FRENCH CJ, GUMMOW, HAYNE, HEYDON, CRENNAN, KIEFEL AND BELL JJ
PETER JAMES SPENCER APPLICANT
AND
COMMONWEALTH OF AUSTRALIA RESPONDENT
Spencer v Commonwealth of Australia [2010] HCA 28 1 September 2010 S87/2009
ORDER
1.Special leave to appeal granted.
2.Appeal treated as instituted and heard instanter and allowed with costs.
3.The orders of the Full Court of the Federal Court of Australia made on 24 March 2009 be set aside and in lieu thereof it be ordered that:
(a)The appeal be allowed with costs.
(b)Orders 2 and 3 of the orders made by Emmett J on 28 August 2008 be set aside and in lieu thereof it be ordered that:
(i)The respondent's motion of 26 July 2007 be dismissed.
(ii)The respondent pay the applicant's costs of the motion.
On appeal from the Federal Court of Australia
Representation
P E King with D H Godwin for the applicant (instructed by McKells)
S J Gageler SC, Solicitor-General of the Commonwealth with A Robertson SC and C L Lenehan for the respondent (instructed by Australian Government Solicitor)
Interveners
R J Meadows QC, Solicitor-General for the State of Western Australia with R M Mitchell SC intervening on behalf of the Attorney-General for the State of Western Australia (instructed by State Solicitor for Western Australia)
P M Tate SC, Solicitor-General for the State of Victoria with S P Donaghue intervening on behalf of the Attorney-General for the State of Victoria (instructed by Victorian Government Solicitor)
M G Hinton QC, Solicitor-General for the State of South Australia with S A McDonald intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor for South Australia)
J K Kirk intervening on behalf of the Attorney-General for the State of New South Wales (instructed by Crown Solicitor (NSW))
B W Walker SC with L T Livingston intervening on behalf of NSW Farmers Association (instructed by NSW Farmers Association)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Spencer v Commonwealth of Australia
Practice and procedure – Federal Court of Australia – Summary judgment – Application by respondent to dismiss proceedings summarily under s 31A(2) of Federal Court of Australia Act1976 (Cth) – Applicant claimed New South Wales legislation, said to be enacted pursuant to informal arrangements with Commonwealth, effected an acquisition of property other than on just terms – Applicant sought declarations that intergovernmental agreements, and Commonwealth legislation authorising them, were invalid under s 51(xxxi) of Constitution – Whether Court could be satisfied applicant had no reasonable prospect of successfully prosecuting proceeding – Effect of ICM Agriculture Pty Ltd v The Commonwealth (2009) 240 CLR 140, delivered after decisions below, on prospects of success.
Statutes – Construction – Summary judgment – "no reasonable prospect".
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Spencer v Commonwealth of Australia [2010] HCA 28
Case
[2010] HCA 28
Decision Date
CaseChat Overview and Summary
The case of *Spencer v Commonwealth of Australia* concerned an application by the Commonwealth to dismiss proceedings summarily under s 31A(2) of the *Federal Court of Australia Act 1976* (Cth). The applicant, Mr Spencer, alleged that New South Wales legislation, enacted pursuant to informal arrangements with the Commonwealth, effected an acquisition of property other than on just terms, contrary to s 51(xxxi) of the Constitution. Mr Spencer sought declarations that the intergovernmental agreements and the Commonwealth legislation authorising them were invalid.
The legal issues before the High Court of Australia included whether the Federal Court could be satisfied that Mr Spencer had no reasonable prospect of successfully prosecuting his proceeding, and the effect of the High Court's subsequent decision in *ICM Agriculture Pty Ltd v The Commonwealth* on the prospects of success. The primary judge and the Full Court of the Federal Court had both dismissed Mr Spencer's case, finding that he had no reasonable prospect of success. The Full Court identified three fundamental problems with Mr Spencer's case: the operation of s 51(xxxi) and s 96 of the Constitution as interpreted in *Pye v Renshaw*, the indistinguishable nature of the New South Wales Court of Appeal's decision in *Arnold v Minister Administering the Water Management Act 2000*, and Mr Spencer's acceptance of the validity of the State Acts, which meant the impugned prohibitions would continue even if the Commonwealth Acts were invalid.
The High Court considered the correct approach to the application of s 31A(2) of the *Federal Court Act*, noting that a proceeding need not be "hopeless" or "bound to fail" to have no reasonable prospect of success. However, the High Court allowed the appeal, setting aside the orders of the Full Court. The Court found that the lower courts had erred in their application of s 31A(2).
Special leave to appeal was granted, and the appeal was treated as instituted and heard instanter. The High Court allowed the appeal with costs, setting aside the orders of the Full Court of the Federal Court and ordering that the respondent's motion to dismiss the proceedings be dismissed, with the respondent to pay the applicant's costs of that motion.
Orders
Orders of the court
1. Special leave to appeal granted.
2. Appeal treated as instituted and heard instanter and allowed with costs.
3. The orders of the Full Court of the Federal Court of Australia made on 24 March 2009 be set aside and in lieu thereof it be ordered that:
(a) The appeal be allowed with costs.
(b) Orders 2 and 3 of the orders made by Emmett J on 28 August 2008 be set aside and in lieu thereof it be ordered that:
(i) The respondent's motion of 26 July 2007 be dismissed.
(ii) The respondent pay the applicant's costs of the motion.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
FRENCH CJ
HAYNE, CRENNAN, KIEFEL AND BELL JJ
HEYDON J
His Honour concluded that there was no serious question to be tried or, "[p]utting it the other way", that there was no "reasonable prospect" that Mr Spencer would succeed in obtaining the final relief that he claimed in the proceeding[23]. In relation to Mr Spencer's claim for interlocutory relief, his Honour also expressed the obiter opinion that the balance of convenience did not warrant the grant of an injunction[24]. [23][2008] FCA 1256 at [193].[24][2008] FCA 1256 at [210].The decision of the Full Court The Full Court dismissed Mr Spencer's appeal on 24 March 2009, several months before the hearings in this Court of ICM and Arnold. The leading judgment in the Full Court was written by Jagot J, with whom Black CJ and Jacobson J agreed. Her Honour held that Mr Spencer's case faced three fundamental problems which he was unable to overcome. They were[25]: 1.This Court's decision in Pye v Renshaw[26] concerning the operation of s 51(xxxi) and s 96 of the Constitution.2.The decision of the New South Wales Court of Appeal in Arnold v Minister Administering the Water Management Act 2000[27] which was indistinguishable from the present case.3.Mr Spencer's acceptance of the validity of the State Acts which had the consequence that, even if the Commonwealth Acts and intergovernmental agreements were invalid, the NV Act 2003 would continue in force as the source of the prohibitions and restrictions of which he complained. [25](2009) 174 FCR 398 at 406 [15].[26](1951) 84 CLR 58; [1951] HCA 8.[27](2008) 73 NSWLR 196. Her Honour rejected the submission that the Commonwealth/State arrangements in this case were a mere device to circumvent s 51(xxxi), which could be impugned on the basis that the Commonwealth could not do indirectly that which it could not do directly[28]. This, her Honour said, overlooked the operation of s 96 of the Constitution and the clear statement in Pye[29]. There was no direct legal link between the Commonwealth and State Acts analogous to that in P J Magennis Pty Ltd v The Commonwealth[30]. [28](2009) 174 FCR 398 at 408 [21].[29]See (1951) 84 CLR 58 at 83, where the Court rejected the argument that "the Commonwealth is not authorized by s 96 or any other provision of the Constitution to provide money for a State in order that the State may resume land otherwise than on just terms".[30](1949) 80 CLR 382; [1949] HCA 66. The decisions of the primary judge and of the Full Court of the Federal Court applied s 31A(2) of the Federal Court Act to defeat Mr Spencer's claim. It is necessary to consider the correct approach to the application of that provision. Federal Court Act, s 31A Section 31A(2) of the Federal Court Act provides: "The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a)the first party is defending the proceeding or that part of the proceeding; and (b)the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding."A proceeding need not be "hopeless" or "bound to fail" for it to have no reasonable prospect of success[31]. Section 31A(1) provides for a party prosecuting a proceeding to obtain summary judgment against a respondent. The section does not limit any other powers that the Court has[32]. [31]Federal Court Act, s 31A(3).[32]Federal Court Act, s 31A(4).
Ratio Decidendi
Legal Principle Established
Established by:
FRENCH CJ,
HAYNE, CRENNAN, KIEFEL AND BELL JJ,
HEYDON J