Sutton & Ors v Alley

[2001] HCATrans 267

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M28 of 2000

B e t w e e n -

JOHN DAVID SUTTON

First Applicant

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

Second Applicant

RONALD GEORGE OWENS (as representing the members of the BLF as at 31 March 1994 other than those otherwise represented herein)

Third Applicants

JOHN CUMMINS, JOHN SETKA and ROBERT GREGORY WILSON (as Trustees of the BLF)

Fourth Applicants

and

STEPHEN GEORGE ALLEY

First Respondent

THE STATE OF VICTORIA

Second Respondent

JOHN ATKINSON & ORS

Third Respondents

JOSEPH FERGUSON & ORS

Fourth Respondents

MICK YOUNG & ORS

Fifth Respondents

Application for special leave to appeal

GAUDRON J
KIRBY J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 10 AUGUST 2001 AT 9.34 AM

Copyright in the High Court of Australia

__________________

MR S.C. ROTHMAN, SC:   If the Court pleases, I appear with my learned friend, MR H. BORENSTEIN, for the applicants.  (instructed by R.L. Whyburn & Associates)

MR K.H. BELL, QC:   If the Court pleases, I appear on behalf of the first and second respondents with my learned friend, MR C.M. CALEO.  (instructed by Victorian Government Solicitor)

MR J.W. ROBINSON:   If it please the Court, I appear on behalf of the third respondents.  (instructed by Best Hooper)

MR C.S. SMALE:   If it please the Court, I appear on behalf of the fifth‑named fifth respondent.  (instructed by Robert Dalton)

GAUDRON J:   I see.  Now I thought there was going to be nobody for the fifth respondent.

KIRBY J:   You are the fifth-named fifth respondent?

MR SMALE:   Fifth-named fifth respondent.

KIRBY J:   Can you get any lower in the list than the fifth-named respondent?  You are the very last of the parties in this long saga?

MR SMALE:   Yes.

GAUDRON J:   Yes.  Thank you.

MR M. GREANY:   If the Court pleases, third-named fifth respondent.  I represent myself.

GAUDRON J:   Yes, thank you, Mr Greany.  And is there another fifth respondent?

MR ROBINSON:    Mr Dalton and Mr Young usually do turn up, but Mr Dalton has a long way to come and perhaps he has decided not to.

GAUDRON J:   Yes, thank you.

KIRBY J:   They are getting very tired of this long case.

GAUDRON J:   Yes, Mr Bell.

MR BELL:   If your Honours please, I make an application on behalf of the second respondent for the further adjournment of this matter.  The basis of the application is supported by the affidavit of the first respondent, with which the Court has been supplied.  The substance of the application is that there has now been made an order which confers upon the first respondent the power to vest the subject assets in a person.

KIRBY J:   What do you say to the suggestion in the letter that we have just received that the whole thesis behind the execution of this new Order in Council is that the custodian presently has the funds, whereas that is what the applicants are contesting?

MR BELL:   That may be right or it may be wrong and it may be necessary for the Court to decide or not, depending upon the manner in which the vesting power is exercised and the reaction of the parties to the exercise.

KIRBY J:   Could you just clarify of the parties, who agrees to the adjournment and who disagrees?

MR BELL:   The applicants.

KIRBY J:   The applicants agree, you ask, Mr Alley asks, and it the other parties that resist?

MR BELL:   Yes, that is correct and, with respect, the submission in the letter does not answer the fundamental proposition that the second respondent advances, which is that these proceedings may well be moot if allowed to go to trial and, that being so, the better course is for the course of most convenience to be adopted, which is to allow their adjournment so that the vesting power can be exercised, if that is what the custodian determines to do.

KIRBY J:   Well, that is one way to look at it.  The other way to look at it is, if the application proceeds, as this Court on the last occasion said it would expect it to do, and if special leave is refused, then the custodian undoubtedly has the custody of the funds, the Order in Council is undoubtedly and unquestionably correct, the custodian could dispose of the funds as he chooses under the new Order in Council and the parties go away and do not trouble us again, at least at this level.  They might come again and fight on the second Order in Council.

MR BELL:   They might, but that is to be hoped not.

KIRBY J:   Anything can happen in this case.

MR BELL:   Yes, anything can happen and that is why the status quo is best left where it is and that is what activates the custodian to make a submission in support of the application for the adjournment and he is to be taken as having considered the two sides of the coin which, with respect, your Honour Justice Kirby has correctly identified.  It is a discretionary matter for the Court, of course, and yes, the Court on the last occasion said that there would be but one adjournment contemplated.  However, the course taken by the Governor in Council to confer a vesting power is a reasonable one and would lead to a resolution of the underlying dispute concerning the status of the assets, whereas a further proceeding in this Court would not necessarily lead to that resolution.

KIRBY J:   But would not dismissal of the application resolve that question?  If this Court today refused special leave, if it took the view that the whole matter had been disposed of by the Full Court and within the spirit of the decision of this Court in the earlier matter, then that confirms the position of the State of Victoria and of the Honourable Mr Alley, and that is the end of the case.

MR BELL:   With respect, no, your Honour, because the underlying dispute is not only what is the current status of the assets, but what is to be the future status of the assets.

KIRBY J:   But if special leave were refused, then there would be no possibility of any contest that Mr Alley as custodian is entitled to - he has the funds, he has the legal right to the funds and he has now the new Order in Council to go ahead and act under that new Order in Council.

MR BELL:   Yes, that is true, but Mr Alley’s responsibilities are not only with respect to the assets, as he currently contends he is possessed of them, indeed vested with them, but responsibilities with respect to what should he do with them.  The proceedings before the Court are part of the pattern of proceedings which maintains a status quo.  What I was putting, your Honours, was that the proceedings before the Court do not impact only upon the question of what is the current status of the assets, but impact upon the disposition by Mr Alley of his vesting power, which determines once and for all their future status, because the proceedings before the Court form part of a pattern of legal proceedings which have their root in undertakings given to courts below, which guarantee the status of the assets, such that Mr Alley can faithfully exercise his vesting power.

KIRBY J:   Mr Alley expresses in his affidavit no doubt but that he has access to and that the funds themselves are completely safe.

MR BELL:   That is correct.  That has been so for some time.  On the last occasion that proposition was disputed by my learned friend, Mr Robinson, but Mr Alley has gone on oath in regard to that matter in the affidavit before this Court, and informed the Court that the assets are safe, that the money is subject to the undertaking and the property the subject of the Queen’s caveats.  So that the assets being safe, the course of most convenience is not to disturb that status quo, but allow the more fundamental power now conferred upon Mr Alley to be exercised, so that not just the question of the present status of the assets can be resolved but that the permanent status of the assets can be resolved.

On prejudice, it is submitted that there is none or little in respect of those opposing the adjournment.  The second respondent is prepared to pay any costs thrown away.  If it ever were to become necessary for the Court to hear the proceedings, then it could do so.  There would be no likelihood of dissipation or a deterioration of the assets which are held safe in the manner to which I have referred.  The reason for the six months adjournment being necessary are well explained in the affidavit of Mr Alley and the period is, we submit, a reasonable one and one likely to lead to a result which has the effect of resolving the matter and rendering the current proceedings moot.  If the Court pleases.

GAUDRON J:   Yes, we will hear those who wish to speak in opposition to the application.   Before doing so I should note that I hold a certificate from the Deputy Registrar to the effect that she has been informed by Athena Tourki, the solicitor for the fourth respondent, that she has no instructions to appear and nor will any of those named as fourth respondents be appearing today, and a further certificate from the Deputy Registrar certifying that she has been informed by Mr Mick Young, the first‑named of the fifth respondents, that he does not seek to put any arguments in this matter and will submit to any order of the Court, save as to costs.  Now, who speaks in opposition to the adjournment?

MR ROBINSON:   I begin, your Honours.  Mr Bell says that the Order in Council will finally dispose of these assets but, of course, they will not.  The Order in Council will not do that unless this application for leave and the alleged as of right appeal are both discontinued or withdrawn.  If that does not happen, then the process that Mr Alley proposes to conduct will ‑ ‑ ‑

GAUDRON J:   I do not know that that is right.  There is no appeal instituted unless and until special leave is granted.

MR ROBINSON:   That is not the contention.

GAUDRON J:   Leave.  Yes, unless leave ‑ ‑ ‑

MR ROBINSON:   Yes, but that is not the contention of the applicants.  They have filed a notice of appeal, admittedly out of time, so they would require the Court’s dispensation to have that dealt with at all.

KIRBY J:   I do not think you need take time on that, either.

GAUDRON J:   They need the Court’s leave, in any event.

MR ROBINSON:   That would be my submission.

GAUDRON J:   Yes.

MR ROBINSON:   They could sort of have time with Mr Alley, if they choose to participate in that, or they could just stand on their dig and say, “Well, we say that the assets belong to us and the High Court will eventually rule that the assets do belong to us”, and in that event Mr Alley’s proceedings will be a waste of time.  Why should my clients and the other parties who might be interested in those assets ‑ ‑ ‑

GAUDRON J:   Now, could you just explain who your clients are?

MR ROBINSON:   They are former members of the BLF.  At the time the assets were seized and on numerous occasions subsequently, it was stated by the Minister in power from time to time that eventually there would be legislation to have the seized assets distributed amongst the persons who were members of the BLF at the date of derecognition.  It is on that basis that my clients were invited to join in the original proceeding by advertisements placed in the newspapers in 1994 and it was on that basis that they have participated in these proceedings in an endeavour to keep the assets with the custodian so that the custodian could, when Parliament legislated in that regard, distribute the assets to them.

Now, if at the end of the process that Mr Alley proposes to conduct the CFMEU says, “Well, we don’t like your decision.  We’ll go back to the High Court and we’ll argue our rights there”, then the whole time and effort ‑ ‑ ‑

GAUDRON J:   If leave is granted.  They can argue their rights only if leave is granted.

MR ROBINSON:   I understand that, but the situation is that unless this application is heard and dealt with today, Mr Alley’s exercise may be a complete waste of time.  If leave is granted today and ultimately the appeal is successful, then Mr Alley has nothing to decide and no assets to distribute.

GAUDRON J:   I am not entirely sure that that is right.

MR ROBINSON:   No, the money – it is my contention that this Court’s judgment on the last occasion means that the money was put well beyond the reach of the BLF to dispose of in the amalgamation agreement and if that is the Court’s ruling - and special leave if granted at all would be restricted to rights to the real estate.

KIRBY J:   It is only leave in this case, is it not?

MR ROBINSON:   I am sorry, if leave is granted.

KIRBY J:   This is one of those exceptional cases where leave is all that is required which means that the hurdle is less, it is a lower hurdle to jump over.

MR ROBINSON:   Yes, very well.  But if leave is granted, it would be our contention that it should be granted only in respect of the real estate, but even so, if Mr Alley makes a determination that includes distribution of the real estate then, unless the leave application is dealt with today, he may be trying to give away something that he has no right to give away and if he cannot give away the real estate, that may impact on the decision he makes with giving away the money which, as we contend, is beyond the reach of the CFMEU in this proceeding or any other proceeding.

KIRBY J:   Yes, but Mr Alley is the custodian.  He has always been the custodian after Dr Sharp died.

MR ROBINSON:   Yes.

KIRBY J:   He is the person who you contend has the power over the funds.  He is the person who has put an affidavit before us referring to a new Order in Council.  He wants to have time to exercise his powers under that and if he exercises it in a particular way you might, and all other parties might, be content, and then the whole issue goes away.

MR ROBINSON:   That is true but, unless this leave application is dealt with today, it is always open to the CFMEU to go through that process and then if they do not like the decision turn around and say, “Well, we don’t like that decision, we’ll go back to the High Court”.  So this proceeding remains on your lists for another six to eight months and then the leave application is dealt with and then any subsequent appeal is dealt with and this is a proceeding which was commenced below on 6 April 1994.  I think the time is to bring it to finality.  The Order in Council does not bring the matter to finality at all.  It sets up this inquiry whereby the custodian will purport to distribute assets over which he has no control.

GAUDRON J:   Over which he has no control?

MR ROBINSON:   Well, he does not have the funds in hand and he resolutely refuses to join in the application I have commenced below to have the moneys handed back.

KIRBY J:   He says he is perfectly content that the funds are in a safe situation and that he has access to them when he wants it.

MR ROBINSON:   Well, he did ask for them at an earlier stage and they were not handed over.

KIRBY J:   They will abide the outcome of proceedings.  The suggestion that is now made to us and it is made by the person who has the responsibility, the independent custodian, he asks us to delay it so that he can look at the matter, hear submissions, including, no doubt, from your client, and perhaps dispose of the whole matter to the contentment of everybody.  In that event, we are not troubled.

MR ROBINSON:   It would be difficult to see why the CFMEU would agree to anything that gave them less than everything they now have because that could be the outcome of this leave application and the appeal, if that is what they pursue.  It gives them two bites at the cherry, effectively.  They can go to Mr Alley and see how they fare there and if they do not like what they get there then they come back here, whereas if this application is dealt with today, Mr Alley can conduct his inquiry at an appropriate stage, either when this leave application is dismissed or when any appeal that flows therefrom has been disposed of.  Those are the matters that I wanted to bring to the Court’s attention.

GAUDRON J:   Yes, thank you.  Do you speak against the adjournment application as well?

MR SMALE:   I do, your Honours, but I simply adopt the submissions made by Mr Robinson.

GAUDRON J:   Yes.  Thank you, Mr Smale.  Mr Rothman.

MR ROTHMAN:   Your Honour, we support the application for an adjournment and the adjournment.  The situation is that the new Order in Council significantly changes the substantive matter that is before this Court and the substantive matter of effect of the Orders in Council.

KIRBY J:   Does it really or do we not simply deal with the matter on the basis that was before the Court earlier?  This is a new development that may have some practical consequences but it does not affect the legal rights of the parties.  They depend on the law as it stood at the time of the proceedings.

MR ROTHMAN:   Your Honour, there are a number of aspects to it.  I accept what your Honour says in one sense but not in another.  We say, firstly, that depending upon the outcome the whole of these proceedings may be rendered academic.  It is likely to render what I will call a paragraph 8 point, that is the administrative law point that was not dealt

with on the merits.  Whatever the outcome before Mr Alley, that is likely to be rendered an academic point, regardless of exercises performed.

In my respectful submission, it does change the Order in Council in a way which affects the legal rights for this reason, that it affects the circumstances, that is the whole of the legislative scheme, and it affects the argument relating to proportionality which necessarily arises under section 92.  In my respectful submission, for those reasons, and given that there seems on the face of it to be no prejudice other than perhaps to my client in relation to an adjournment - and I say my client simply because at the moment by the undertakings that are given, we are paying interest at a higher rate than can otherwise be earned.

On the face of it, the legal title of the assets is now with the custodian.  There is no stay of the Full Court judgment.  The physical position of the assets is in the hands of his Honour Chief Justice Wilcox of the Industrial Relations Court in relation to orders for the enforcement of – that is proceedings for the enforcement of the other orders which are stayed by consent.  In those circumstances, your Honour, the Alley proceedings, if they are proceedings, significantly alter the status of the parties and the issues before the Court.

We were unaware of any statement by the government that at the end of the day there would be a distribution to the persons who were members of the BLF at the time of the seizure of the funds and our understanding is that my learned friend joined as a party pursuant to orders that were made by his Honour Chief Justice Wilcox made by consent between my learned friend Mr Bell’s client and my client.  The situation in relation to Mr Robinson, of course, is that he represents some members of the BLF.  The vast majority of members of the BLF are represented by other parties who have put in appearances at all stages of the proceedings, and/or supported that which is put by the applicants in these proceedings.

In the circumstances, in our respectful submission, it is appropriate for the application for leave to appeal to be adjourned for the period sought by my learned friends.

GAUDRON J:   Yes, thank you.  Mr Greany, what do you say?

MR GREANY   If your Honours please, I would like to oppose the adjournment of this case.  It has been going on for 14 years and every time they went to the court – in March 2000 it went before the federal Industrial Relations Court.  The CFMEU has seen fit to appeal to the High Court.  The High Court sent it back to the Federal Court to hand down its final judgment and after that then the CFMEU decided to appeal against those judges’ decisions again and also, the union was deregistered.  Steve Crabb,

who was the Industrial Relations Minister under the Cain Labor Government, said the only way to resolve it would be to sell the property and the assets and split it up amongst the financial members of the union at the time of the deregulation.

Also, the Minister under the Kennett Government for the Industrial Relations said the same thing, so, therefore, it looks like to me that the CFMEU and their solicitors are opposing every judge’s decision that comes before them.  Apparently, their industrial relations officer for the solicitors, Mr Pasfield, must be seeking the position of a High Court Judge, so therefore he would make the decisions in favour of the CFMEU, so therefore, I am objecting completely for any adjournment of this.

Also, your Honours, in The Sun on 27 July there was a piece where the CFMEU and the State Government - it was printed in The Sun - where they had almost reached an agreement on the assets of the BLF.  If the State Government is trying to reach an agreement with the CFMEU over the custodian, it is a waste of time giving it back to the custodian, and it also a waste of time for this Court making any decision because a decision ‑ ‑ ‑

GAUDRON J:   Yes, but Mr Greany, it is not a question of agreement between the State Government and the CFMEU, it a question – no agreement between the State Government and the CFMEU is relevant.  It is what the custodian ultimately decides.  The matters you are putting to us are surely matters that you could put to the custodian and they are not matters that would bear on the outcome of the proceedings in this Court.

MR GREANY   Yes, but, your Honour, what…..the State Government is trying to overrule the High Court and the custodian by making a private deal outside the courts with the CFMEU.

CALLINAN J:   You can talk about what you have read in the newspaper for as long as you like but I do not intend to pay any attention to it at all.  We can only act on evidence which has been put before the Court in a proper way and you are wasting your time, so far as I am concerned, talking about something that has appeared in a newspaper.

MR GREANY   Thank you, your Honour.

GAUDRON J:   We are prepared to grant the adjournment, Mr Bell.  I take it you are prepared to pay the costs of the adjournment application?

MR BELL:   Yes.

GAUDRON J:   Of all parties?

MR BELL:   Of all the opposing parties, your Honour.  The second respondent is prepared to pay the costs of the opposing parties thrown away on the adjournment.

GAUDRON J:   Very well.  The adjournment, however, will be to the first special leave day in Melbourne at the expiration of six months from today’s date.  The second respondent is ordered to pay the costs of the opposing parties thrown away by today’s adjournment and the costs of the adjournment application.

AT 10.00 AM THE MATTER WAS ADJOURNED