Spalvins- Kent - Russell - Deloitte Haskins & Sells v Adelaide Steamship Co

[1997] HCATrans 252

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide  No A32 of 1997

B e t w e e n -

JANIS GUNARS SPALVINS

Applicant

and

ADELAIDE STEAMSHIP COMPANY LIMITED

First Respondent

MICHAEL JAMES KENT

Second Respondent

NEIL LESLIE BRANFORD

Third Respondent

KENNETH WILLIAM RUSSELL

Fourth Respondent

MICHAEL STEVENSON GREGG

Fifth Respondent

DELOITTE HASKINS & SELLS

Sixth Respondent

DELOITTE ROSS TOHMATSU

Seventh Respondent

Office of the Registry

Adelaide  No A35 of 1997

B e t w e e n -

MICHAEL JAMES KENT

First Applicant

NEIL LESLIE BRANFORD

Second Applicant

and

ADELAIDE STEAMSHIP COMPANY LIMITED

First Respondent

JANIS GUNARS SPALVINS

Second Respondent

KENNETH WILLIAM RUSSELL

Third Respondent

MICHAEL STEVENSON GREGG

Fourth Respondent

DELOITTE HASKINS & SELLS

Fifth Respondent

DELOITTE ROSS TOHMATSU

Sixth Respondent

Office of the Registry

Adelaide  No A38 of 1997

B e t w e e n -

KENNETH WILLIAM RUSSELL

First Applicant

MICHAEL STEVENSON GREGG

Second Applicant

and

ADELAIDE STEAMSHIP COMPANY LIMITED

First Respondent

JANIS GUNARS SPALVINS

Second Respondent

MICHAEL JAMES KENT

Third Respondent

NEIL LESLIE BRANFORD

Fourth Respondent

DELOITTE HASKINS & SELLS

Fifth Respondent

DELOITTE ROSS TOHMATSU

Sixth Respondent

Office of the Registry

Adelaide  No A41 of 1997

B e t w e e n -

DELOITTE HASKINS & SELLS

First Applicant

DELOITTE ROSS TOHMATSU

Second Applicant

and

ADELAIDE STEAMSHIP COMPANY LIMITED

First Respondent

JANIS GUNARS SPALVINS

Second Respondent

MICHAEL JAMES KENT

Third Respondent

NEIL LESLIE BRANFORD

Fourth Respondent

KENNETH WILLIAM RUSSELL

Fifth Respondent

MICHAEL STEVENSON GREGG

Sixth Respondent

Applications for removal pursuant to section 40 of the Judiciary Act

BRENNAN CJ
TOOHEY J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT ADELAIDE ON THURSDAY, 4 SEPTEMBER 1997, AT 11.52 AM

Copyright in the High Court of Australia

___________________

MR D.M.J. BENNETT, QC:   May it please the Court, in the first three of those four applications, I appear with my learned friend, MR S.J. WHITE, for the applicants (instructed by Thomson Playford, Finlaysons and Phillips Fox).

MR D.A.C. ROBERTSON:   May it please the Court, in the fourth of those applications I would appear for the applicant (instructed by Mallesons Stephen Jaques).

MR T.A. GRAY, QC:   May it please the Court, I appear for the first respondent with my learned friends MR R.J. WHITINGTON, QC and MR M.F. BLUE in each matter (instructed by Valdemar Malinaric, Australian Securities Commission).

BRENNAN CJ:   Mr Bennett.

MR BENNETT:   If your Honours please.  This is an application for removal under section 40.  As your Honours are aware, this Court has reserved in Gould v Brown on the question of the validity of the cross‑vesting provisions in the Corporations Law.  This case involves the validity of the cross‑vesting general provisions.  It is our submission that it would be appropriate for the Court to have an opportunity, if that can be arranged, to consider that issue before it delivers judgment in Gould v Brown.  Your Honours will recall that in Gould v Brown, there were originally the three matters before the Federal Court, two of which involved the Corporations Law cross‑vesting provisions, and one of which involved the general ones.

The one involving the general ones and the other Corporations Law one were settled before the special leave application.  The third matter came on as Gould v Brown.  This case, in a sense, replaces the general case which was then before the Full Federal Court.

BRENNAN CJ:   If the matter was removed into the High Court, how would the question then arise?

MR BENNETT:   The question would arise, your Honour, because the proceedings are brought, we would submit, only under the cross‑vesting registration.

BRENNAN CJ:   If it is moved into the High Court, what jurisdictional question arises then?

MR BENNETT: There is the question arising under the Constitution, which is whether a State Act can validly confer jurisdiction upon the Federal Court.

BRENNAN CJ:   I know what the question is.  What I am asking you is how does section 40 leave the way open to considering it.  If you remove the action into the High Court, the action is then in the High Court?

MR BENNETT:   Yes, your Honour.

BRENNAN CJ:   So the question is solely whether the High Court has jurisdiction.

MR BENNETT:   Your Honour, yes.  I do not want to avoid your Honour’s question.  We seek, primarily, to remove that part of the action which involves the question whether there is jurisdiction.  But leaving that aside for the moment, the High Court has jurisdiction as any other court does to determine its jurisdiction.  If the effect of our argument is that the Federal Court has no jurisdiction, this Court has jurisdiction under section 40 to determine that it and the Federal Court have no jurisdiction.  The Court always has jurisdiction to answer that question and it is clear law that anybody, whether a court or an inferior tribunal, can always have jurisdiction to determine its own jurisdiction.  In a sense, it is the starting point.

BRENNAN CJ:   But what you are saying is that, under section 40, we have jurisdiction to determine another court’s jurisdiction.

MR BENNETT:   Your Honour, if that is a question arising in the proceedings, yes.  One question arising in the proceedings is whether the Federal Court has jurisdiction.  That is a constitutional question.

BRENNAN CJ:   Now, the other way of looking at is, if the Federal Court has no jurisdiction, there is nothing to remove.

MR BENNETT:   Your Honour, there are a number of answers to that.  That would have been an answer to almost every claim of certiorari or prohibition against a body acting without jurisdiction.  But under section ‑ ‑ ‑

BRENNAN CJ:   That cannot be right, Mr Bennett.  You are exercising supervisory jurisdiction in that situation.

MR BENNETT:   If I am right in assuming there is no jurisdiction, the effects of the determination would be, we determine we have no jurisdiction and, therefore, proceed no further.  The court always has power to do that, including this Court.  Once one says that a court has jurisdiction to determine its jurisdiction, that includes jurisdiction to determine that it has no jurisdiction and, therefore, removing the proceedings to this Court would confer on this Court power to determine that the Federal Court, and therefore it, have no jurisdiction.

BRENNAN CJ:   Why would that problem arise if the action is removed into the High Court?

MR BENNETT:   The action would arise, because it is a preliminary question in the action, is the jurisdiction.

BRENNAN CJ:   But we would not then be concerned with the jurisdiction of the Federal Court.  We would be concerned with the jurisdiction of the High Court.

MR BENNETT:   But the question would be co-extensive, your Honour.

BRENNAN CJ:   How would that be?

MR BENNETT:   Because if the action is removed or the matter is removed, the matter is one as to which there is no jurisdiction.  There would equally be no jurisdiction in this Court.

BRENNAN CJ:   On what basis do you put that?

MR BENNETT:   Your Honour, because the sole basis is an invalid legislative provision and without that, the action is a State action.

BRENNAN CJ:   But there is no matter?

MR BENNETT:   There is a matter in relation to which there is no jurisdiction and the preliminary question in the matter would, therefore, be determined in that way.

KIRBY J:   You have demonstrated in your conversation with the Chief Justice that there is an added complication that occurs by reason of the matter being removed into this Court.  The decision in Gould has, for various reasons that you would be well familiar with, to be determined relatively soon.

MR BENNETT:   Yes.

KIRBY J:   And that being the case, convenience, if not law, would seem to dictate that you should just carry on as you are in the court below and wait until Gould comes out, and that will not be very long.

MR BENNETT:   The problem with that, and the problem, we would submit, the general problem for the legal community would be that one possibly result in Gould would leave - or a number of possible results - might leave an area of doubt over the State cross‑vesting schemes without determining one way or the other whether they are valid.  If that is the case ‑ ‑ ‑

KIRBY J:   I do not say anything about the resolution of Gould, but my recollection is that the issues addressed were of a fundamental character.  Were you not in Gould?

MR BENNETT:   No, your Honour, I was in the case below but my client is one of those who settled in that case.

KIRBY J:   I see.  It is some time since the matter was argued, but my recollection is that the issues raised were of a fundamental constitutional character and, in any case, you would have any opportunity that you wished to advance after Gould is available to the whole legal profession.  It is a matter of convenience, really.  To take it up now, when Gould stands for judgment, when the whole matter has been argued, when it has to be determined soon and to deal with your application out of its turn, not only adds to the complication that the Chief Justice has raised, but it is a matter of inconvenience.  The Court would have to be brought on very soon, and there is the problem of constituting a Court differently because of the change in the personnel of the Court.

MR BENNETT:   Your Honour, one has till February and we were going to ask if the removal took place, that the matter be heard on a single day - either during September or October - with a view to the issue being determined simultaneously with Gould.  But that is a matter for the convenience of the Court as to which I cannot address.  But my basic submission is that the question is one of great importance.

On one view, it may not be determined by Gould, and we would submit it is desirable that the Court have before it the Corporations Law arguments that were put in Gould, as well as the more general arguments from that case and another case which puts forward specifically the general arguments, so the Court can deal with them together.  Bearing in mind what has taken place in Gould, it would be an appropriate case for quite short time limits, so the matter could easily be dealt with in a day, and counsel could be asked not to repeat matters that were argued in Gould.  The transcript is available and we have all seen it.  I have included in my submissions in reply an extract from the argument in Gould, where your Honours will see that - do your Honours have a bound volume of submissions?

BRENNAN CJ:   I do not think so.  We have your submissions in reply.

MR BENNETT:   It is in my submission in reply on page 9, your Honours.

KIRBY J:   But is that not against you?  That indicates, as I indicated to you, that the arguments were put on the general issue of the cross‑vesting scheme.

MR BENNETT:   Yes, your Honour.

KIRBY J:   That is because the attack on the scheme was of a fundamental constitutional character.  State parliaments cannot confer jurisdiction on federal courts.  That could be true, if it be good point, in respect of the Corporations Law as it is of the general cross-vesting ‑ ‑ ‑

MR BENNETT: Yes, the only difference, your Honour, is that in relation to section 56 of the Corporations Law, the accepting provision, there is an argument about corporations power which may go beyond the argument I support in the general - - -

KIRBY J:   It is a Chapter III point, it is not to do with section 51.

MR BENNETT:   Certainly the main point is, your Honour, yes.  If your Honours are against me on the convenience issue, I would ask your Honours to move an application over generally, with a view to it being restored or withdrawn after the judgment comes down in Gould.

BRENNAN CJ:   Mr Bennett, what is the state of the proceedings in the Federal Court?  Has there been some challenge to the jurisdiction there?

MR BENNETT:   No, your Honour, there has not.

BRENNAN CJ:   Then what is the aspect of the matter that you seek to have removed?

MR BENNETT:   The aspect, your Honour, of the question whether the court has jurisdiction or not.

BRENNAN CJ:   But that is not an issue before the - that is not in the matter before the Federal Court.

MR BENNETT:   Your Honour, we submit it is in the matter in the sense that every court has to determine its own jurisdiction.

BRENNAN CJ:   That is undoubtedly correct as a general proposition, so that the court has jurisdiction to determine its own jurisdiction.  There is no issue between the parties in the Federal Court as to the Federal Court’s jurisdiction.

MR BENNETT:   Your Honour, it is an issue which does not have to be pleaded.  We have set out - - -

BRENNAN CJ:   It does not have to be pleaded, but it does have to be raised.

MR BENNETT:   Your Honour, we would submit the issue is there, whether it is formally raised in court or not.  Because, at some stage, the judge has to be satisfied that he has jurisdiction and while there is a matter of - - -

KIRBY J:   But you see, taking up the Chief Justice’s point, there is another reason, because as I understand it, there is a contention by the respondents that there is a basis for the jurisdiction of the Federal Court quite apart from the cross‑vesting legislation, and only by raising that matter will you have that issue determined in the Federal Court, and not trouble us unless you have to.

MR BENNETT:   No, that is certainly so.  That is a very short issue.  It is an issue which we submit could be dealt with in five minutes.  The section says that the commission has power to bring proceedings in the name of a company where there is a cause of action.  My friend’s submission involves saying the proceedings are a matter arising under the Act which gives that power.  We submit that is so clearly wrong that it is not going to take very long to deal with that.  That is a very short aspect and an aspect of pure law.

KIRBY J:   That may be so, but it would ordinarily be first dealt with by the court in which the objection is taken, but has not yet been taken.

MR BENNETT:   Your Honour, the reason we have come to this Court at this time is the imminence of Gould v Brown, and the purpose of bringing this application is to give this Court the opportunity, which we would submit it ought to take, to determine this matter and Gould v Brown at the same time.  That is the reason it has been brought at this stage.

BRENNAN CJ:   The problem I see is that the vehicle is utterly unsuited to the purpose.  In the first place, there has been no challenge to the jurisdiction of the Federal Court made in that court, which is the primary place at which any such challenge to the jurisdiction ought to be made.  So that there is no identified issue which, having been raised in the Federal Court, can be removed as a separate issue into this Court.  If we were to remove the whole action, then the question would be this Court’s jurisdiction.  If this Court’s jurisdiction to determine the whole action were in question, it would be questioned by the party who sought this Court’s intervention to entertain the action, and that on the basis that there was nothing which is justiciable in the Federal Court which was capable of being determined there and, therefore, that which was removed was not justiciable.  There seems to be no foundation on which the Gould v Brown issues could even be raised effectively, or at least efficiently, in this Court.

MR BENNETT:   Your Honour, in relation to the first matter, we simply repeat that under decisions in Cockle v Isaksen and Thomson Australia Holdings v Trade Practices Commission, the jurisdictional issue is there whether one raises it or not and, therefore, it is a part of the cause.  And so far as the second matter is concerned, I just repeat my submission that once it is in this Court, there is jurisdiction to determine jurisdiction and the fact that the question we are asking the Court to consider is that question does not really raise any inconsistency.

BRENNAN CJ:   What would you say about a granting of the motion to remove under section 40 and an immediate remittal to the Supreme Court of South Australia?

MR BENNETT:   Your Honour, I would not invite that course.

BRENNAN CJ:   No.  It seems to me we are playing games, Mr Bennett.

MR BENNETT:   Your Honour, I have made my submissions to your Honours in relation to that.

BRENNAN CJ:   Mr Robertson.

MR ROBERTSON:   I have nothing to add, your Honour.

BRENNAN CJ:   The application is refused with costs.

MR GRAY:   I seek costs, your Honour?

BRENNAN CJ:   Have you anything to say about that?

MR BENNETT:   No, your Honours.

BRENNAN CJ:   The application is refused with costs.

AT 12.09 PM THE MATTER WAS CONCLUDED