia would be applicable. In assessing this question ‑ ‑ ‑

GUMMOW J: How does it become applicable? How does it get picked up?

MR MEADOWS: Section 64 requires that the action be determined ‑ ‑ ‑

GUMMOW J: Does that assume section 64 was designed to assist governments, not citizens?

MR MEADOWS: No, it does not, your Honour.

GUMMOW J: Yes, it is, because you are reading up 47A which in its terms does not apply to governments, does it?

MR MEADOWS: Section 47A?

GUMMOW J: Yes.

MR MEADOWS: It refers to people collecting under the authority of an Act or the intended execution of an authority under an Act. So that could include – let us use the word “agencies” that are not the Crown. Section 47A expressly excludes the Crown from its operation, and so ‑ ‑ ‑

GUMMOW J: You say that means the State?

MR MEADOWS: Yes, we do.

GUMMOW J: Action here is brought against the State, so 47A would have no operation – forgetting about the second part of the government official?

MR MEADOWS: Section 47A would have an operation because you have to treat the State as being a subject, and a subject who is collecting money under the authority of an Act or in the intended execution of an Act.

GUMMOW J: All I am putting to you is that you are using 64 to read up 47A to prejudice the citizen and advantage the State.

MR MEADOWS: Yes.

GUMMOW J: I wonder if that was in mind in putting section 64 in there in the first place.

MR MEADOWS: We would submit that that is the effect of section 64, that it is not just the subject that gets the advantage or suffer the burden of some provision which would apply between subject and subject, so does the State.

GUMMOW J: You have to pick up 47A anyway in the first place and put it into federal law, have you not?

MR MEADOWS: We would say section 64 does that, and it requires you to treat the State as a subject and if a subject who was suing a subject in circumstances to which section 47A applies, then the State as the hypothetical subject is entitled to the benefit of section 47A. This is where we would say that if the appellant seeks the benefit of section 64, then the appellant must also accept its burden. One of the burdens is that if the circumstances are such that section 47A applies, as we say it clearly does in the hypothetical suit, then the appellant must also bear the burden which section 64 creates. If it please the Court, they are our submissions.

GLEESON CJ: Thank you. Yes, Mr Solicitor for South Australia.

MR SELWAY: Your Honours, we submit that section 64 is invalid in its application to the States because it goes too far. It goes too far in two ways. Firstly, it extends to proceedings by a State rather than against a State and, secondly, it extends to rights other than rights to proceed. That much, as we understand it, is conceded that section 64 in its terms goes beyond the terms of section 78 of the Constitution.

KIRBY J: We are not worried here by the “by”, are we?

MR SELWAY: No, your Honour, but the argument we put is that the problem with section 64 is it cannot be read down. It cannot be severed, except to take the State out of it. That is the only way it can be severed without some distributive interpretation of it which, as we understand it, is what the Commonwealth argues for.

For the purpose of this submission, it makes no difference what the source of any immunity the State enjoys might be, or even if there is one. That is because our submission is based on the question of whether it is section 79 or section 64 that applies. There is no doubt that the Commonwealth does have power to legislate in relation to rights to proceed. The question is: has it gone too far and what is the relevant provision that does it?

So long as it is not denied that any right to proceed from whatever source is subject to regulation by Commonwealth Parliament, which may be important if one identifies the right as being somehow contained in the Constitution, so long as it is accepted that that right is subject to regulation by the Commonwealth Parliament, then it makes no difference to our submission whether the immunity comes from the Constitution or elsewhere. Further, we would say our argument would need to be addressed so long as it is conceded that the Commonwealth Parliament can regulate the right.

Having said that, we do wish to make a short point, if we can, about the role of the Crown and the Constitution. We say that the Crown is part of the constitutional structure, and that is clear enough from sections 1, 2, 61 and so on. We say there is a necessary tension in the Constitution between the role of a single Australian Crown and the federal structure and Chapter III is important in the working out of that tension. It is accommodated by looking at ‑ ‑ ‑

KIRBY J: And also the tension arises between the express mentions of the Queen and the Crown and the creation of these new constitutional polities, the Commonwealth and the State.

MR SELWAY: The Federation necessarily required the creation of the polities.

KIRBY J: I think Victoria was very upset with the word the “Commonwealth” precisely because it had memories of a non‑crowned polity.

MR SELWAY: Your Honour, the concern we have is that one, if you like, goes too far in looking at, if you like, parts of the accommodation and ignoring other parts. We say that the accommodation is explained in Engineers, that the Crown’s legislative executive and judicial powers are exercised by different agents in different localities or in respect of different purposes in the same locality in accordance with the common law or the statute law there binding the Crown. The importance of saying that that is the accommodation is that it becomes an important factor in working out how the Federation works.

There are only two national institutions within the Constitution. One of them is the Crown and the other is this Court. The role of the Crown and of this Court serves to distinguish our Constitution in some of its aspects from, for example, the United States Constitution.

KIRBY J: That is very flattering of you but there is, after all, the Parliament of the Commonwealth and there is the Executive Government of the Commonwealth.

MR SELWAY: Your Honour, with respect, they are federal bodies. This Court has a role that goes beyond a federal – if you like, a Commonwealth Government role. Its role is to look after jurisdiction that comes from States, given its appeal structure.

KIRBY J: Part of the federal judicature?

MR SELWAY: It is, your Honour, but it is beyond that. It has a role that goes beyond it. It is part of the reason then that one can say ‑ ‑ ‑

KIRBY J: So does the Senate on one view.

MR SELWAY: Yes, on perhaps one view, your Honour.

CALLINAN J: Except this Court is the final Court of appeal for the States.

MR SELWAY: Yes, your Honour.

CALLINAN J: And in that respect it has elements of being a State institution.

MR SELWAY: And it is fundamentally different from the United States Supreme Court.

GLEESON CJ: This is the federal Supreme Court, and its role of final Court of appeal for more than 80 years was in the judicial committee of the Privy Council.

MR SELWAY: Yes, your Honour, but that is no longer the case and, as I say, this Court is one of the national institutions, the Crown being another. I do not make this point for any particular purpose but to say that, for example, section 61 of the Commonwealth Constitution, which looks in its terms very similar to the United States Constitution, actually has a different meaning and effect, because responsible government has to be understood against a background of the Crown.

So we would say in relation to Chapter III, there is no reason why one should be looking at US sovereign immunity law when the immunity is of the Crown - are a sufficient answer as to what was intended and what section 78 was intended to do.

GUMMOW J: Immunities of the Crown are itself a fictional notion, are not they – derived from the inadequacy of the common law to develop a proper understanding in theory of what a State was?

MR SELWAY: Yes, your Honour.

GUMMOW J: “The Crown” is a metaphor that is brought into use in the Constitution in some senses and uses “the Crown” in a personal sense and others in this metaphorical sense?

MR SELWAY: We would say, and perhaps to this extent, differ from my learned friend from Western Australia.

GUMMOW J: If you take section 59, is it, and talk about disallowance and royal assent, that is by the sovereign person?

MR SELWAY: By the sovereign person.

GUMMOW J: On a particular advice - at one stage, the British Government’s advice.

MR SELWAY: Yes.

GUMMOW J: In other respects, “the Crown” is used in its more metaphorical sense.

MR SELWAY: Yes. We would say within the Commonwealth Constitution, at least, almost always it is used in a narrow sense, not in a broad sense. “The Crown” as a concept has the ‑ ‑ ‑

HAYNE J: That narrow metaphorical sense, that is referring to the entity of polity, State, government? What narrow sense do you say it is used in?

MR SELWAY: Almost invariably where “the Queen” is used, it is talking about the Queen personally, and that is the primary sense in which it is used in the Commonwealth Constitution, but the Queen personally carries with her some of the immunities, some of the prerogatives, some of the powers. For example, if you look at section 61, we would say that some of the powers and prerogatives of the Crown, the Queen, exercised on advice and through Ministers and so forth, were picked up by section 61.

GUMMOW J: But it did more, did it not?

MR SELWAY: It certainly did.

KIRBY J: I wonder if those prerogatives exist. The only time the prerogatives are mentioned is in section 74 which we are told the Court has held is now defunct.

MR SELWAY: All we would say, your Honour, is that it is sufficient for the present purposes to identify in relation to section 78 that one of its purposes and roles, whether necessary or not, was to address a perception that the States and the Commonwealth, or some aspects of them – we use a broad metaphorical sense of the States and the Commonwealth – would enjoy some immunities derived from their relationship with the Crown.

KIRBY J: That is one way to interpret it, though it is not expressed. The other way to interpret it is that it is to be recognised that of their nature, the Commonwealth and the States, being governmental polities, will perhaps need some controls on the bringing of proceedings against them. It may be there will be analogies from the prerogative, but the prerogative is not mentioned in 78, whereas it is in 74, which is exactly across the page in my copy. If they had wanted to mention the prerogatives of the Crown, they could have said so, as they did in 74, and they did not.

MR SELWAY: Your Honour, what we see is the danger of the analysis of the Constitution, if you like, taking the Crown out of it, is that one is then left with interpreting Chapter III, looking at the US analogues of executive immunity and executive power.

KIRBY J: There is no way we can take the Crown out of the Constitution. The Queen and the Crown are both expressly mentioned. The question is whether it is to be put into 78 when it is not there expressed.

MR SELWAY: Your Honour, clearly section 78 is there to achieve a purpose.

KIRBY J: Yes.

MR SELWAY: There are two possible purposes. One of them is that there is a problem or a perceived problem with executive immunity a la the US Constitution, in which case we would have said the immunity is significantly broader than Crown immunity, significantly more difficult to abrogate and a significantly greater problem and difficulty in interpreting Chapter III.

CALLINAN J: Mr Solicitor, could I just ask you one question before you go on. Is there any other mention in the Constitution of a Governor, that is other than the one in section 7? Section 7 refers to the certification by the Governor to the Governor‑General of ‑ ‑ ‑

MR SELWAY: Your Honour, there is section 110. Yes, there is a couple of provisions. There is one about the Governor acting in the role of the Governor‑General. There is another in relation to Senate elections and casual vacancies in particular, I think. My learned friend refers me to the index, your Honour, which refers to sections 15, 21, 110, 7, 15, 12 and 70.

CALLINAN J: Who is the Governor representing?

MR SELWAY: Normally the Queen of Australia, but there may be occasions – and one would say the Queen of Australia in right of the State of South Australia, which I assume that has some meaning ‑ ‑ ‑

GUMMOW J: Well, that is very metaphysical.

MR SELWAY: That is the danger. One ends up, as Chief Justice Latham pointed out, involved in ‑ ‑ ‑

GUMMOW J: Mystical nonsense.

MR SELWAY: Mystical nonsense.

McHUGH J: But there is at least one decision in this Court in where the Governor is sued in his own name, R v Governor of South Australia 4 CLR ‑ ‑ ‑

CALLINAN J: Well, nobody has suggested that section 7(2) of the Australia Act is unconstitutional?

MR SELWAY: No, your Honour.

KIRBY J: I just wonder – I do not want it to be assumed I accept that purported change in our Constitution without the approval of the electors. That is a side issue; we do not have to deal with it. We have enough problems.

MR SELWAY: Yes, thank you, your Honour.

GLEESON CJ: You were in the course of presenting two alternatives.

MR SELWAY: Yes, your Honour. The only point we wish to make is that section 78 can be read as either referring to some executive immunity to be somehow derived from the Constitution itself, as occurs in the US Constitution, or can be understood against the background of Crown immunity, and as being referring to that Crown immunity. We would say the appropriate way to interpret in the context and against the background is that section 78 was addressed to the Crown immunity. Your Honours, that is all I wish to say about the role of the Crown.

The starting point of our submission is that the Commonwealth Parliament does not have a general power to legislate in respect of State liability or State duties. The contrary may be suggested in paragraphs 29 to 32 of the Commonwealth’s submission that sections 75 and 76 of the Constitution, together with the incidental power, give to the Commonwealth Parliament a power to legislate in relation to the substantive duties of the States, but it is not ‑ ‑ ‑

McHUGH J: But, Mr Solicitor, insofar as section 64 gives a right to proceed against a State, you would have to concede, would you not, that that is authorised by section 78 of the Constitution?

MR SELWAY: Yes, your Honour.

McHUGH J: Insofar as section 64 assumes a suit which implies jurisdiction and in the context of federal jurisdiction and insofar as it refers to a Commonwealth or State being a party to that suit, why is not the power under 51(xxxix) sufficient to enable the Commonwealth to declare what the rights of the parties are – to legislate for the rights of the parties, as a matter of substantive law?

KIRBY J: Especially where what is involved in substance is the recovery of an unconstitutional tax.

McHUGH J: You have to get your suit, you have to have your jurisdiction.

MR SELWAY: That is, with respect, the problem. If we take Evans Deakin, there is a statute which on its face does not bind the Commonwealth – a State statute. Section 64 has the effect of binding the Commonwealth to comply with duties which, apart from section 64, had no application to it - substantive duties. The cause of action was created by section 64. That is where you went to find out what Commonwealth duty was owed ‑ ‑ ‑

GUMMOW J: That is quite different from this case.

MR SELWAY: Quite different from this case, and for the purpose of our submission, we do not deny that the Commonwealth could, if it wished, legislate to create section 64, which had the effect of precluding section 6 of the Western Australian Crown Suits Act. We do not deny that the Commonwealth has that power under section 78 of the Constitution.

Our submission is that section 64 of the Judiciary Act goes much further than that. It includes the Evans Deakin capacity. There is nothing in section 64 itself that tells you how it can be read down. What the Commonwealth asked the Court to do is to engage in some sort of distributive interpretation, and whenever a case comes along that looks like it might fall within power, you apply it, and if it does not, you do not.

McHUGH J: But does that mean that you not only have to overrule Evans Deakin but also Maguire insofar as it held definitively that section 64 was not concerned merely with procedural rights?

MR SELWAY: No, your Honour, because we do not deny that section 64 can have this valid application in relation to the Commonwealth. In relation to the Commonwealth, section 61 and the incidental power would be sufficient if one needed to look for a power to legislate as to the Commonwealth liability.

McHUGH J: But as against the States, it is only procedural matters, is it?

MR SELWAY: And rights to proceed. They may go beyond procedural rights, and we do not deny that, and so, for example, the argument here may well be that these rights in relation to the effect of section 6 is substantive. We say it does not matter much. The words are “rights to proceed”. Section 6 stops the right to proceed. The Commonwealth can legislate to give a right to proceed. So to that extent, we do not deny that there is Commonwealth power to legislate in this area if it wished to, and for that reason, we do not deny that section 79 has the effect in this area of applying ‑ ‑ ‑

KIRBY J: Just pausing there. That argument would be sufficient to solve this case, would it not, because you would say in this case, whatever may be other problems, this is a right to proceed case. Section 6 is simply an impediment to the right to proceed. The Commonwealth and the Federal Parliament has the power under 78 to enact a law on right to proceed against a State. It has done so by 64, and we do not have to, in this case, get to all the other complicated questions, because this is a right to proceed case, if you view section 6 in such a light?

MR SELWAY: Yes, your Honour.

KIRBY J: End of problem.

MR SELWAY: If you can read down section 64, so that it only applies to rights to proceed in relation to States. Essentially our submission is a severance submission. We say you cannot read down section 64. Now, if you look at section 64, we say there are three possibilities for reading it down – and I will perhaps give the three possibilities and then go through them if I might.

The first is to read it down in its application both to the Commonwealth and the States so it does not apply even to the Commonwealth other than in relation to section 78. Your Honours, we refer to that reading down in paragraph 21.1 of our submissions. The Commonwealth refers to it in paragraph 33 of theirs. Then both the Commonwealth and the State would be bound in relation to section 64 in relation to suits brought against them and in relation to rights to proceed. So the Court would read into section 64, if you like, rights to proceed, and would read a qualification into it that it only applied to suits against them.
The second possibility is to read it down so that it does not apply to the States.

GUMMOW J: What about suits between them, an action in tort between them, because it does happen.

McHUGH J: What about Port MacDonnell?

MR SELWAY: Port MacDonnell was a proceeding by Victoria against South Australia so it came within 75(iv), that there was jurisdiction under 75(iv) on Mewett, presumably then a right to proceed, subject to any regulation of that right to proceed. Then you would look to section 79 to see if there had been a regulation of it, on our view of 64, and, your Honours, we would end up with that analysis that: was there any limitation under South Australian law picked up by section 79 on the right to proceed?

GUMMOW J: The case I had in mind was Commonwealth v New South Wales 32 CLR 200 we were referred to this morning. It was…..where a Commonwealth ship ran into a State ship, I think, in Sydney Harbour.

MR SELWAY: Again, that would be picked up by 75(iii), that is to say, on the analysis in Mewett there is a right to proceed if it came out of the Constitution itself.

GUMMOW J: So you have to then fix on section 76, do you?

MR SELWAY: You may, your Honour, but what we say is that to a certain extent that is the first part of the problem. It does not arise here. There is no doubt that there is a right to proceed against Western Australia. The issue is whether that right is somehow defeated, if you like, by a Commonwealth law, section 79, picking up the Western Australian Crown Suits Act. So we are not talking about Western Australian law preventing these proceedings. We are talking about which of the Commonwealth laws has that effect.

GUMMOW J: That has to be so.

MR SELWAY: That has to be so. That being the case, the issue is not, in effect, where the right to proceed comes from, where the jurisdiction comes from – all those are a given. The question is, at least on this argument, is it section 64 or section 79 that applies? We say section 64 does not apply because it cannot be read down. Your Honours, the third ‑ ‑ ‑

McHUGH J: This notion that section 75 gives rights to proceed in effect says that 78 has a limited scope, does not it?

MR SELWAY: Yes, it does, your Honour. It does two things in respect to 78. The first of them is the explanation in Mewett of how the tort immunity worked, actually makes some sense of rights to proceed, which did not make much sense before when the tort immunity was seen as a substantive immunity in the sense that the Crown just could not commit a tort. It is much more understandable when the Crown can commit a tort and has an immunity. You then understand what “rights to proceed” means. Your Honour is right, once you have identified the right to proceed out of section 75, as it will be in most cases involving the Commonwealth and in many cases involving the States, then section 78 basically does not have much work to do, save for the fact that it does clearly acknowledge that there is parliamentary power to regulate the rights to proceed.

GUMMOW J: But when you have a section 76 case, will not you ordinarily construe it insofar as it provides suing and so forth, confers causes of action and so on, it will in part depend on 78 and be facilitated by 78, rely on 78?

MR SELWAY: I think that is right. Certainly you can see it with section 76(i) where it has always seemed peculiar that the drafters would have left 76(i) in 76 rather than 75, but the provision is that it is left to the Commonwealth Parliament to confer the jurisdiction, and it is left to the Commonwealth Parliament to confer the rights to proceed in the expectation that they would and they did, but that is the understanding. Your Honour, the third possibility for ‑ ‑ ‑

KIRBY J: I do not find that difficult because that was with a view to sharing the interpretation of the Constitution around with the State courts and not just this Court.

MR SELWAY: I understand that, your Honour, but it still seems a peculiar thing, given the role of this Court under the Constitution, that 76(i) would be subject to what Parliament would decide.

The third method of severance is to read the provision distributively in the sense that in effect the Court is asked that whenever any case comes along, it is to determine whether there is a constitutional power that will support the application of 64 in that case. That is what the Commonwealth asks the Court to do. Your Honours can see that in the Commonwealth’s submissions at paragraph 34. The principles for reading down are, we would say, clear enough.

GLEESON CJ: The question of reading down only arises if your first premise is correct, that is that this is beyond any power to some extent.

MR SELWAY: Yes, your Honour.

GLEESON CJ: What is the power that sustains section 79 of the Judiciary Act?

MR SELWAY: Your Honour, that power can only be the incidental power in its application to Chapter III.

GLEESON CJ: Why does not the same incidental power in relation to Chapter III enable the Commonwealth Parliament to enact a law that provides that in proceedings in federal jurisdiction the law will apply equally to all manner of parties?

MR SELWAY: Because that would be creating a substantive liability. If we look at it in relation to States, it is like a new part of section 51(xl): the Commonwealth has power to pass laws in respect of the States. Your Honours, we have actually dealt with this to an extent in ‑ ‑ ‑

GUMMOW J: That is…..scenario.

MR SELWAY: That is the reason we are here, your Honour. We have dealt with this to an extent in footnote 5 on the bottom of page 11 of our written submissions where we actually address the question of what section 79 can do, because we say the Commonwealth lacks the power, if you like, to create causes of action using the incidental power.

GUMMOW J: That is very important. What footnote is that?

MR SELWAY: Footnote 5, your Honour. We refer there to a comment by your Honour the Chief Justice and Justice Gaudron and your Honour Justice Gummow in ASIC v Edensor Nominees (2001) 204 CLR 559. The relevant reference is really at 586 to 587 and it is paragraphs 54 to 58. In paragraph 54 your Honours will see the second sentence:

The “matter” was a justiciable controversy identifiable independently of the proceeding brought for its determination. The focus of attention is that indicated by the joint judgment of five members of this Court in Crouch v Commissioner for Railways, namely “upon the substance of the dispute” and “the substantial subject matter of the controversy”.
The controversy was to be determined, in the words of Deane and Gaudron JJ, “in accordance with the independently existing substantive law”. That body of law will supply the measure of the rights and liabilities which are at stake.

Then if your Honours read on to paragraph 57, where ‑ ‑ ‑

GUMMOW J: This is all a situation where the peg of federal jurisdiction is identity of party. This case is identity of subject matter, namely the constitutional question.

MR SELWAY: Yes, your Honour. There is a difference but the issue is highlighted if you look at diversity jurisdiction. In diversity jurisdiction the question then is: does the Commonwealth have the power to create causes of action in tort, for example, between residents of different States? Our answer would be no, they do not; the matter must pre‑exist. That is what 75 and 76 tell you. The incidental power relates to the execution of the judicial power, not to the creation of judicial power. So it is in that context that whilst, as I say, section 79 can be used, in the Commonwealth’s words, in an adjectival sense, it cannot be used to create new causes of action and so, we would say, the contrasting evidence ‑ ‑ ‑

GUMMOW J: To create a new cause of action I think already exists. Here there is already a matter arising under the Constitution.

MR SELWAY: Yes, I understood your Honour and to that extent we do not deny that there is Commonwealth power to deal with this, but we say that it has not been appropriately used because 64 is too wide. Section 64, we say, while it has Evans Deakin as part of its jurisprudence and creates causes of action and we say you cannot create causes of action against the States; there is no power. If that is true, it has to be read down and the question is: how do we read it down?

GUMMOW J: Severance is everything to your argument really.

MR SELWAY: It is everything, your Honour. The principles of severance are clear enough.

GUMMOW J: Have you taken us to paragraph 21, I think, of your outline dealing with severance?

MR SELWAY: I have not but I was about to. Yes, your Honour, those are the two suggestions we make for reading down. There is the third suggestion which is the Commonwealth’s suggestion in their submissions that it be read distributively. We address that in paragraph 22 of our written submissions. The principle for reading down - if I could take your Honours very quickly to Chief Justice Latham in Pidoto v Victoria (1943) 68 CLR 87 at 108 to 109. These principles are well known but are probably worth repeating in this context. If your Honours look at page 108 at about point 8 at the bottom:

Let it be supposed that the Commonwealth Parliament passes a general statute dealing with larceny which, according to its terms, is plainly beyond Commonwealth legislative power because the Parliament has no power to make general criminal laws. Prime facie the law is invalid. But the Commonwealth has full powers of legislative control, eg, in relation to all the territories of the Commonwealth, in relation to acts and defaults of postal, customs and other Commonwealth officers, and in relation to acts which constitute parts of inter‑State and foreign trade and commerce. Then, it is said, the statute should be treated as valid in relation to such cases as those mentioned, that is, to all larcenies in the Federal Capital Territory, the Northern Territory . . .
Such an application of the Acts Interpretation Act appears to me to require the Court to perform a feat which is in essence “legislative and not judicial”. To recur to the illustration given, the view suggested should, in my opinion, be rejected for the reason that it could not reasonably be supposed that it was the intention of Parliament, as disclosed in the statute, taken together with the Acts Interpretation Act, to produce such a hotch-potch of irregularly and partially operating law with respect to larceny.

His Honour then goes on in the next paragraph to say that there should be some criteria or standard set out in the provision itself by which it can be read down.

There are many cases to the same effect. We have some of them set out at paragraph 22 of our written submissions. Could I ask your Honours to note though at the bottom of those cases is Maguire v Simpson where there is one line by Justice Mason suggesting that in fact section 64 can be read down in its application to the States so that it only applies in relation to rights to proceed.

GUMMOW J: This was a question in Maguire v Simpson, was it not? In other words, I thought some of the other Judges dealt with this question about 64…..because it was not only plaintiffs but defendants as well.

MR SELWAY: Yes. There is mention of it. I think Justice Jacobs in particular draws attention to that proposition. There are various cases – that one, China Ocean Shipping – where various Judges have drawn attention to the problems of section 64 in its application to the States but none of them, with respect, have dealt with the severance issue apart from the one line by Justice Mason.

McHUGH J: I referred to them in the footnote in Edensor, I think.

MR SELWAY: Thank you, your Honour. I apologise; I overlooked it. The problem with the first proposal, that is to say to read it down to both the Commonwealth and State ‑ ‑ ‑

McHUGH J: No, in Airservices, it was.

MR SELWAY: The problem with reading it down in its application to both the Commonwealth and the States is that the Court has already interpreted on a number of occasions to achieve its full effect in relation to the Commonwealth. It is also unclear on that approach what then happens in relation to the Crown Proceedings Acts, remembering that the Crown Proceedings Acts by and large have the same effect in relation to the States as section 64 has in relation to the Commonwealth. If one reads it down in relation to the States so it only applies to rights to proceed, whilst the Crown Proceedings Acts have a substantive effect in relation to the States, there is then a significant problem of working out how the Crown Proceedings Acts are then picked up by section 79 in the area that is then left as part of the vacuum and we end up with a vacuum for the Commonwealth and none for the States because the problem is picked up by their own Crown Proceedings Acts.

On that approach, if that were adopted, Evans Deakin would have been wrongly decided. The problem with the second approach, that is to say of reading the States out of it, is that it does not apply to the States and in particular it does not apply equally to the Commonwealth and States. We say that that is true but that entirely reflects the different constitutional power of the Commonwealth in relation to each. In terms of practicality, it leaves the Commonwealth to legislate to the extent of its power if it wishes but the State is bound through section 79 and their own Crown Proceedings Act in the interim. We say as a practical matter that is the sensible solution.

The third option, the one put by the Commonwealth of reading it distributively, we discuss that in paragraph 22 of our written submission and say that it cannot be done. We say that the Commonwealth cannot legislative to the effect that this Court is asked to redraft Commonwealth statutes to make them as broad and general as possible, having them granted to available powers. The other aspect of that of course is that if one is doing it distributively, one does not limit it to section 78. One also picks up, for example, the whole plethora of section 51 powers. So if, for example, the State was sued by a corporation, the argument would then be that there is a corporation, and the matter could be legislated in relation to corporations power, therefore section 64 applies - the sort of R v Hughes analysis gone mad.

Your Honours, having said that, there are, we must say, a number of Commonwealth Acts which now require that sort of distributive interpretation. We have referred to a couple of them in footnote 4 of our written submissions: section 7A of the Workplace Relations Act, section 208 of the Native Title Act. My understanding is there are some others. The effect of the submission is that those provisions might well be invalid. This Court has not had to rule on them yet but it has arisen in argument a couple of times.

So our submission at the end of the day is that the case comes down to a severance question, that section 64 in its relation to States goes further than the Commonwealth has power and it cannot be read down in any sensible way except to exclude the States from its provisions. If that is done, section 79, we would say, then picks up the relevant Crown Proceedings Act and applies those. If it please the Court, those are our submissions.

GLEESON CJ: Thank you, Mr Solicitor. Yes, Mr Solicitor for New South Wales.

MR SEXTON: If the Court pleases. Your Honours, the two arguments on which we rely and about which we have made written submissions have been largely dealt with by the Solicitor‑General for Western Australia. Can I say very briefly something about the order in which we make those two arguments.

Our primary proposition is that section 6, which for the purposes of this case is simply a notice provision, is picked up by section 79 of the Judiciary Act and that section 64 of the same Act does not otherwise provide and so exclude the operation of section 6. Our secondary argument is that if section 64 does otherwise provide, then in those circumstances the effect is to bring into play section 47A of the Western Australian Limitations Act and to effectively reach the same result.

I will not say any more about that second argument which my learned friend from Western Australia has dealt with, but can I say something very briefly about the first of those arguments. The reason we say that section 64 does not otherwise provide is because these proceedings arise out of a peculiar governmental function – that is in this case the protection of the revenue. We say that there must be – and there are on the authorities – some kinds of governmental functions that bring into play the phrase “as nearly as possible” to in effect prevent section 64 ruling out those provisions on which the States wish to rely. So that in this case, for example, section 6 is available notwithstanding the provisions of section 64. One example amongst a number that we point to in our written submissions ‑ ‑ ‑

GUMMOW J: You say section 6 is available, but how? Not of its own force.

MR SEXTON: No, because it is picked up by section 79, your Honour. One example that we give amongst a number is that of public interest immunity, which was referred to in the judgment in Commonwealth v Miller (1910) 10 CLR 742 and by Justice Isaacs at 757, to point out that the effect of section 64 would not be to deprive a governmental body of the right to make that claim.

KIRBY J: What are those cases?

MR SEXTON: Commonwealth v Miller. There is also reference in the Marconi’s Wireless Telegraph Case (1913) 16 CLR 178.

HAYNE J: Therefore the linchpin of this aspect of the argument is this notion of protection of the revenue. That means, does it, protection of the revenue, however gained, whether lawfully gained or no?

MR SEXTON: Yes, your Honour. It particularly comes into operation because of an invalidated tax statute.

GUMMOW J: It was not validated, it was always invalidated.

MR SEXTON: Yes, your Honour.

GUMMOW J: You will not wriggle out of it that way.

HAYNE J: So protection of the revenue unlawfully obtained?

MR SEXTON: Yes, your Honour.

HAYNE J: What is the constitutional principle that warrants that conclusion?

MR SEXTON: It warrants the conclusion that section ‑ ‑ ‑

HAYNE J: That government has an interest in protecting revenue unlawfully obtained.

MR SEXTON: Because it may be over a long period of time, if that statute has not been held to be invalid, that there would be particular consequences for the revenue if all of those funds could be claimed.

HAYNE J: A free fund would be inconvenient. That is the underpinning, is it?

MR SEXTON: “Inconvenient” is perhaps not the word that we would use, your Honour. The consequences could be extremely serious.

KIRBY J: What about the cross-vesting legislation? Those consequences were extremely serious. We have seen them worked out ever since.

McHUGH J: What about Ha itself?

KIRBY J: What about the Banking Case? That was at the heart of the government’s program, similarly the Communist Party Case. These are not words that fall very happily on our ears.

MR SEXTON: But that goes to the question of validity, your Honours, and obviously governmental convenience cannot stand in the way of a finding where the finding is one of invalidity. The question here is what will be the consequences of that finding?

McHUGH J: But it is an unlawful imposition of taxes. I would have thought almost every principle of our constitutional history for the last 300 years denies the proposition. After all, Hamden and his contemporaries suffered a lot of pain denying the very proposition that you are asserting, that a government can unlawfully impose taxes and then hang onto the taxes.

MR SEXTON: Your Honour, in a sense that is a separate question that could be dealt with by legislation but the question here is whether section 64 would have that effect. If there is an obvious governmental interest, which, we say, there is, then section 64 will not have that effect. What your Honour proposes could be, of course, reached in another way, but it is the operation of ‑ ‑ ‑

McHUGH J: Well, not constitutionally. Antill Ranger and Barton cases both deny the right of the States to protect themselves against the recovery of moneys which has been taxed contrary to the Constitution.

MR SEXTON: Except for this, your Honour. It was accepted, your Honour, impliedly in Antill ‑ ‑ ‑

GUMMOW J: But it was subject to a general law of limitations.

MR SEXTON: Yes.

GUMMOW J: This is not a general law, this notice provision. It is particularly protective of government.

McHUGH J: What is more, it is not a limitation. It goes to the very heart of the cause of action.

MR SEXTON: Well, it is a notice provision, only, for the purpose of discussion.

McHUGH J: No, it is not a notice provision. It is an essential condition of the cause of action. It is a Murphy v Maxwell, The Crown v McNeill‑type condition. It is not a statute of limitations. It is not a procedural bar that can be waived. It is an essential of the cause of action.

MR SEXTON: Well, in our submission, your Honour, it does not matter really how that is phrased. Its effect is the same – I accept that, your Honour. Can I just take your Honour to those two cases. In Antill Ranger (1955) 93 CLR 83, there is a passage at the bottom of page 99 from ‑ it is a joint judgment of all the members of the Court, except for Justice Fullagar – which reads:

The taking of the money from the plaintiff was not merely against his will and wrongful. It was done in opposition to the constitutional guarantee of freedom the enjoyment of which he was asserting. The statute now in question does not give him some other remedy by which he may regain ‑ ‑ ‑

McHUGH J: Sorry, what page is this, Mr Solicitor?

MR SEXTON: I am sorry. It is the bottom of page 99. It is the paragraph that starts, your Honour, “The taking of money”. Their Honours go on to say:

It does not impose a limitation of time or require affirmative proof of the justice of the claim. It simply extinguishes the liability altogether –

In our submission, the implication of that paragraph is that, for example, “limitation of time” would not necessarily cause the same problem as the extinguishment. To the same effect, can I just take your Honour to two judgments in Barton (1957) 97 CLR 633. Only two of the Justices in that case, Justices Fullagar and Taylor, needed to consider this question. Your Honours will recall that it was a legislative provision that, in effect, required commencement within a year of the proceedings in question. So it imposed a shorter period of limitation than would generally be in existence.

GUMMOW J: And retrospectively, did it not?

MR SEXTON: Well, that was the problem, your Honour. That was why it ran into, in a sense, section 92. If your Honours look at the bottom of page 658, in the judgment of Justice Fullagar – Justice Taylor agreed with Justice Fullagar’s reasons. Justice Fullagar says:

It is not suggested that s 27 is wholly void. It is clear, in my opinion, that it is capable of valid operation over a very wide field. But the plaintiff’s case rests ultimately on s 92 of the Constitution –

So he suggests that the section is not void, and, towards the bottom of page 659, he goes on to say:

It is simply a statute of limitation of a very ordinary and familiar kind, which substitutes, in the case of certain public authorities, a shorter period than that which is generally applicable to causes of action of the kind dealt with. The period cannot be said to be unreasonable.
He goes on to say, the position “might have been different” if, in fact, it effectively – by putting such a short period of limitation as to, in effect, make the plaintiff’s entitlements impossible to be fulfilled. So, in our submission, those passages indicate that a notice provision or a limitation provision in relation to governments will not be invalid provided it meets those requirements. That is one reason, we say, in particular, why, in this case, once picked up by section 79, it is not a situation where section 64 otherwise provides.

It does not otherwise provide, because the proceedings arise out of a peculiar government function, and that function here is the protection of the revenue. Once it is accepted that there are a range of government functions that would have that effect, in relation to section 64, then we say, the only question is whether this particular function fits within that category and we say that, for many reasons here, the protection of the revenue would be an obvious entry in that catalogue of governmental functions. Your Honours, there is just one other point to which I should refer ‑ ‑ ‑

KIRBY J: Is there any case which, as it were, puts protection of the revenue which was unconstitutionally recovered into a special case? We have had cases put to us about de facto officers and matters of that kind, but I do not recollect a case that puts revenue into a particular case that calls forth a different doctrine than the…..doctrine

GLEESON CJ: I would have thought the paragraph following the paragraph that you read from Antill Ranger, beginning with a sentence that I think was “This is a difficult problem” or something like that, examined the peculiar issues that arise in this context. I have in mind the paragraph in Antill Ranger on page 100 beginning with the sentence, “The question is not an easy one.”

MR SEXTON: Yes, your Honour.

GLEESON CJ: Three‑quarters of the way down the page:

Considerations such as these might seem to give the matter a somewhat different aspect and distinguish it from a bare attempt to legislate so as to avoid the legal consequences of offending against the Constitution.

MR SEXTON: We would say that that is relevant in this case, your Honour. In answer to Justice Kirby, there is a consistent strain of authority we would say to indicate that this, amongst other governmental functions, has always been regarded as a matter that merits protection and that is true even putting aside the other issues that arose in cases like Air Canada and Woolwich and so on.

KIRBY J: The issue would come up acutely, would it not, in the so‑called validation legislation which purports to leave the funds where they were received. The States have enacted those laws and indeed further down the track, as I understand it, in this litigation. This litigation may never finish, it may keep coming back.

MR SEXTON: I think the Commonwealth, your Honour, has enacted legislation which affects the way in which the loss falls between ‑ ‑ ‑

KIRBY J: The States did too.

MR SEXTON: Between the various parties. Your Honours, the only other matter to which I should refer is that if ‑ ‑ ‑

GUMMOW J: Are you referring to the windfall tax collection legislation?

MR SEXTON: Yes, your Honour.

GUMMOW J: Acts 132, 133 and 134 of 1997.

MR SEXTON: I will have to take your Honour’s word for that but that is the legislation, your Honour.

GUMMOW J: Someone had better confirm it to us at some stage.

MR SEXTON: Just in one further answer to your Honour Justice Kirby. In Commissioner of State Revenue (Victoria) v Royal Insurance 182 CLR 51, there is a reference towards the bottom of page 68 by Justice Mason who says:

The remedy for any disruption of public finances occasioned by the recovery of money in conformity with the law of restitution lies in the hands of the legislature. It can determine who is to bear the burden of making up any shortfall in public funds.

It is not apposite to this case that is before the Court in this form but it indicates, we would say, the fact that it is classically a governmental function that is under consideration here.

Your Honours, the final matter. There seemed to be in the course of exchanges this morning some suggestion that section 79 could be entirely taken out of the equation, in other words, our argument is section 79 picks up section 6. Section 64 does not otherwise provide but if it does otherwise provide, one reaches a similar result in any event. The problem we would say with leaving section 79 out of the equation if that be suggested, which seems to involve going straight to section 64 ‑ ‑ ‑

KIRBY J: It is not leaving it out of the equation, it is obeying its terms, is it not?

MR SEXTON: On the question of applicability, yes, that is so, your Honour. I do not suggest taking it out unwarrantedly but if that approach is taken and in a sense one goes directly to section 64, it leaves the problem, in our submission, of what is the relevantly applicable law on questions, for example, of limitations or evidence because nothing has been picked up by section 79.

KIRBY J: That is just what the Federal Parliament pursuant to its power under 78. It might have enacted more generously, it might have enacted in more detail, but it has not. If you take the view that 64 is the carrying into effect of 78 of the Constitution, then it is the Exocet.

MR SEXTON: But your Honour, it is an Exocet that does not leave any law to be applied in the proceedings.

KIRBY J: There may be other provisions of the Judiciary Act of general character that pick up other law, substantive law anyway.

MR SEXTON: Your Honour, I have analysed all that but it seemed to us that that was a problem about the proposition - certainly in a practical level of proceedings but one might think at a conceptual level as well.

Unless there are any other matters, those our submissions, your Honours.

GLEESON CJ: Thank you, Mr Solicitor. Mr Solicitor for the Commonwealth.

MR BENNETT: There are nine matters on which I propose to address your Honours.

The first is the matter raised by Justice Kirby this morning concerning the distinction between the Crown and the State and its effect. The second concerns the seeking of leave to argue that Evans Deakin is wrongly decided, and Maguire v Simpson and what flows from that. The third is the true basis and scope of section 64 once Evans Deakin and Maguire v Simpson are out of the way. The fourth is the significance of the right to proceed under section 78. The fifth, sixth and seventh are the three reasons why we say that in fact section 64 does not apply in this case, the first being the words “In any suit which require the commencement of proceedings”, the second being the ability of the Commonwealth to regulate, and the third being the words “so far as is reasonably practicable”. The eighth is the submission that section 6(1) of the Crown Suits Act is independent of section 5 in which we will substantially adopt what the learned solicitor for Western Australia has said. The ninth concerns severability.

The first of those is the distinction between the Crown and the State. All we would wish to say about that in this case is that that distinction does not appear to arise in a way that could affect the result in this case. It has two aspects. The first is the use of the word “Crown” in statutory provisions. As to that we submit it is easy to construe it in the light of common understanding at the time as a reference to the State, whatever the accuracy of that.

KIRBY J: This is the 1900 theory of construing the Constitution, is it?

MR BENNETT: I am sorry, your Honour, I was talking about the Crown Suits Act.

KIRBY J: I see. I noticed in that Act there is in a subsection before it which says that “you shall sue in the name of the State of Western Australia”, which confirms that giving it a purposive construction that the statute was intended to be a statute for suing the State of Western Australia.

MR BENNETT: Yes. In the Constitution itself section 78 uses the words “a State” rather than “the Crown”. The other way it could affect the matter concerns the question of Crown immunity in relation to which we make two submissions. The first is to the extent that such immunities exist or existed, the question whether they were taken over really involved restrictions between Crown immunity and sovereign immunity and whether one treats it as the same. It does not arise in this case because the cause of action in this case, we submit, arises under covering clause 5 in section 90 – the right to proceed, I should say.

McHUGH J: Does the Commonwealth have any executive power of its own?

MR BENNETT: Your Honour, under section 61 ‑ ‑ ‑

McHUGH J: “The executive power of the Commonwealth is vested in” Her Majesty.

MR BENNETT: Yes, “and is exercisable by the Governor‑General” who, of course, acts on the advice of the Westminster system.

McHUGH J: I appreciate that, but does the Commonwealth have any executive power? Does the entity created by the Constitution have any executive power?

MR BENNETT: Your Honour, its executive power is only exercisable in the manner I have indicated, through the Governor‑General.

McHUGH J: Section 61 says it “is vested in the Queen”.

MR BENNETT: Yes, your Honour, but “exercisable by the Governor‑General”, so the question of who it is vested in has only symbolic significance once the Governor‑General can exercise it, and must do so, on advice. For that reason we submit that those important questions are not questions which will affect the result in these proceedings.

The second matter is that I seek leave to argue that Evans Deakin and Maguire v Simpson are wrongly decided.

GLEESON CJ: Yes, we note you seek that leave.

MR BENNETT: Yes, if your Honour pleases. Might I take your Honours to the judgment of Chief Justice Barwick in Maguire v Simpson, 193 CLR 362.

KIRBY J: By seeking leave, I take it that you mean leave is required. There is a view in the Court which preceded my arrival that you do not really need leave, but our duty is to the Constitution.

MR BENNETT: Yes, and Justice Deane’s view in Evda Nominees.

KIRBY J: I think Justice Callinan said something similar.

MR BENNETT: Yes, I do appreciate that, your Honour. I do not make any concession by seeking leave but the ‑ ‑ ‑

KIRBY J: It is prudent of you to seek it.

MR BENNETT: I understand, your Honour, that the way it is being dealt with is that I will argue the question of leave and my general submissions together.

GUMMOW J: Yes, but we need to know the hypothesis on which you are seeking leave. In other words, how does the correctness of these decisions get into the debate?

MR BENNETT: Your Honour, it arises in two ways. The principal way is on the South Australian submission that section 64 is invalid. Part of that submission is based on it going beyond section 78 because it deals with substantive matters and the creation of substantive causes of action and so on where otherwise they would not exist. In order to resist that I seek to show that section 64 is limited to adjectival matters and I will explain the difference between that and procedural.

GUMMOW J: Yes.

MR BENNETT: I will be submitting that one can justify both Evans Deakin and Maguire v Simpson on their facts because both were, in a sense, adjectival, although not procedural. One concerned a quasi garnishee situation which could have been achieved by the normal law of garnishee with some minor modifications, and the other of course concerned a limitation period. Both those are classified as substantive in the substantive procedural universe.

GUMMOW J: I understand that but if we were not satisfied by South Australia’s submission that there was any invalidity of section 64, what would you then say?

MR BENNETT: Your Honour, it then has less relevance but it has some relevance to the general arguments about the scope of section 64 and how it applies, particularly in relation to rights to proceed under section 78, which seems to be part of the argument as to why section 64 prevents section 79 picking up section 6.

GUMMOW J: I am just puzzled as to why you want to read down your own legislation, that is all. No one is going to hold it is invalid. That is why I wanted to know how it entered into the debate, how the correctness of these decisions entered into the debate - unless you join in Mr Selway’s attack on the validity, which I do not think you do.

MR BENNETT: No, your Honour. I use the adjectival argument to resist it.

GUMMOW J: Is that the only basis on which it gets into the argument? You said there was another one, I think.

MR BENNETT: Yes, that is referred to in paragraph 7 of our submissions, your Honour. We submit that section 64 requires the existence of a suit including a right to proceed as a precondition to its operation and the ‑ ‑ ‑

KIRBY J: Why would one read that in? All it contemplates in its words is the existence of the suit. It does not contemplate that it is a valid suit or it is going to win. It is just that you have to have the suit. It is for the judicial branch.

McHUGH J: Justice Kirby has forgotten what he said in Dao’s Case. He expressly said that it requires a cause of action.

KIRBY J: I may have been wrong.

MR BENNETT: Your Honour was right, with respect.

KIRBY J: First thoughts can sometimes be wrong - not often.

MR BENNETT: It may be a fine distinction, but there is a distinction between something that operates as a defence and something that operates as a condition precedent to the bringing of a suit, and I will be taking your Honours to some authorities which show that. But certainly if the argument that it is invalid is rejected before I begin, certainly that takes away the principal reason why I need to put this submission.

GUMMOW J: What is the subsidiary reason?

MR BENNETT: The subsidiary reason, your Honour, is the one in paragraph 7 of our submissions and of course, although this does not on its own, justify it, our concern that the more cases refer to the Evans Deakin approach to section 64 and assume it, the harder it becomes to do this in the future. We learnt that in Bass.

Now, your Honours, the starting point is at 369 point 8 of the judgment of Sir Garfield Barwick in Maguire v Simpson. His Honour said, we submit correctly, that:

The proper ambit of s. 64 has not heretofore been the subject of a decision of this Court. Various Justices have expressed views –

et cetera. So although views had been expressed from time to time including in cases such as Asiatic Steam Navigation, the proper ambit was not the subject of a binding decision.

GLEESON CJ: They can be found in the Australian Digest.

MR BENNETT: Yes, if one still keeps one’s old editions. The second matter to note about his Honour’s decision is that he says at the bottom of page 369:

If the Court’s task in this case were merely to construe s. 64 without regard to historical considerations peculiar to the relationship of the Crown and the citizen in Australia, I should feel the greatest difficulty in concluding that the words . . . were apt to do more than specify matters of procedure in the conduct and manner of carrying on a suit to which the Commonwealth or a State was a party –

So the second starting point is that his Honour would have reached a similar conclusion to that for which we submit but did not for one reason, and that was those earlier cases.

He then refers to the 1876 New South Wales Act and to Bowman v Farnell (1887) 12 AC 643 in the Supreme Court and the Privy Council. I only need to refer to Bowman v Farnell for one purpose and that is to show your Honours what the section said. Section 2 appears at page 647 and your Honours see that section says:

Any person having or deeming himself to have any just claim . . . may set forth the same in a petition to the governor praying him to appoint a nominal defendant in the matter of such petition, and the governor . . . may . . . appoint . . . nominal defendant –

et cetera. Then:

“3. The petitioner may sue such nominal defendant at law or in equity in any competent Court –

So there was an express conferral of the right to proceed.

When one looks at the Judiciary Act one finds words like that in section 56:

A person making a claim against the Commonwealth, whether in contract or in tort, may in respect of the claim bring a suit against the Commonwealth ‑ ‑ ‑

GUMMOW J: Section 56 is telling you where you may bring the suit.

MR BENNETT: It is telling you that as well, your Honour, yes, but it uses ‑ ‑ ‑

GUMMOW J: Well, that is the…..is it not?

MR BENNETT: Yes, but one goes on. Each of these sections do that. Section 57 says a person may bring the suit; section 58, a person may bring a suit, even section 59. When one goes to section 64 those words are very conspicuous by their absence. The words which led the Court in Bowman v Farnell to reach the conclusion it did are completely absent and yet, Sir Garfield goes on.

GUMMOW J: It says bring these suits in the High Court or some other court.

MR BENNETT: Yes.

GUMMOW J: Are there not cases that say the Commonwealth can, nevertheless, assent to being sued in some other court that is otherwise competent?

MR BENNETT: It depends, your Honour. Where one is dealing with federal jurisdiction, which of course one is when the Commonwealth is sued, then the Constitution permits the conferral of jurisdiction on State courts, but the Commonwealth can ‑ ‑ ‑

GUMMOW J: I am just wondering what the connection is between section 57 and section 39(2).

MR BENNETT: Yes, but, your Honour, that does not affect the basic approach which is that all those sections use the relevant words. Section 64, which is the one which is said to do it, does not use those words. Those were the words which were present in the legislation, which is all Sir Garfield relies on. When one goes on to the next part of his judgment he says at page 373 point 6 ‑ ‑ ‑

GUMMOW J: Wait a moment. We are not going to finish today, I do not think, so do not burst your boiler perhaps, but section 64, unlike sections 56 and 57 and 58 and 59, is not talking about in what forum.

MR BENNETT: No, I accept that, your Honour. I accept that.

GUMMOW J: It is qualitatively different really.

MR BENNETT: Yes, the section in the New South Wales Act said “in any competent court”, so it was wider in that sense, but these sections which say where one may sue are fairly wide in where they say one can sue and I would submit that is conferring in those courts the right to proceed within the meaning of section 78.

GLEESON CJ: But just go back to Farnell v Bowman at the bottom of 647 and the top of 648, section 3.

MR BENNETT: Yes, your Honour.

GLEESON CJ: It refers to the nominal defendant procedure and says:

every such case shall be commenced in the same way and the proceedings and rights of parties therein shall as nearly as possible be the same . . . as in an ordinary case between subject and subject.

Now, what Chief Justice Barwick said on page 373 of Maguire v Simpson was that those words had been given a judicial construction by the time the Judiciary Act was enacted.

MR BENNETT: Yes, your Honour, but given a judicial construction in the context of a section which in terms conferred the right to sue, and one cannot confine the construction to those words alone. The construction is to the words in the section in which they appear and that is why the separation of the two concepts in the Judiciary Act is so significant.

GUMMOW J: Are you saying Sir Garfield was clearly wrong?

MR BENNETT: Yes, your Honour.

GUMMOW J: Therefore we should review it?

MR BENNETT: Yes, your Honour.

GUMMOW J: That is not right.

MR BENNETT: Well, your Honour, they are the words.

GUMMOW J: It might be at least arguable, and having regard to section 3 of the Colonial Act which was not unique to New South Wales either. It all started off in Natal, did it not, in South Africa?

MR BENNETT: Yes, but, your Honour, it is in a section beginning with the words “A petitioner may sue”, and that is the argument.

McHUGH J: One problem with Sir Garfield’s judgment is that he does not deal with the effect of section 64 on the States. Justice Mason did.

MR BENNETT: But, your Honour, the conclusion in relation to Sir Garfield is that at page 373 point 6 in the beginning of the paragraph, he says:

Because of that background, I have reached the conclusion –

So it is not based on anything else and, indeed, he started saying he would have come to the other conclusion but for it. The background, we submit, is flawed because of the opening words of section 3.

GLEESON CJ: But part of the background is also the practical, historical background referred to on page 649 of Farnell v Bowman, is it not, and that is conditions in the colonies where governments were forced to undertake a lot of activities that were undertaken by private enterprise in England?

MR BENNETT: But, your Honour, that is an important policy consideration and one understands that, but that does not necessarily answer the argument that when one is analysing which provisions confer the right to proceed it was not this provision; it was other provisions of the Judiciary Act. Of course, we know that all the States except Victoria had Crown Suits legislation at the time of Federation and I will come to the significance of that in a moment.

If one goes to the other Justices in Maguire v Simpson, Justice Gibbs bases his judgment on a number of earlier High Court cases, particularly Asiatic Steam Navigation. I will come back to that case. Justice Stephen at page 392 point 1 and 392 point 5 makes it clear that he is not deciding the issue and in particular at page 394 he says he does not regard Asiatic Steam Navigation as deciding it, and we join in that.

Justice Mason relied on both Asiatic Steam Navigation and Farnell v Bowman. He refers to the distinction in the wording of the sections at page 400 point 5 but dismisses it without giving any real reason, rather in the way my learned friend, Mr Hutley, did where he said the statute was slightly different, but not materially. We submit it is the key words. At 402 point 5 Justice Mason appears to limit his views to cases where the State statute is general and is therefore picked up. This of course was a case where the State statute is specific and it is suggested that section 64 overrides it. Justice Jacobs relies principally on the width of section 78 and Justice Murphy relies only on Asiatic Steam Navigation.

In relation to Asiatic Steam Navigation, that of course was a suit where the Commonwealth sought to limit its liability after a collision at sea for which it was admittedly liable and it was the plaintiff. Justice Fullagar said that the Judiciary Act was a general enactment and section 64 could not detract from the specific enactment in the Merchant Shipping Act. Justice Kitto regarded Farnell v Bowman as making the conclusion inevitable that section 64 included substantive rights, and I have dealt with that. The minority judgment in Asiatic Steam Navigation, Chief Justice Dixon, Justices McTiernan and Williams, only refer to section 64 in passing, but they do say in obiter that it was substantive, and of course Evans Deakin merely picks that up.

Now, we submit part of the problem in both cases, in Maguire v Simpson and Evans Deakin, was that the question was only posed for the Court in terms: is section 64 substantive or is it merely procedural? That, we submit, is not the question. The true distinction, we submit, is a broader one and as I have submitted, in both cases, had they applied the test of adjectival or non‑adjectival – and I am coming to the reason why we submit that test – they could in both cases have reached the wrong result.

It might have been arguable in Evans Deakin, but it is at least arguably a quasi‑procedural or adjectival provision which puts together two liabilities and gives one direct access rather like a garnishee, although it does it with a charge. If one talks about, I suppose, a charging order rather than a garnishee, the analogy becomes rather clearer. The reason we submit that that is so, that the test is adjectival or non‑adjectival, is that we submit that the true source of the power to enact section 64 is the incidental power of the Commonwealth to regulate matters in federal jurisdiction. It is a power found from Chapter III combined with the implied incidental power and the express incidental power. The power to regulate matters in federal jurisdiction, we submit, goes beyond mere procedure in terms of the traditional distinction between procedure and substance. That distinction, as we know, puts many things which are – I am sorry to keep repeating the word – adjectival in the box of substantive rather than procedural.

GUMMOW J: Where do you get this word “regulate” from?

MR BENNETT: From the incidental ‑ ‑ ‑

GUMMOW J: As we know from the history of section 92, that is a very pregnant term too.

MR BENNETT: Yes, it is very hard to find terms that are not, your Honour. I am trying to use neutral words as far as I can, but perhaps ‑ ‑ ‑

HAYNE J: The matter stemming from the attempt to force on section 64 a taxonomy which finds no root in its words.

MR BENNETT: No, your Honour, but which finds root in the power to enact it, a power to deal with matters – and if your Honours find the word “adjectival” unattractive, one can put the same submission in slightly different words by saying that it extends to matters incidental to the determination of matters in federal jurisdiction.

GUMMOW J: That would be closer to the test in 51(xxxix).

MR BENNETT: Yes, and it is that concept which we seek to embrace by the use of what we had hoped was a neutral word, “adjectival”. Your Honours, if that is so, section 64 then has the functions which we have set out in paragraph 17 of our submissions. It first of all denies to the Commonwealth and the States the common law privileges the Crown might otherwise have enjoyed as a litigant and it limits in that respect the operation of the common law otherwise picked up by section 80. Secondly, it arms a subject in a suit by or against the Commonwealth or a State in federal jurisdiction with the same statutory adjectival rights that the subject would enjoy if a suit were between subjects.

Finally on this aspect of the case, and I am on the fourth of my four points – I apologise that I have not made clear as I have passed from one to the other - one can put together in relation to the right to proceed these propositions. This case of course is a case which arises because of covering clause 5 and section 90. While we do not submit that the Constitution as such confers rights of action for damages or matters of that sort of the type referred to in the American case of Bevins, we say that is for the reasons given by this Court in Kruger. The primary reason is that there are always going to be other causes of action available where there is a violation of a constitutional right. There is either going to be an action for recovery of moneys paid colore officii as in this case with the range of common law actions there in quasi‑contract or one may have a trespass to goods where the State seizes a truck engaged in interstate trade; one can have all sorts of cases.

Kruger itself makes that very clear, that there are always going to be other causes of action available. The implication from Marbury v Madison that is required in our Constitution is not that one can sue for damages for breach of the Constitution, as has been suggested in the United States, but rather that the States cannot rely on any common law immunity it might otherwise have had to resist such an action. In that sense the right to proceed is conferred by covering clause 5 and in this case section 90.

KIRBY J: The fact that there are other causes of action - I mean, it is very often that plaintiffs have many causes of action – does not of itself logically exclude a constitutional cause of action. I do not remember this aspect of Kruger. Did Kruger have to decide that such a constitutional cause of action did not exist? I would not have thought that was necessary to the decision in Kruger. It fell at an earlier stage.

MR BENNETT: There was a claim, as I understand it, on that basis. The matter is dealt with – I will give your Honour the page reference ‑ ‑ ‑

KIRBY J: It is in your footnote. I think you refer to Kruger.

MR BENNETT: Yes.

KIRBY J: Did you refer in your submissions to the United States decision? I have not looked at that. I have not analysed it.

MR BENNETT: No, we did not, your Honour.

KIRBY J: Well, I would like a reference to that. You mention it, but I do not know the case at all.

MR BENNETT: Your Honour, that was a case involving unlawful search and seizure, so again one would have thought they would have ‑ ‑ ‑

KIRBY J: That is a long way down the track to unlawful recovery of moneys in contradiction to the terms of the Constitution where, at least unarmed by authority, one would think there is a very strong reason for saying that inherent in the constitutional assignment of the power to the Commonwealth and the breach of that assignment by the State and the recovery of moneys pursuant to the breach, that there is implied in the very scheme of the Constitution entitlement to recover it. Now, what is wrong with that? I just do not see what is wrong with that notion. This is a question the Chief Justice asked you earlier.

MR BENNETT: Your Honour, the fact is that one has the common law action for money had and received.

KIRBY J: Of course you have a common law action. I do not care about the common law. The common law is at a lower level. I am talking about the Constitution.

MR BENNETT: Your Honour, one does not imply into the Constitution any more than one does into a contract something which is not necessary to be implied.

KIRBY J: It is a very important way of upholding the constitutional instruction, the constitutional compact, the constitutional provision the people have endorsed.

MR BENNETT: If one could think of constitutional breaches which would not give rise to actions in other forms, that might be so but, in the absence of any that can be pointed to, it is difficult to see how that can arise.

GLEESON CJ: This is a very particular form of constitutional breach. This is a breach of a prohibition against exacting money in a particular form.

MR BENNETT: Yes.

GLEESON CJ: It says only the Federal Parliament can exact duties of excise.

MR BENNETT: Yes.

GLEESON CJ: Here a State has made an exaction of money in the form of a duty of excise. Why does not the Constitution say, “Give it back”?

MR BENNETT: Because, your Honour, one does not need to imply something which is already there in the common law. The common law says you have exacted money in circumstances which give rise to a quasi‑contractual cause of action. The Constitution operates to remove any immunity in relation to that action but it does not need to go further and provide a cause of action because there already is one.

McHUGH J: But was there? Before David Securities, for example, what was the position of the citizen? Unless the payment had been made involuntarily, the citizen could not recover the unlawfully exacted tax, so the citizen had no common law right.

MR BENNETT: No, but if the citizen paid under protest ‑ ‑ ‑

HAYNE J: Even without protest is there not some suggestion that the involuntariness is established by the existence of the statutory mechanisms for recovery and enforcement of the tax which, by hypothesis, is an invalid tax, but it is the existence of those mechanisms which make the payment involuntary.

MR BENNETT: Yes, your Honour. There is a distinction between a tax which is only enforceable by civil action and a tax which is enforceable by the deprivation of a licence or by the seizure of goods or by imprisonment or other penal consequences.

McHUGH J: The majority in Antill Ranger did not seem to think so in the joint judgment. They referred to the fact - or I think it was Barton - that one of the problems with the case was that there were so many people who just paid and that if the State had only dealt with those people, then maybe that legislation was valid.

MR BENNETT: But, your Honour, the point that was being used to illustrate was the point being made in the submissions of my learned friend, Mr Sexton, as well as my learned friend, Mr Meadows.

GLEESON CJ: At all events you at least go this far. You say the Constitution prevents a State from relying on any common law immunity it might otherwise have had to resist recovery of illegally extracted taxes.

MR BENNETT: Yes, your Honour, we do.

GUMMOW J: The question then is how far does the common law, informed by the Constitution…..of regulation of this right of recovery?

MR BENNETT: Yes, well that is the question one then comes to.

GUMMOW J: Yes, and that may be, as Antill Ranger at page 100 illustrates, difficult.

MR BENNETT: Yes.

GUMMOW J: …..a fairly brutal provision in Antill Ranger. The question is what lesser degrees of brutality can be permitted in the face of a constitutional mandate, it seems to me.

MR BENNETT: Yes, that is one of the problems that has to be addressed.

McHUGH J: It may be you have to apply the two‑limb test in Lange as to whether or not the burden is consistent with the Constitution. Answer, no. Question, whether or not State law is reasonably appropriate and adapted to achieving some legitimate end that is not inconsistent with the constitutional burden.

MR BENNETT: Of course, we are dealing with a general State law picked up by a general Commonwealth law rather than some specific provision of the type in Antill Ranger and Barton and, of course, in both Antill Ranger and Barton, there was an element of barring retrospectivity and time limits which were longer possible to be observed because of the date when events became clear, and those factors are not suggested in the present case. Indeed, here you have a time limit which has provision for it being bypassed where appropriate and the appellant was not able to bypass it.

GUMMOW J: Justice Hayne reminds me that in addition to that passage from Antill Ranger to which the Chief Justice referred, Chief Justice Dixon came back to this question of regulation, to use that expression, in Mason 102 CLR 108 at the top of 117.

MR BENNETT: Yes, I will have a look at that overnight, your Honour. But certainly there were cases in England which suggested that where there was an exaction colore officii one did not need to show more than that. Certainly there were cases in Australia which suggested that where there was an unlawful tax one had to go further and show some degree of duress.

HAYNE J: And it is that which Chief Justice Dixon was suggesting at 117 in Mason may be wrong.

MR BENNETT: Yes, and, of course, it does not arise today because under modern law money paid under a mistake of law can be recovered, so the issue is an issue which in a sense could only arise in the past, although it could theoretically arise in the past in that context.

Is that a convenient time, your Honours?

GLEESON CJ: Yes, we will adjourn until 10.15 tomorrow.

AT 4.16 PM THE MATTER WAS ADJOURNED
UNTIL THURSDAY, 24 OCTOBER 2002

[2002] HCATrans 412

Key Legal Topics

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Administrative Law

Constitutional Law

Statutory Interpretation

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Standing

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Statutory Construction

Proportionality