Wakim Ex parte McNally and Ors

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S74 of 1998

RE THE JUDGES OF THE FEDERAL COURT OF AUSTRALIA
First Respondents
GEORGE WAKIM
Second Respondent
Ex parte –
PETER J. McNALLY and TERENCE McNALLY
Prosecutors

Office of the Registry
Sydney No S107 of 1998

RE THE JUDGES OF THE FEDERAL COURT OF AUSTRALIA
First Respondents
GEORGE WAKIM
Second Respondent
Ex parte –
CHOLMONDELEY DARVALL QC

Prosecutor

Office of the Registry
Sydney No S118 of 1998

In the matter of –
Applications for Writs of Prohibition and Certiorari against SUSAN AGNEW, formerly a Registrar of the Federal Court of Australia
First Respondent
THE HONOURABLE BRIAN JOHN MICHAEL TAMBERLIN, A Judge of the Federal Court of Australia
Second Respondent
THE JUDGES AND REGISTRARS OF THE FEDERAL COURT OF AUSTRALIA
Third Respondents
MARTIN RUSSELL BROWN, Liquidator of Amann Aviation Pty Limited and AMANN AVIATION PTY LIMITED (IN LIQUIDATION) and BP AUSTRALIA LTD
Fourth Respondents
ROBERT OTTO AMANN & VANDA RUSSELL GOULD

Prosecutors/Applicants

Office of the Registry
Sydney No S 140 of 1998

B e t w e e n –

JOHN SPINKS, TRAVERS DUNCAN, ALLAN WELLS, GEOFFREY WHITE, WHITE CONSTRUCTIONS PTY LIMITED, WHITE INDUSTRIES AUSTRALIA LIMITED, WHITE INDUSTRIES PTY LIMITED, WHITE CONSTRUCTIONS PTY LIMITED, PDC CONSTRUCTIONS PTY LIMITED, PDC PLANT HIRE PTY LIMITED, WIL CIVIL AND MINING ENGINEERING PTY LIMITED, WHITE CONSTRUCTIONS PTY LIMITED, EXXON COAL AUSTRALIA LIMITED
Applicant
MAXWELL WILLIAM PRENTICE
Respondent

GLEESON CJ
GAUDRON J
McHUGH J
GUMMOW J
KIRBY J
HAYNE J

CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 1 DECEMBER 1998, AT 10.03 AM

MR D.F. JACKSON, QC: If the Court pleases, I appear with my learned friend, MR N. PERRAM, for the prosecutors in No S74 of 1998 (instructed by Mallesons Stephen Jaques) and for the prosecutor in No S107 of 1998. (instructed by Moray & Agnew)

MR S.D. RARES, SC: May it please the Court, I appear with my learned friend, MR N. PERRAM, for the prosecutors in No S118 of 1998. (instructed by Henry Davis York)

MR F.M. DOUGLAS, QC: If the Court pleases, I appear with my learned friends, MR R.W. WHITE SC and MR T.D. CASTLE, for the applicants in No S140 of 1998. (instructed by Mallesons Stephen Jaques)

MR G.A. PALMER, QC: May it please the Court, I appear with my learned friends, MR P.J. COOK and MR B. VUKADINOVIC, for the second respondent in Nos S74 of 1998 and S107 of 1998. (instructed by Vaughan Barnes)

MR A. ROBERTSON, SC: If the Court pleases, I appear with my learned friend, MR M.A. JONES, for Martin Russell Brown and Amann Aviation Pty Limited (In Liquidation), the first and second-named fourth respondents in No S118 of 1998. (instructed by Nash O’Neill Tomko)

MR D.E. GRIEVE, QC: If the Court pleases, I appear with my learned friend, MR S.D. EPSTEIN, for the respondent in No S140 of 1998. (instructed by Deacons Graham & James.

MR D.M.J. BENNETT, QC, Solicitor-General for the Commonwealth: May it please the Court, I appear with my learned friends, MR H.C. BURMESTER, QC, MR S.J. GAGELER and MS M.A. PERRY, intervening on behalf of the Attorney‑General for the Commonwealth. (instructed by the Australian Government Solicitor)

MR T.I. PAULING, QC, Solicitor-General for the Northern Territory: May it please the Court, I appear with my learned friend, MS R.J. WEBB, intervening on behalf of the Attorney-General for the Northern Territory, (instructed by the Solicitor for the Northern Territory), and I appear with MR D.R. JARVIS, intervening on behalf of the Australian Capital Territory. (instructed by the ACT Government Solicitor)

MR P.A. KEANE, QC, Solicitor-General for the State of Queensland: May it please the Court, I appear with my learned friends, MR G.R. COOPER and MR R.W. CAMPBELL, intervening on behalf of the Attorney-General for the State of Queensland in matters Nos S74, S107 and S118 of 1998. (instructed by the Crown Solicitor for Queensland)

MR D. GRAHAM, QC, Solicitor-General for the State of Victoria: May it please the Court, I appear with my learned friend, MR C.M. CALEO, intervening on behalf of the Attorney-General for the State of Victoria. (instructed by the Victorian Government Solicitor)

MR B.M. SELWAY, QC, Solicitor-General for the State of South Australia: May it please the Court, I appear with my learned friend, MS L.K. BYERS, intervening on behalf of the Attorneys‑General for the States of South Australia and Tasmania. (instructed by the Crown Solicitor for South Australia and the Crown Solicitor for Tasmania)

MR M.G. SEXTON, SC, Solicitor-General for the State of New South Wales: May it please the Court, I appear, intervening on behalf of the Attorney‑General for the State of New South Wales. (instructed by the Crown Solicitor for New South Wales)

MR R.E. COCK, QC: May it please the Court, I appear with my learned friend, MR R.M. MITCHELL, intervening on behalf of the Attorney‑General for the State of Western Australia. (instructed by Crown Solicitor for the State of Western Australia)

GLEESON CJ: In matters S74 of 1998 and S107 of 1998 the Court has been informed that the first respondents do not wish to be represented at the hearing of the application and will submit to any order of the Court save as to costs. In matter S118 of 1998 the Court has been informed that the first, second and third respondents do not wish to be represented at the hearing of the application and will submit to any order of the Court save as to costs. Yes, Mr Jackson.

MR JACKSON: Your Honours, because of the timing, it has been necessary to divide up the time available, I hope to be back in my seat by 12.15, if not before. May I move immediately to the argument in this case. There are three issues in the proceedings, of course. They are: should the Court revisit, to put it neutrally, Gould v Brown (1998) 151 ALR 395; secondly, are the relevant provisions of the Cross-vesting Acts valid, those provisions being section 9(2) of the Commonwealth Act and section 4(1) of the New South Wales Act; and thirdly, does the Federal Court in any event have jurisdiction in this matter as part of its accrued jurisdiction or otherwise. May I proceed to deal with those issues in that order.

Your Honours, in relation to the first of them, reconsidering Gould v Brown, Gould v Brown was a decision of a Court of six Justices; three were in favour of the validity of the cross-vesting laws there in question, three were not, and, your Honours, it being an appeal from the Federal Court, section 23(2)(a) of the Judiciary Act required that the decision below be affirmed. Your Honours, the Court in the past has adopted a particular approach to the reconsideration of decisions so arrived at. They are binding, of course, on courts below this Court, in relation to the actual decision, but the position in relation to the Court itself is different, and the approach to be taken by the Court to the binding effect on it was dealt with in FederalCommissioner of Taxation v St Helen’s Farm (ACT) Pty Ltd (1981) 146 CLR 336.

KIRBY J: Did it really need the Judiciary Act to affirm? I mean, there was no majority in the Court to set aside the decision of the Federal Court and therefore, there being no majority to remove that order, that order remained.

MR JACKSON: Well, your Honour, that is a view that I think was adverted to by Justice Murphy in some of the cases and, your Honours, it is a ‑ ‑ ‑

KIRBY J: It may have some relevance to the principle of law that is thereby established.

MR JACKSON: Well, your Honour, one is left with a situation where I suppose there are two possibilities. One possibility is that the decision of the Federal Court is the decision that remains, it not having been set aside by something that commanded a true majority so that one would look at the decision as a decision of a court, in effect, at a level below this Court.

KIRBY J: You cannot wish away the decision of this Court.

MR JACKSON: No.

KIRBY J: There is a decision of this Court which, in legal principle, affirms the principle of law established by the court below.

MR JACKSON: Well, your Honour, it affirms – your Honour, I would accept that. However, it is a decision which is arrived at in the first place without there having been a decision of four members of the Court ‑ ‑ ‑

GLEESON CJ: We do not need to hear you develop this in-chief. If it is necessary to come back to it in reply then perhaps you can deal with the matter in reply, Mr Jackson.

MR JACKSON: Yes. Well, may I invite the Court to note one matter in relation to it before moving on and that is I was going to refer the Court to the St Helen’s Farm Case. Although the submissions of the Commonwealth touched somewhat lightly upon the correctness of that case there does not appear to be a specific application by anyone to reconsider it.

Your Honours, could I move then to the second issue and that is the conferral of State jurisdiction. Your Honours, the legislation, of course, involves two enactments, namely the Jurisdiction of Courts (Cross-vesting) Act of the Commonwealth, on the one hand, and of New South Wales on the other. The relevant Commonwealth provision, and I take your Honours to it, is section 9(2) of the Jurisdiction of Courts (Cross-vesting) Act and your Honours will see that it provides, relevantly, that the Federal Court may, in paragraph (a):

exercise jurisdiction (whether original or appellate) conferred on that court by a provision of this Act or of a law of a State relating to cross-vesting of jurisdiction –

If I could pause at that point, I will come back to the provision a little later to make some submissions about its effect. But the provision to which it refers relevantly is section 4(1) of the State Act, and your Honours will find, in relation to that, that it provides that:

The Federal Court has and may exercise original and appellate jurisdiction with respect to State matters.

That is a term, your Honours, defined in section 3(1) and your Honours will see that it means a matter:

(a) in which the Supreme Court has jurisdiction otherwise than by reason of a law of the Commonwealth or of another State; or

a matter:

(b) removed to the Supreme Court under section 8.

Now, your Honours, if I could just pause to say that because of the wide ambit of the investment of federal jurisdiction in State courts by section 39(2) of the Judiciary Act, it is clear that matters which fall within the concept of State matters, as indeed the definition makes apparent, have no element which would bring them within section 75 or section 76 of the Constitution.

Your Honours, if I could invite your Honours to go back to the State Act, and in particular to section 4(1), what your Honours will see is that what it purports to do is to confer and to authorise the exercise of jurisdiction by the Federal Court, that is to authorise that court to hear and determine, to adjudicate upon State matters, because, of course, that is the essence of jurisdiction. And, your Honours, when one goes then to section 9(2) of the federal Act, your Honours will see that it uses the expression that the Federal Court may “exercise jurisdiction”.

Now, your Honours, in Gould v Brown (1998) 151 ALR at page 482, in paragraph 270, your Honour Justice Kirby said that section 56(2) did not purport to confer jurisdiction, it merely permitted the exercise of State jurisdiction. And, your Honours, that is, as I said I think, at paragraph 270, page 482.

Now, your Honours, we would, if I may say so with respect, seek to put that matter in issue. What we seek to say, your Honours, is that it is not correct to say that the terms of section 9(2) do not purport to confer jurisdiction but merely permit the exercise of the State jurisdiction. Now, your Honours, section 9(2), in our submission, is the provision which confers on the Federal Court the authority to exercise the jurisdiction which is in question. It is a provision which determines, or defines if one likes, to use a constitutional word, a part of the jurisdiction of the Federal Court. If I can just take your Honours to a passage, your Honours will see that a provision which – I am sorry, I was going to say, if I can give your Honours a reference which, unfortunately, it seems not, but in Fencott v Muller (1983) 152 CLR 570 at page 606, your Honours will see at the bottom of 506 the adoption by four members of the Court of what had been said by Justice Windeyer as a description of conferring a jurisdiction.

Now, your Honours, what we would seek to say is, how could the Federal Court, otherwise than with the authority of the Commonwealth Parliament - because, of course, the Federal Court is purely a creature of Commonwealth statute - exercise jurisdiction other than that conferred upon it by the Commonwealth? Now, your Honours, if one goes, for example, to the Federal Court Act, one sees in section 19, for example, in section 19(1) that:

The Court has such original jurisdiction as is vested in it by laws made by the Parliament.

Your Honours, those laws, of course, are principally, other particular statutes, the large conferral of jurisdiction by section 39B of the Judiciary Act and also section 9(2) of the Cross-vesting Act if it be valid. But, your Honours, if the jurisdiction, as we would submit, is one that is conferred by a Commonwealth statute, that takes one immediately to the fundamental question which arises in relation to legislation of the central polity, namely, what is the source of the power? As Justice Dixon said in Hickman’s Case (1945) 70 CLR 598 at page 616, in the first new paragraph on the page:

It is, of course, quite impossible for the Parliament to give power to any judicial or other authority which goes beyond the subject matter of the legislative power conferred by the Constitution.

Your Honours, if I could pause for just a moment to go back to something I was saying before in relation to Fencott v Muller 152 CLR 606, what your Honours will see – and the point I wish to make about the passage quoted from Justice Windeyer in Felton v Mulligan at the bottom of page 606 – was that:

“The existence of federal jurisdiction depends upon the grant of an authority to adjudicate rather than upon the law to be applied or the subject of adjudication.”

If one treats that as stating the appropriate test, what one sees, in our submission, when one goes to section 9(2) of the Commonwealth Act is that what it is doing is granting to the Federal Court authority to exercise jurisdiction. It is something which falls directly within those observations adopted by the court in that case. That, in our submission, amounts to a purported conferral of jurisdiction. The expression “may exercise” is the provision pursuant to which the Federal Court, a federal emanation, is to exercise such power as it has.

Now, your Honours, I was seeking to say then, if one looks to see what is the source of the power, as one must in the case of a Parliament of limited powers, that is, in our submission, where the difficulties start to arise in relation to the terms of section 9(2). Your Honours, the difficulties arise first in this way, because it is clear that the Federal Court is a Federal Court in terms of section 71 of the Constitution. That is the source, the only source, of power to create the court.

McHUGH J: What do you say is the proposition, which I think, from recollection, was fundamental to the judgment of Chief Justice Brennan and Justice Toohey, that simply by creating a Federal Court the Parliament of the Commonwealth obtained the incidental power to authorise that court to receive jurisdiction from a source other than the Parliament of the Commonwealth?

MR JACKSON: Well, your Honour, we would submit that that is not correct. What we would seek to say about it is that, if one is looking – and I will come in a moment to the cases which we would submit support the propositions we would put – to the establishment of the courts, one sees in Chapter III a statement of two things: first of all, the power to create courts; secondly, the identification of the matters which can be the subject of jurisdiction by them. Now maybe it is right to say that the statement of the particular things is to be treated as, in one sense, expressio unius – I will come to that in a moment – but, your Honours, that is what we would seek to say is the position. The power is to create the court. The court is not there as something which can have given to it whatever the Parliament might choose. The Constitution states specifically what may be done. Your Honours, it may be, if I could just say in passing, that in relation to some aspects of courts, that the exercise of matters that otherwise would fall within federal jurisdiction would mean that particular classes of jurisdiction can be given to the court.

Could I give your Honours one example – that is, in relation to Nauru, your Honour; the tail that wags the dog. Now, your Honours, in relation to Nauru, one sees, of course, that it is, and I believe, an island in the Pacific. One can see in terms of section 51(xxx) that a law dealing with the position of Nauru and allowing jurisdiction to be exercised by Australian courts in relation to it, may well be something that falls within section 76(2) – a matter arising under a law made by the Parliament. It could be section 51(xxix) as well, but, your Honours, in relation to that, one would not be dealing with a situation where you had a court and then, there is given to the court something other than is provided for by the terms of Chapter III.

KIRBY J: Do you accept the constitutional validity of the conferral of jurisdiction in respect of Nauru?

MR JACKSON: Without dealing with the particular conferral, what I do accept is the proposition that jurisdiction may be conferred in terms of the jurisdiction being exercised being an original jurisdiction, not an appellate court.

McHUGH J: Well, that is rather difficult to reconcile with section 76 unless you treat it as an exercise of original jurisdiction.

MR JACKSON: That is what I am saying, your Honour, yes. I would not suggest for a moment it would be appellate jurisdiction, but appellate jurisdiction in the section 73 sense.

KIRBY J: It appears to be an appeal.

MR JACKSON: Well, your Honour, there may be difficulty with particular legislation. What I am seeking to say in relation to it is simply that there may well be provision to deal with it under Chapter III but it would not be by way of appellate jurisdiction under 73; it would be by way of original jurisdiction under 76(2).

McHUGH J: You mean it would be an old Quarter Sessions-type appeal; a hearing de novo?

MR JACKSON: That is really what one would expect to be the case if you had, for example ‑ ‑ ‑

KIRBY J: But that is still an appeal.

MR JACKSON: I am sorry, your Honour. What I am seeking to say though is that it is not the type of appeal that Mickelberg refers to, for example. It is a section 73-type appeal where there could not be fresh evidence and where the matter was dealt with on the law as it was at the time of the hearing before. There is no difficulty, however, one would think, in relation to the conferral of a jurisdiction to deal with something one might call an appeal but is in fact original jurisdiction arising under section 76(2). It frequently happens of course in relation to matters described as appellate in, say, the Federal Court where in fact the Federal Court is exercising original jurisdiction but the appeal is described as an appeal from some, for example, administrative body.

KIRBY J: So you do not contest the power of the federal Parliament to confer that jurisdiction in respect of “appeals” from Nauru?

MR JACKSON: I do not contest the existence of the power to do it, your Honour. The particular legislation I would not seek to express a view on, but could I also say that one could also deal of course with it in a sense as being perhaps a non-federal matter in the same way as the Territories have been dealt with in relation to the relationship of 122 and Chapter III.

KIRBY J: But Nauru was never a Territory.

MR JACKSON: No.

KIRBY J: So it cannot come up then.

McHUGH J: The power arises under 51(xxx), does it not, the relationship of the Commonwealth with the islands of the Pacific?

MR JACKSON: Yes, so then that brings ‑ ‑ ‑

McHUGH J: So that is the head of power under ‑ ‑ ‑

MR JACKSON: Yes, 76(2).

McHUGH J: 76(2).

MR JACKSON: If I could come back to the mainland, as it were, what I was seeking to say was this – perhaps if I can just go back one sentence, as it were. What we would say is that the Federal Court is a Federal Court in terms of section 71. That is the only source of power to create it. One then goes to see what jurisdiction Parliament is empowered to confer on it. If one looks to see in the Constitution what provisions of the Constitution confer power on the federal Parliament to legislate for jurisdiction on the Federal Court, one goes to section 77 no less, no more. In our submission, the decisions of the Court have taken that view very strongly in the past. Your Honours, I do not propose to go of course through all the decisions. May I give your Honours references to what we would submit are the important decisions in that regard.

One sees first In Re Judiciary and Navigation Acts (1921) 29 CLR 257 and may I take your Honours to page 264 and 265. At page 264, at about point 7 on the page immediately after the reference to the three classes of power and the reference to New South Wales v The Commonwealth, their Honours say:

In each case the Constitution first grants the power and then delimits the scope of its operation –

Your Honours will see, then, a reference to section 71 and a little further down the page to section 73 and 74 and then to section 75 and 76 at the bottom of page 264 and at the top of page 265. Now, your Honours will see, then, if I can go to about point 2 on page 265 their Honours say, after referring to defining the extent to which the jurisdiction of any Federal Court should be exclusive:

This express statement of the matters in respect of which and the Courts by which the judicial power of the Commonwealth may be exercised is, we think, clearly intended as a delimitation of the whole of the original jurisdiction which may be exercised under the judicial power of the Commonwealth, and as a necessary exclusion of any other exercise of original jurisdiction.

Your Honours, if I could pause there to say your Honours will see that what is referred to is as it being:

a delimitation of the whole of the original jurisdiction which may be exercised under the judicial power of the Commonwealth –

and then the contrast is drawn as being:

and as a necessary exclusion of any other exercise of original jurisdiction.

Now, your Honours will see that that question, whether any other jurisdiction could be exercised by a Federal Court, was the very issue on which Justice Higgins dissented. Your Honours will see that in ‑ ‑ ‑

GLEESON CJ: Does the decision in this case necessarily deny the proposition that he put at the bottom of 271?

MR JACKSON: Well, your Honour, in our submission it does because the issue was being put, if I can put it this way, or the argument was being put in this way, was there power to do more than was provided for, in effect, by sections 75, 76 and 77 and, your Honour, that that is so does appear, in our submission, from the two passages to which I wish to refer in Justice Higgins’ reasons. The first one is a little further on on page 272. It is about point 3 where your Honours will see that what he said was:

The point is that the Constitution does not expressly forbid the vesting of other powers in this Court, and that there is no necessary implication to that effect.

And when he came to summarise his reasons your Honours will see that at page 276 and it is in the passage, the second new paragraph on page 276 where what his Honour said was that:

To sum up :- Part XII. of the Judiciary Act purports to enable the High Court to exercise a judicial function, in aid of sec. 71 of the Constitution. This function is either within “the judicial power of the Commonwealth” referred to in sec. 71 of the Constitution, or it is not. In my opinion, it is within that judicial power; for it is the function of deciding a “matter arising under the Constitution, or involving its interpretation,” within sec. 76. But even if it is not within sec. 76, there is nothing in the Constitution to prohibit Parliament from giving other functions to the High Court than the exercise of the “judicial power” referred to in Chapter III.: and we are not justified in implying such a prohibition.

Your Honours will see that matter appears to have been directly in issue in the case and, your Honours, in our submission, the majority rejected the view that Justice Higgins had expressed in the passage to which I have just referred. Now, your Honours that ‑ ‑ ‑

KIRBY J: It could, of course, be different constitutional questions relating to the conferral of power on this Court, given its constitutional function, if we are looking at the negative implications of Chapter III, and it does not necessarily follow that the same rule applies for the Court as for other Federal Courts.

MR JACKSON: Well, the differences, if one leaves aside appellate jurisdiction, would really seem to be - I was going to say two, but perhaps principally two. One is that the jurisdiction under section 75 cannot be taken away from the court, that is a difference. The other is that under section 77(i) the power there to define jurisdiction, I think, does not exist in relation to this Court.

KIRBY J: Yes, but I am referring to the function of the Court under the Constitution ‑ ‑ ‑

MR JACKSON: Oh, yes.

KIRBY J: ‑ ‑ ‑which is a unique and special function which is different from that of all other Federal Courts. If we are looking for the negative implications from Chapter III, then it is different in the case of this Court, or at least arguably so than for other Federal Courts.

MR JACKSON: Well, your Honour, I do not in any way wish to diminish the ambit of operation of the Court, but one does have to bear – or the functsion.

GUMMOW J: One has to bear in mind, though, that 76(i) is not in section 75.

MR JACKSON: Your Honour, that is so, and what emerges from that, of course, is that a very possible view is that except to the extent to which a constitutional issue would arise in a matter that was a section 75 matter or would arise on appeal, the Court would not otherwise have the constitutional jurisdiction. Now, your Honours, very frequently, of course, one would expect the Court’s original jurisdiction to be attracted in constitutional matters by provisions such as section 75(iii) and (iv) and the issue would also frequently arise on appeals to the Court pursuant to section 73. But, your Honours, the underlying assumption that the Court’s function is to deal with the Constitution derives from those provisions, together with the possibility in 76(i) and, of course, the operation covering clause 5.

So, your Honour, undoubtedly this Court stands in a different position, but at the same time the observations in Re Judiciary and Navigation Acts were not made in any limited fashion, your Honours. Now, your Honours, what we would seek to say about it is that the ‑ ‑ ‑

KIRBY J: What Federal Court existed at that time? Just the Court of Arbitration, that was the only one, was it not?

MR JACKSON: Yes, I do not think the ‑ ‑ ‑

KIRBY J: We are talking of a very different time.

MR JACKSON: Of course, your Honour, but if I could just say – and I will come to deal with this in a moment – the one thing that one might have thought was in the minds of (a) those who were involved in the framing of the Constitution, and the justices of the court, was the great likelihood evidenced by Chapter III of the Constitution that there would be Federal Courts, and not just this Court, because the terms of section 71 and 77 refer specifically to the – and, of course, the American model was in mind.

Now, your Honours, what I was going to say was that we would submit the difference of view in Re Judiciary and Navigation Acts was a decision at an early point in the history of the Court, taking the view that Chapter III was relevantly definitive. Your Honours, a similar view came about in the Boilermakers’ Case, first of all in this Court, then in the Privy Council. The Boilermakers’ Case (1956) 94 CLR 254 and, your Honours, in the reason at page 268 and in the reasons of the four Justices, about point 7 on the page, your Honours will see the reference to the “autochthonous expedient of conferring”, after reference to the United States position:

On the other hand, the autochthonous expedient of conferring federal jurisdiction on State courts required a –

and, your Honours, can I just pause to say, the word “expedient” does contain a recognition that it was something that was expedient, perhaps, in two senses. Obviously, desirable because of the state of the courts at the time of Federation, but at the same time, a recognition that Federal Courts would, your Honours, one might think, inevitably, come into being.

KIRBY J: It was expedient because there were no Federal Courts save for this Court.

MR JACKSON: Well, your Honour, that is what I mean. The colonial courts were there waiting to become State courts ‑ ‑ ‑

KIRBY J: The Federal Courts were still in imagination, not in actuality.

MR JACKSON: Well, perhaps, in imagination, your Honours, soon to become in gremino, soon to become in place, but, in due course, they would come. Your Honours, could I just say that what was said is that there was a requirement for a specific legislative power which was 77(iii). Then, their Honours go on to say:

What constitutes judicial power is not stated. But the subject matter of its exercise is defined with some particularity. Judicial power is divided between appellate and original jurisdiction. Section 73 delimits the appellate power by reference to the tribunals from whose judgments, decrees, orders and sentences an appeal is to lie. Sections 75 and 76 –

your Honours, it is then referred to as confining -

the original jurisdiction which may be exercised in virtue of the judicial power to certain matters chosen in virtue of their relation to the Constitution –

et cetera. Your Honours will then see reference to section 77 and then, your Honours, I will not read out the passage but it goes through to halfway down page 269 and what your Honours will see then is in the paragraph commencing “Had there been no Chap. III”, there is a recognition in the first sentence of the fact that some of the legislative powers given under section 51 would have enabled the establishment of courts with jurisdictions appropriate to the subject matter of the power. Reference is made to “bankruptcy” and “divorce and matrimonial causes”, and then their Honours say:

The legislature would then have been under no limitations as to the tribunals to be set up or the tenure of the judicial officers by whom they might be constituted. But the existence in the Constitution of Chap. III and the nature of the provisions it contains make it clear that no resort can be made to judicial power except under or in conformity with ss. 71-80.

Your Honours will then see that subject discussed through to the bottom of that page and the top of the next page and, in particular, in the fourth line on page 270 their Honours go on to say:

But, except for this, when an exercise of legislative powers is directed to the judicial power of the Commonwealth it must operate through or in conformity with Chap. III. For that reason it is beyond the competence of the parliament to invest with any part of the judicial power any body or person except a court created pursuant to s 71 and constituted in accordance with s 72 or a court brought into existence by a State.

Their Honours referred to a number of cases where their proposition had been affirmed, acted on and then said, about point 4 on the page:

Indeed to study Chapter III is to see at once that it is an exhaustive statement of the manner in which the judicial power of the Commonwealth is or may be vested. It is true that it is expressed in the affirmative but its very nature puts out of question the possibility that the legislature may be at liberty to turn away from Chapter III to any other source of power when it makes a law giving judicial power exercisable within the Federal Commonwealth of Australia.

And the proposition is adverted to through the remainder of that paragraph and, in particular, your Honours, the reference to the fact that there is:

a notable but very evident example -

of the circumstance:

that affirmative words…..may have also a negative force and forbid the doing of the thing otherwise was noted very early in the development of the principles of interpretation.

GUMMOW J: Well that was echoing what had been said in Marbury v Madison.

MR JACKSON: Yes, indeed. Your Honours, those observations, in our submission, are perfectly generally expressed; they are not directed to dealing only with the issue of conferral of non-judicial functions and, your Honours, we would refer particularly to the generality of expression that your Honours will see in, for example, the bottom of page 271, the last paragraph on the page, where there is a particular reference to the:

considerations exist which point very definitely to the conclusion that the Constitution does not allow the use of courts established by or under Chapter III for the discharge of functions which are not in themselves part of the judicial power –

that is clearly referring to Chapter III –

and are not auxiliary or incidental thereto.

and, your Honours, that goes through the remainder of page 272 to about point 6, and then, on page 274, your Honours, at the bottom of the page, the observations made with respect to the:

reference to the federal judicature, the true contrast in federal powers is not between judicial power lying within Chapter III and judicial power lying outside Chapter III. That is tenuous and unreal. It is between judicial power within Chapter III and other powers.

And, your Honours, that goes through to the remainder of that paragraph. And finally, your Honours, in relation to that case in this Court, at page 337, Justice Taylor, in the first new paragraph on the page, refers to Chapter III and then, your Honours, about halfway through that paragraph says:

There is no power to confer judicial power generally upon any new federal court, for jurisdiction may only be conferred with respect to any of the matters specified in sections 75 and 76. These latter sections mark the limits of judicial power which may be conferred upon any new federal court created by Parliament and also, it is said, the limits of legislative authority to confer powers of any kind upon a court.

Your Honours, similarly, in the Privy Council in 95 CLR 529 at page 538, at about point 2 on the page, their Lordships said:

In the same way section 71 and the succeeding sections while affirmatively prescribing in what courts the judicial power of the Commonwealth may be vested and the limits of their jurisdiction negatives the possibility of vesting such power in other courts or extending their jurisdiction beyond these limits. It is to Chapter III alone that the Parliament must have recourse if it wishes to legislate in regard to the judicial power.

Your Honours will see the remainder of that paragraph in which their Lordships dissent from the contention that:

inasmuch as there is no express prohibition of other legislation in this field, it is open to the Parliament to turn from Chap III to some other source of power.

Perhaps I could give two references without taking your Honours to them. One sees an observation to the same effect by Justice Gibbs in Philip Morris Inc v Adam P. Brown Male Fashions Pty Ltd (1981) 148 CLR 457 at page 491 in the passage commencing in the first new paragraph on the page.

Your Honours, could I then go to the observations of four members of the Court in Fencott v Muller 152 CLR 607, the bottom of that page and the top of page 608. At the bottom of page 607, the last paragraph is introductory but then your Honours will see in the first new paragraph on page 608:

Claims which are described by these or similar phrases cannot be determined by exercise of the judicial power referred to in s 71 of the Constitution, for that power can be exercised only to determine those matters in which federal jurisdiction is or can be conferred under Ch III of the Constitution.

What one sees from those cases is that in various ways the Court said that the statement of the jurisdiction which could be conferred on Federal Courts was limited by the terms of sections 75 and 76. The manner of expression does not, with respect, suggest that they are speaking only about federal jurisdiction. Necessarily they are speaking in a context of federal jurisdiction but the expressions are broader.

Your Honours, one sees various references to the expressio unius rule and so on in the decisions in the Court. What we would submit is that rules of that kind are perfectly appropriate tests to be applied in constitutional interpretation in appropriate circumstances. What I mean by that is that one can see that in fact in relation to the Constitution at a number of levels. Whether one calls it negative implications or by some other name, it is first of all by no means unusual to draw negative implications from the manner in which legislative power is conferred expressly.

Could I say first that one sees a notable example of that in section 51(xxxi), the acquisition on just terms provision. Other powers are read down to conform with the requirement for just terms even though those powers would by themselves authorise acquisition on other than just terms. Similarly, in relation to section 51(xiii), the exclusion of State banking, other powers cannot be used relevantly in relation to State banking. No doubt a similar result would apply in relation to the exclusion of State insurance in section 51(xiv).

If I could turn then to Chapter III, on any view of Chapter III there is some negative implication to be drawn from the presence of sections 75 and 76 and the opening words of section 77. The question, no doubt, is what is the ambit of the implication to be drawn.

Now, your Honours, I said that negative implications - one can call them manifestations of an expressio unius rule, if one chooses - can be seen at a number of levels, but, your Honours, the view accepted since Federation that the Commonwealth is a government with enumerated legislative powers, and not others, is such a manifestation and if one looks at the – it would be perfectly possible, on one view, to take the view that sections 51 and 52, for example, were provisions which stated specifically legislative powers of the Commonwealth but did not limit the legislative powers that the Commonwealth might have. Now, your Honours, one draws from sections 51 and 52 the negative implication that the Commonwealth’s powers, legislatively, are limited to those.

Now, your Honours, there is nothing heterodox in adopting the view, in our submission, that there are negative implications to be drawn from the specification of particular powers. In a constitution like the Australian Constitution it is, in our submission, really the norm. Could I go then, your Honours, specifically, to two of the provisions of Chapter III and in particular to section 77(ii) and 77(iii) and may I go first to section 77(ii). What your Honours will see is that it is a provision which allows the Parliament to make laws:

Defining the extent to which the jurisdiction of any federal court shall be exclusive of that which belongs to or is invested in the courts of the States –

Now, your Honours, if I could pause at that point to say this, speaking as a practical matter, it was, of course, the combination of, on the one hand, the establishment of the large Federal Courts, that is principally the Federal Court of Australia but also the Family Court, and on the other hand the action taken by the Parliament in making some of that court’s jurisdiction exclusive and, in particular, section 86 of the Trade Practices Act that gave rise to the difficulties, as it were, that led to the enactment of the cross‑vesting legislation. I use the term “difficulties” in a sense, in inverted commas because of differences of view as to the extent to which they might be practical difficulties. But, your Honours, to use those features as a justification, as it were, for the cross-vesting legislation is not, in our submission, correct, because the notable feature is to be found in section 77(ii) itself.

It recognises that some conferals of federal jurisdiction will be exclusive and that the State courts will have no jurisdiction in relation to those matters and, we would submit, with respect, it is a rather unusual justification for the cross-vesting legislation to say the conferral of exclusive jurisdiction on Federal Courts gives rise to, to use the much used phrase “arid jurisdictional disputes” so thus giving rise to a reason why one should search for a means to avoid that possibility when, your Honours, the possibility that there will be exclusive jurisdiction is specifically contemplated by and authorised by the Constitution.

But, your Honours, we would also submit that it is difficult to see, in a sense, the underlying, practical justification for the search for legislative power in relation to the cross-vesting legislation, your Honours, no doubt, at a time when it was a very new thing for there to be exclusive federal jurisdiction in an area that previously had not been the case, that is something that caused some perceived or thought of difficulties. But, your Honours, what one now has is a situation where it is clear that the Federal Courts have jurisdiction to deal with the whole of any matter between the parties before them. The Federal Courts now have the very wise jurisdiction that has been given by section 39(1)(a) of the Judiciary Act which has the effect, of course, that apart from – perhaps I could just take your Honours to it for a moment ‑ ‑ ‑

KIRBY J: Are you seriously arguing that cross-vesting is not now necessary?

MR JACKSON: Well, your Honour, I am saying it is not a sufficient justification - your Honour, perhaps I will put it differently – what I am seeking to say is this ‑ ‑ ‑

KIRBY J: If there is no power, there is no power, and questions of its utility are irrelevant, but if you are going to the utility, I would have thought that the cards are stacked very heavily in your opponent’s hands.

MR JACKSON: Well, your Honour, if one of the reasons why it is suggested that there is power is because there is need for there to be power, then we would submit that the basis for that is incorrect because the need does not exist. What you have ‑ ‑ ‑

KIRBY J: Not at all, not at all. What if proceedings are commenced simultaneously in different courts, which is not an uncommon thing, or that there are proceedings in two courts at the same time which can conveniently be heard together, which is not an uncommon thing?

MR JACKSON: Your Honour, what happens in the situation, really, is in a sense no different from that which occurs if proceedings are instituted in different States, in matters of State jurisdiction, or in different countries. One side can apply for a stay, and one court is likely to grant a stay. If one case comes on for hearing before the other one, in cases where the courts have co-ordinate jurisdiction, then the parties would be bound by the res judicata and any estoppels that are raised from it.

GAUDRON J: And section 109 might also operate in the case of a Federal Court.

MR JACKSON: In some, your Honour, indeed in some circumstances. And what you have now is – I was going to refer to section 39B(1A) – what your Honours will see is that by that provision, in particular by 39B(1A)(c), the Federal Court has original jurisdiction in any matter:

(c) arising under any laws made by the Parliament.

GUMMOW J: Including crime.

MR JACKSON: Indeed, your Honour, yes. So a very wide jurisdiction has been conferred on the Federal Court, together with the matters referred to in 39B(1)(aa), the result being that there is a very large range of matters that can be dealt with and which, in accordance with the decisions of the court in Philip Morris v Adam P. Brown on the one hand and Stack v Coastal Securities on the other, the Federal Court has jurisdiction to deal with each of the matters arising in those proceedings.

GLEESON CJ: But whether or not jurisdiction is wide or narrow, what causes jurisdictional disputes is jurisdictional limits. A scheme to overcome jurisdictional disputes is presumably a scheme to circumvent jurisdictional limits. Its permissibility might depend upon the constitutional purpose of the limits. Why are Federal Courts of limited jurisdiction?

MR JACKSON: Why are they of limited jurisdiction, well, your Honour, because in relation to the – well, your Honour, perhaps I could just say something about the limit. First of all, the Federal Courts are of limited jurisdiction but, of course, so too, in a sense, other courts of the States – that is referred to in Jackson v Sperling Industries, I think the name of it is, your Honours, a decision in the Court. I will give your Honours a reference later, if I may.

Your Honours, what one sees is a situation where the Federal Court is to deal with - and I could, perhaps, take your Honours back to what was said, I think, by the four Justices in the Boilermakers’ Case - matters that have some federal element. No doubt, they come from some historical analogies in relation to the United States, but if one goes through the list of matters that are in section 75 and 76, what you see is that they deal with, for example, matters in which the new polity is a party, matters between States and so on, in section 75(iv), and residents of different States.

McHUGH J: But the answer appears, if I remember it rightly, in the joint judgment in Boilermakers at page 268 where their Honours spoke about “the demarcation of powers of the judicature”, “the constitution of the courts” and “the maintenance of its distinct functions” were matters of “equal importance to the States and the Commonwealth”, and it was necessary to protect the jurisdiction of the State courts from encroachment by the Commonwealth. These were the words.

MR JACKSON: Well, your Honours, that is the passage which I was seeking to refer. Your Honours, could I say in relation to that, broadly speaking - and I accept that the manner of appointment of judges in Canada, I think, is or was an exception to this - the ability of a polity to establish its own courts, having such jurisdiction as may be apposite to them, is generally regarded as being one of the incidents of being a polity. I have excluded Canada, or made a qualification about it, because the provincial judges were, I think, are or were appointed by the central government. But, subject to that, the questions of jurisdiction are ones for the polity and if one looks at the types of things done by the new polity, in the case of the Commonwealth, what your Honours will see is that it was a government which was to have limited legislative power, so, one sees then in section 76(ii), it was to have officers, one sees section 75(v), and provisions of that kind, together with a number of provisions of section 75 and 76 which deal with the fact that there were to be States forming part of the Federation.

GAUDRON J: The impetus for the cross-vesting scheme was not limitations upon the jurisdiction of the Federal Court, it was limitations upon the jurisdiction of the State courts.

MR JACKSON: Yes, your Honours, brought about by the exclusivity of jurisdiction.

GUMMOW J: What was then exclusivity.

MR JACKSON: Yes, your Honour, and what I was seeking to say about that was that if ‑ ‑ ‑

GUMMOW J: Particularly section 52 of the Trade Practices Act.

MR JACKSON: Yes, and section 86, your Honour.

GUMMOW J: Yes, and section 86 which is no longer in that form.

MR JACKSON: Yes. Well, your Honour, section 86 was the particular provision that gave rise to the perceived difficulty. What we would seek to say is that if, to the extent to which - and I appreciate, your Honours, that this is a point that cannot be taken very far - one relies upon perceived difficulties, a particular time as being some historical justification for the enactment of it, they have gone, or largely gone. And what we would seek to say is that if one starts at the Constitution itself, what one does see is that it recognises in section 77(ii) that some federal jurisdiction may be exclusive and, your Honours, the Constitution providing that recognition, we would submit, one really should not be seeking to say there is a way of getting around that.

Could I move then to section 77(iii). What we would seek to say is that its presence is quite eloquent on the issue. The Commonwealth may require the States to exercise federal jurisdiction, but where is the corollary? If there were to be a system of co‑operative federalism, why is no provision made for the Federal Courts to exercise State jurisdiction? We would submit that the language of section 77 read with section 71 is, to use the word again, eloquent in its silence.

No doubt section 77(iii) was enacted or came into being with the knowledge that the then colonial courts would be the only courts at Federation and for some time thereafter, but equally sections 77 and 71 reflect the knowledge that there would be Federal Courts, and the United States experience demonstrated that. What we would submit is that if there were to be the reciprocity that was contemplated by the cross‑vesting legislation, one would expect it to have been stated. Could we also seek to say that section 77(iii) makes it clear that the jurisdiction which may be invested in State courts is limited to that which can be specified in sections 75 and 76.

McHUGH J: Historically there was a strong probably minority opinion against the creation of any Federal Courts including this Court. Sir Samuel Way, the Chief Justice of South Australia, said that this Court was as much needed as five wheels on a coach.

MR JACKSON: He was a minority view, your Honour. Perhaps I will say nothing more. Could I just say this, however, that on the one hand section 77(iii) makes it clear that the jurisdiction which can be invested in State courts is limited to that specified in sections 75 and 76, yet in reverse, as it were, and without a word in the Constitution to say that it can be done, there can be conferred on a Federal Court all State jurisdiction. That, we would submit, is something that is not supported by the terms of the Constitution.

GUMMOW J: Nor, I think, by the American experience in so far as that is relevant.

MR JACKSON: I am sorry, your Honour?

GUMMOW J: Nor, I think, by the United States experience before 1901. I do not think they had State legislatures investing Federal Courts with State jurisdiction in the United States. There was some doubt about the other way round, and hence 77(iii).

MR JACKSON: No, your Honour, I was going to refer to a passage in ‑ ‑ ‑

GUMMOW J: Well, there is some doubt about the other way around and, hence, 77(iii).

MR JACKSON: Your Honours, could I just refer to one passage in your Honour Justice Gummow’s reasons, in Gould v Brown 151 ALR at page 463, in paragraphs 208 and 209, in relation to section 77(iii), where your Honour said that:

In particular, section 77(iii) is the only express provision whereby the legislature of one component in the federation may conscript the courts of another for the exercise of its judicial power.

Your Honour then referred to the matters in sections 75 and 76 and said, and we would submit correctly:

This textual limitation upon the affirmative grant to the Parliament strengthens the negative implication which denies to all other legislatures competency to bestow jurisdiction upon the Federal Court.

And, your Honour, could I invite your Honours to read paragraph 209 as well.

Could I move then, your Honours, to another provision, which is relied on in support of the scheme, and that is section 107 of the Constitution. Your Honours will see, of course, that section 107 says that:

Every power of the Parliament of a Colony which has become or becomes a State, shall, unless it is by this Constitution exclusively vested in the Parliament of the Commonwealth or withdrawn from the Parliament of the State, continue as at the establishment of the Commonwealth –

Your Honours, one has to see section 107 in the context in which it appears. Your Honours, when Federation was to come, that is, pending the establishment of the Commonwealth, there were then in being, of course, the colonies. In respect of each colony there was a Constitution, there was a legislature and there were laws, and sections 106, 107 and 108 dealt with those three topics. Your Honours, section 106, your Honours will see it said:

The Constitution of each State of the Commonwealth shall, subject to this Constitution, continue –

and it picked up the definition of “State” that is used in covering clause 6, and that was, such of the colonies as became part of the Commonwealth. And, what section 106 said was that the Constitution of the colony continued:

subject to this Constitution.

Section 107 dealt with legislative power and it reflected, your Honours, the fact that some Commonwealth powers were to be exclusive and they are provided for, for example, by section 52 and section 90. It recognised also the fact that the colonies, on becoming States, had lost some other legislative powers, such as those in section 92, section 114, 115, 117, and, your Honours, when one came to section 108, it recognises that there was not to be anarchy at Federation; colonial laws were to remain in force until the new Parliament legislated.

But, returning to section 107 for a moment, your Honours, it was in fact probably unnecessary; it adds nothing to section 106, and the terms of section 51 and 52 of the Constitution made it manifest that some Commonwealth legislative powers were to be concurrent, some were to be exclusive and, your Honours, section 106 in that regard is no doubt declamatory and declaratory, but it really adds nothing, in our submission, to the effect of the other provisions in the Constitution. What I mean by that particularly, your Honours, is that if one is seeking to see section 107 as a source of power, what does it do? It simply says that if there was a:

power of the Parliament of a Colony which has become or becomes a State –

then, in effect, subject to the Constitution, that power continues, but it says no more than that, your Honours.

GAUDRON J: And it has to be read in the context of this case along with the notion that jurisdiction is not simply authority to adjudicate but, subject to abuse of process and such considerations, authority which must be exercised when invoked.

MR JACKSON: Well, indeed, your Honour.

GAUDRON J: And so that, for example, unless there is something which requires the Federal Court to exercise jurisdiction, section 107 no more gives the States power to confer jurisdiction on the Federal Court than it does on the courts of Indonesia.

MR JACKSON: Indeed, your Honour. Your Honours, could I just say, going back for a moment to section 9(2) of the Commonwealth Cross‑vesting Act, it seems perfectly apparent, with respect, that section 9(2) is not intended to speak of a discretionary jurisdiction.

GUMMOW J: Well, I was wondering how Ward v Williams would fit in with 9(2)? “May” means “must” I think, in that setting.

McHUGH J: “Must” yes.

MR JACKSON: I am sorry, your Honour?

GUMMOW J: Yes. “May” in 9(2) is to be read as “must” according to Ward v Williams, I would have thought.

MR JACKSON: Well, your Honour, it is very difficult to see how it could not be read as that.

GUMMOW J: Yes.

MR JAKCSON: Certainly, there are circumstances, no doubt, where a jurisdiction can be exercised by a decision that it should not be exercised in a particular case and one can see that in relation to, for example, this general area, the accrued jurisdiction where it was held in Stack that it was there and it did not have to be exercise, but that is atypical.

McHUGH J: Yes, in Gould v Brown I think I put it to the Federal Attorney that “may” there had to be read in the…..edition of Oxford in the sense that it was jurisdiction which had to be exercised.

MR JACKSON: Well, indeed, your Honour. That is the whole purpose of it, that the court whose jurisdiction is invoked, if I can put it that way, will exercise the jurisdiction, has got power to send the case off somewhere else, but with the term “may” being used in section 9(2) is not a provision which says the court has an option, it is saying the court may exercise jurisdiction and, in our submission, that is not just a question of permission, it is the authority to do it.

Your Honours, could I move then to the question of application of the Federal Court Act itself to cases that are cross-vested? Now, your Honours, the machinery of the Federal Court – and what I mean by that, your Honour – that is a bad expression. What I am seeking to say is that the powers of the Federal Court, the Rules of the Court and all the attributes of the Federal Court, to put it broadly speaking, and I will come to it more specifically in a moment, are the matters that must be used in the adjudication and in the enforcement of judgments of the Federal Court exercising a cross-vested jurisdiction. Now, your Honours, in the past, one of the tests for determining whether a matter arises under a federal law has been that it depends upon federal law for its enforcement.

That manner of expression of the test can be seen in a number of cases, but could I give your Honours one reference. That is to LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575 at page 581 in the joint judgment of six members of the Court. The passage to which I wish to refer is the first new paragraph on the page. What your Honours will see is a quotation from Ex parte Barrett and their Honours say:

The conclusion reached by Latham CJ in that case, and stated in a passage that has often been cited with approval, is “that a matter may properly be said to arise under a federal law if the right or duty in question in the matter owes its existence to federal law or depends upon federal law for its enforcement, whether or not the determination of the controversy involves the interpretation (or validity) of the law”.
The whole of the enforcement of the cross-vesting jurisdiction depends on federal law. Could I take your Honours for just a moment to our written submissions. They are headed Written Submissions of the Prosecutors in Both Matters, and particularly at page 15. What I wanted to take your Honours to was the submissions that we make in paragraphs 51 to 57. May I endeavour to put them relatively briefly. The first is, as we say in paragraph 51, that the order that will be made by the Federal Court in exercising cross-vested State jurisdiction would be an order of that court. The power to enforce it is to be found in section 53 of the Federal Court of Australia Act.

If I could take your Honours to paragraph 52, your Honours will see that one of the features of judicial power is the ability to enforce orders. Could I refer your Honours to the quotation from Brandy, a passage which we have set out there, but in particular on page 16, just after the reference to Federal Commissioner of Taxation v Munro, your Honours will see Justice Isaacs pointed out that the concept of judicial power includes enforcement: the capacity to give a decision enforceable by execution. A few lines further down, the last three lines, thus, Chief Justice Latham pointed out, where a tribunal is able to give a binding and authoritative decision and is able to take action so as to enforce that decision, “all the attributes of judicial power are plainly present”.

Your Honours, the judicial power being exercised in enforcing the order, in our submission, is inevitably the judicial power of the Commonwealth. It could be no other, your Honours, because what is being done is to utilise all the procedures of the federal Act and to utilise the powers given to officers pursuant to the federal Act to enforce decisions.

Now, your Honours, we refer, in paragraphs 53, 54 and 55 to, in effect, that submission, and what we seek to say in paragraph 56 is to identify a number of particular matters, but not exhaustively, that indicate the judicial power of the Commonwealth is necessarily involved. Your Honours, if the judicial power of the Commonwealth is necessarily involved, that takes one then to section 71 and we would submit if one is speaking about the judicial power of the Commonwealth, it is at that point that one comes into collision with the provisions of sections 75, 76 and 77 as delimiting the extent to which federal jurisdiction may be conferred.

Can I mention in passing, your Honours, without dwelling on them, that in paragraph 60 and following we set out a number of further contentions which I will not deal with at length. May I just say, your Honours, in relation to paragraph 62 that could we add in relation to Nauru what I was seeking to say earlier in answer to one of your Honours, namely, that the provision may be a law under section 51(xxix) or 51 (xxx). Could I mention also, particularly, your Honours, that reliance was placed by some of our opponents upon the decision of the United States Supreme Court in relation to the Metlakatla Case, that is Metlakatla Indian Community, Annette Island Reserve v Egan (1960) 363 US 555.

GUMMOW J: They do not appear to have read what I said at paragraph 221 of Gould v Brown. One tries not to get agitated about it but one does not write this for oneself.

KIRBY J: I think the Commonwealth seeks to distinguish what Justice Gummow said in its written submission. It may not be fair to say they have not read it.

MR JACKSON: Yes, your Honour, what I was going to say in relation to it was that it was, of course, dealing with the interregnum after Alaska became a State and before it could establish its own courts which, of course, is a very particular situation ‑ ‑ ‑

GUMMOW J: Well, in Australia it would be a section 121 situation.

MR JACKSON: Yes, your Honour, that was what I was going to seek to say, that it is one which, under our Constitution, would occasion no particular difficulty. The United States provision was Article 4 section 3 dealing with new States and Territories, but, necessarily, a new polity has to have courts; it cannot itself create those until it exists. That is why one sees in covering Clause 4 in the Australian Constitution the provision that the Parliaments of the colonies could make laws which were to come into effect as laws of the States once the Commonwealth was established. But, your Honours, necessarily involved in the establishment of a new State is the making of provision for a new judicial system, and it is hardly surprising that the view would be taken that the existing courts could continue to exercise a similar jurisdiction mutatis mutandis, of course.

Your Honours, otherwise how, to take the simplest example, could they complete part heard cases. We would submit in this country, section 121, if nothing else, would provide the answer, either by itself or together with section 51(xxxix); so too may section 122 have some contribution. Now, your Honours ‑ ‑ ‑

KIRBY J: Do you say section 121 includes a power to make laws by an inference from “impose such conditions and terms”?

MR JACKSON: Yes. To move on to the third aspect of which we wish to deal, I have not attempted to set out all the submissions that we would seek to make in support of the argument of invalidity of the laws. As we have said in our written submissions, we adopt, if I might do so, with respect, the judgments that supported that in Gould v Brown, and we would seek to rely on those.

What we have sought to do is to set out what we submit is, in a sense, the core difficulty and matters around it. When I say the core difficulty, what I am seeking to say is that if one looks at section 9(2) of the Commonwealth Act, it is a provision which does confer jurisdiction. The jurisdiction which it is conferring is one which is necessarily federal. That brings one to a situation where one has Chapter III applying, and that brings into play the terms of the limitations imposed by the opening words of section 77.

KIRBY J: So, fundamentally it is an expressio unius case?

MR JACKSON: And a very good rule that is, too, your Honour, with respect.

GUMMOW J: It is more than that, though, surely.

GAUDRON J: It is one thing to refer to it as an expressio unius, it is another thing to talk about it as a delimitation of powers in the federal Constitution. Whatever might be said about expressio unius as a general rule of statutory construction, there are different considerations in operation when dividing powers as between different polities.

MR JACKSON: If I can answer your Honour in, sort of, two levels. No doubt, it is possible to give a dog a bad name, as it were.

GAUDRON J: Yes.

MR JACKSON: But the second thing we would seek to say about it is that one sees in the various provisions of the Constitution in the statement of legislative powers of the Commonwealth a delimitation; the legislative powers of the Commonwealth are stated. If one is looking to see what is the provision that allows there to be a conferral of the jurisdiction of the present kind, one looks to see where is the power.

GUMMOW J: It is deeper than that, in a way. It goes back to your answer, perhaps, to the Chief Justice earlier this morning.

GAUDRON J: It comes out of Federation. It does not come out of a rule of statutory construction.

MR JACKSON: No, your Honour, one looks to see is there a power. That occurs in a context where an element of being a polity is the ability to create one’s own courts.

McHUGH J: I think I hinted – in fact, I expressly said in Gould v Brown that even if you did not have sections 75, 76 and 77, I would have difficulty in accepting that States could legislate to enlarge the jurisdiction of the Federal Courts. That was the view of Cooley in the United States to which Justice Gummow referred in his judgment. He stated the general principles that the States cannot enlarge the jurisdiction of the Federal Courts, or confer new authority or cases upon the Federal Court.

KIRBY J: That is dangerous territory for you, though, is it not, because our Federation is of a different character and was stamped as different from the beginning.

McHUGH J: I am not sure about that. Sir Owen Dixon said that they were fascinated by the plan of the Constitution. You have only got to compare Articles 1, 2 and 3 with Chapters I, II and III, to see that they almost had the US Constitution in front of them as they drafted it.

KIRBY J: No doubt about that, but they took a different direction.

MR JACKSON: Well, your Honour, could I say what one sees, really, in terms of different directions, I suppose, are really two broad things. One is in relation to appellate jurisdiction and that is where the stream from all the courts comes here, as it were, whether they be exercising federal jurisdiction or State ‑ ‑ ‑

KIRBY J: But is not only appellate. At least since Kable we understand that the State courts must be suitable vehicles for the reception of federal jurisdiction, and it is the wonderful and unique thing of our Constitution that it created this integrated judicature which the Americans never did.

MR JACKSON: Well, your Honour, it is not – “integrated” gives it a quality which it has to some extent, but does not. This Court, which is the one in which the integration really occurs, is a Federal Court. It is established by the Constitution but it is a Federal Court, as section 71 says. And, your Honours, one sees then the integration is integration by the exercise by the Commonwealth of the power to invest State courts, that is on the one hand, together with, on the other hand, the concept of matter in sections 75 and 76.

But, your Honours, those things all derive from the Commonwealth Constitution, and there is not really an integration of courts. What one sees is that, as one would expect, in terms of covering clause 5, the courts throughout the nation are obliged to apply the Constitution, but the courts, in our submission, do not have the integration to which your Honour was referring.

GUMMOW J: It is odd that your opponents from the States rely on section 107, in a way, because what they seek to do is to limit the federal structure by turning themselves into Territory courts, in the sense of it. That is why I am all puzzled by their reliance on section 107. They would seem to be more at home with 122.

MR JACKSON: Yes. Your Honours, I have dealt really with section 106, 107 and 108 already. They really perform three different functions, and section 107 does not really take one very far beyond what there was before, in our submission.

Your Honours, could I move on then to the third aspect of the case, and that is in relation to whether, in relation to our case, the Federal Court has jurisdiction. Your Honours, if I could put it shortly: the argument on behalf of the second respondent, Mr Wakim, contends that the proceedings are within the jurisdiction of the Federal Court essentially for three reasons. The first is that they arise under the Bankruptcy Act and thus fall within section 76(ii) of the Constitution, jurisdiction in bankruptcy having been conferred on the Federal Court. The second is that they fall within the accrued jurisdiction. The third is that they are within the ambit of the cross‑vesting provisions. May I deal with the first two of those ‑ ‑ ‑

KIRBY J: The first two do not arise if three is valid?

MR JACKSON: That is so, your Honour, yes. Now, your Honours, may I deal with the first one, that is that they arise under the Bankruptcy Act. Your Honours, the first thing one notices is that the proceedings are common law actions for professional negligence in giving advise concerning, amongst other things, the entitlements of a trustee in bankruptcy, but they are no more than that. The interpretation of the Bankruptcy Act, may, to a degree perhaps, be involved, but that Act is not the source of the right asserted, nor is it the basis of a defence to the claim. And, your Honours, it is well established, in our submission, that it is not sufficient for a matter to be a matter arising under a law, that the interpretation of the law may be involved. Your Honours will see that adverted to by a number of Justices in Felton v Mulligan (1971) 124 CLR 369. Your Honours, may I go first to page 374, Chief Justice Barwick, about a quarter of the way down the page after references to Nelungaloo and The Commonwealth v Bank of New South Wales. His Honour says:

It is of course not enough that a law made by the Parliament must be construed in the course of the decision of the case. There must be a matter arising under a law of the Parliament. the contrast between the language of section 76(i) and 76(ii) is relevant in this connexion.

And your Honours will recall, of course, that section 76(i) uses the language “in any matter arising under this Constitution or involving its interpretation”, whereas section 76(ii) says “arising under any laws made by the Parliament”.

His Honour went on to say:

The point at which interpretation of the federal statute, prima facie an apparently incidental consideration, may give rise to a matter arising under the statute is not readily expressed in universally valid terms. But the distinction between the two situations must be maintained.

At page 382, your Honours, Justice Menzies, in the paragraph commencing about point 6, referred to the difference between section 76(i) and 76(ii) and then said:

A matter may involve the interpretation of a law without arising under that law. Thus, for instance, if, upon a claim for damages for negligence at common law –

rather like this case –

it became necessary to interpret some statutory provision imposing some duty upon the defendant, the litigation would involve the interpretation of the statutory provision but would not arise under it.

And he goes on to develop that a little. Your Honours, could I refer also to Justice Owen at page 396. Your Honours will see the passage at the top of the page where he adopted what had been said by Chief Justice Latham in Ex parte Barrett, which is to the same effect, and then, your Honours, at the bottom of page 408 to the top of page 409, Justice Walsh, and page 416, about point 5 on the page, Justice Gibbs.

Now, your Honours, that approach was adopted by seven Justices in LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575 at page 581 and it is the first new paragraph on that page. I had referred to another part of it earlier:

It is true to say that a matter does not arise under a law made by the Parliament merely because the interpretation of the law is involved. On the other hand, a matter may arise under a law of the Parliament although the interpretation or validity of the law is not involved.

And finally, your Honours, in Carlton & United Breweries Ltd vCastlemaine Tooheys Ltd (1986) 161 CLR 543 at page 551 about point 6 on the page:

A matter does not arise under a law of the Parliament merely because the interpretation of the law is involved –

Now, your Honours, that is really at its best. That is what this case is, a case where the interpretation of the law is involved but it is simply cases in negligence.

Could I turn, then, your Honours, to the other bases relied on and that is accrued jurisdiction? Now, your Honours, one has to bear in mind this is a case where there are three separate proceedings. The accrued jurisdiction is said to accrue to proceedings in which the prosecutors are not parties. What we would submit is that there has to be something to which the accrued jurisdiction is to accrue and that is demonstrated by the fact that the accrued jurisdiction is part of a matter between particular parties. Now, your Honours, that concept that it is a case or controversy of that kind underlies, in our submission, the concept of “matters” as used in section 75 and section 76. Could I refer your Honours to what was said by Justice Mason, with Justice Stephen agreeing, in Philip Morris Inc v Adam P. Brown Male Fashions Pty Limited (1981)148 CLR 457 at page 514 where your Honours will see at about point 4 on the page:

In deciding whether to attribute either a broad or a narrow content to “matter”, we should take into account that the adoption of the broad meaning will lead to the speedier determination of –

your Honours will see the expression:

entire controversies between parties without undue duplication of proceedings.

And, your Honours, one sees, also, that similar usage in the later decision in Stack v Coast Securities (No 9) Pty Limited (1983) 154 CLR 261. Your Honours will see, if I could go first of all to page 290 in the joint reasons of Justices Mason, Brennan and Deane, about halfway down the page their Honours say:

We need to recollect that…..that a court does not begin to exercise federal jurisdiction until a “matter” within ss. 75 or 76 is raised in the proceedings and that the federal jurisdiction the exercised by the court is co-extensive with the content of that “matter”.

Their Honours discuss the earlier cases and then go on to say at page 291 in the last paragraph on the page:

The unanimous decision in Moorgate demonstrated that the content of “matter” in s. 76(ii) extends to non-federal aspects of the justiciable controversy between the parties when both aspects, federal and non-federal, rest upon a common substratum of facts.

And, your Honours, could I refer also to Fencott v Muller (1983) 152 CLR 570 and, your Honours, the passage commencing in the second paragraph on page 603 going through to the middle of page 605 really seems to discuss the matter on the assumption, if I can put it broadly speaking, that that is what is contemplated, what is the controversy between those parties.

Of course, if other parties are added, maybe larger controversies, maybe larger matters, but the whole concept of accrued jurisdiction depends upon there being a controversy, as it were, part of which does not lie within the scope of a matter arising under federal law. In resolving the controversy in relation to which the Official Trustee and Mr Wakim are parties, no issue arises in relation to which the prosecutors are parties. The concept that accrued jurisdiction would go beyond the boundaries of the controversy which attracted jurisdiction in the first place would mean that the concept of accrued jurisdiction would have extraordinary consequences, particularly in cases where the jurisdiction attracted was exclusive.

Your Honours, could we also seek to say that there is not, in our submission, any case in which this Court has given approval to the notion that accrued jurisdiction can spread from one case to another. We would also seek to submit there is no legal requirement for consistent findings of fact – this is a matter relied on by our learned friends. There is not any legal requirement, in our submission, for there to be consistent findings of fact. It is not uncommon for there to be different findings between different parties based on different evidence and common issues, without more, just do not give rise to accrued jurisdiction.

Could I say one further thing, your Honours, and it is this. Our learned friend’s submissions in paragraph 4 – that is the submissions on behalf of Mr Wakim – refer to the Federal Court’s jurisdiction in bankruptcy in very broad terms. Reliance is placed upon section 27(1), if I could just take your Honours to the Bankruptcy Act for a moment. Your Honours will see that section 27(1) says that:

The Federal Court has jurisdiction in bankruptcy, and that jurisdiction is exclusive of the jurisdiction of all courts other than the jurisdiction of the High Court under section 75 of the Constitution.

Our learned friend’s submissions in paragraph 4 say that:

The Bankruptcy Act…..confers on the Federal Court jurisdiction in bankruptcy, including –

and then there is a reference as well to section 30, in particular section 30(1)(a).

Could we just say, your Honours, that bankruptcy when used in this connection has a defined meaning. That is defined by section 5(1) and it means, as your Honours will see, in relation to jurisdiction of proceedings it means any jurisdiction of proceedings “under or by virtue of this Act”. Without spending more time in relation to it, I simply wanted to direct your Honours’ attention to the fact that the jurisdiction in relation to bankruptcy is not expressed in unlimited terms.

Your Honours, those are the submissions we wish to make orally.

GLEESON CJ: Thank you. Mr Rares.

MR RARES: If the Court pleases. Your Honours, in our matter we adopt Mr Jackson’s submissions in relation to cross‑vesting as it impacts upon the cross‑vesting scheme under the Corporations Law. The issues that we have is whether that scheme is valid and whether, if it is, the prosecutors are entitled to relief.

Can I say at once, your Honours, that Mr Gould really has, simply, a derivative claim here. If the other prosecutors do not succeed, he cannot do anything. He does, however, have a problem in the event that the other prosecutors proceed and it is held the Federal Court had no jurisdiction, because then he will have a judgment against him in the earlier proceedings which conflicts with that, and it is a judgment of this Court, and to the extent that that raises a problem that is remedial by the Court, then he seeks for a remedy. Otherwise there is nothing one can say about his position. There is obviously a previous judgment and that ‑ ‑ ‑

KIRBY J: You say he seeks a remedy. Is that in the orders he seeks?

MR RARES: He seeks prohibition.

KIRBY J: How will that affect the judgment?

MR RARES: It will quash the jurisdiction of the Federal Court.

KIRBY J: The judgment will remain?

MR RARES: The earlier judgment related to questions that were asked. The remedy of the prerogative ‑ ‑ ‑

KIRBY J: The judgment of the court, how do you get rid of that? You do not get rid of that by the order of prohibition.

MR RARES: No, your Honour, but what was in issue in the earlier case was that there were five questions that were asked. It was determined adversely to him in one of the questions that the Federal Court had jurisdiction to make the winding‑up order. If the winding‑up order is prohibited or quashed, then it will no longer affect him.

KIRBY J: So you would have to commence later in separate proceedings in this Court, would you, to have that judgment set aside? How do you get here, having exhausted earlier rights?

MR RARES: Perhaps I can leave that to the end of the day. If he does have that happy position, then that matter, if it needs to be, can be addressed. But, the relief here, in substance, it is obviously the same, but in form it is different.

Can I take your Honours briefly to the scheme of the corporations cross‑vesting provisions. I know four members of the Court are familiar with it.

GLEESON CJ: You can probably assume that we have all read Gould v Brown.

MR RARES: Yes. The key provision in the Commonwealth Act is section 56(2) which is in materially identical form to section 9(2) of the Cross‑vesting Act of the Commonwealth. In addition to what my learned friend, Mr Jackson ‑ ‑ ‑

KIRBY J: In terms of constitutional principle is there any point of distinction? If the negative implication is to be found in Chapter III for the State and federal scheme it must be found for the corporations scheme.

MR RARES: That is right. Just in support of the textual reading that my learned friend put forward, can I give your Honours a reference to another passage in the Boilermakers’Case in the Privy Council 95 CLR at page 543 at about point 7, their Lordships say that:

conferment of judicial power is limited by the express enactment of Chap. III aided by s. 51(xxxix): it is not to be regarded as unlimited except so far as it is expressly prohibited. It is not only functions “essentially” legislative or executive in character which cannot be conferred upon a court: only those judicial functions can be so conferred which fall within Chap.III and s. 51(xxxix).

And we submit that is consistent ‑ ‑ ‑

GUMMOW J: That is a rather weaker situation than this – I do not know if weak is the right word. Undoubtedly, the law there was a law with respect to conciliation and arbitration, so it is section 51 law.

MR RARES: Yes.

GUMMOW J: And you can then talk about negative implications. In that case, there was a footing for the Act in section 51.

MR RARES: Yes, you could identify, as your Honour is indicating, precisely a head of power with respect to which the Commonwealth had legislative authority to make a law.

GUMMOW J: The question is where does this section that says the Federal Court may exercise this authority, where does that federal section draw its power from? You do not answer that by talking about negative implications. You have to find some power somewhere in the Commonwealth. The question is, where is it?

MR RARES: Exactly, your Honour, and we say it just is not there and no manner of ‑ ‑ ‑

GAUDRON J: The only possible footing is 51(xxxix), is it not?

MR RARES: That has to be ancillary to the ‑ ‑ ‑

GAUDRON J: the execution of a power.

MR RARES: ‑ ‑ ‑the execution of a power, and the relevant power, we would submit, is to be found in section 71, which is the power to create a Federal Court exercising the judicial power of the Commonwealth. And on no reading, in our submission, does anyone suggest, ranged against us or, as we understood, the judgment of the then Chief Justice and Justice Toohey and Justice Kirby, anyone suggest that this is a law with respect to a head of power. It is simply said to be an authorisation, and when one then takes that which is authorised, it must be the exercise of this judicial power under section 71, because that is where the Federal Court gets that power.

And we rely for that purpose, as we pointed out in our written submissions, your Honours, on the approach that the court had taken to conferring jurisdiction on an identified court, we set out in paragraph 21 of our written submissions a passage from the joint judgment of the whole Court in the Electric Light and Power Supply Case 94 CLR 554, and the adoption of the well known statutory device of conferring on an existing court judicial power, one then used the known authority according to the rules of procedure by which that court was governed and subject to the incidence by which it is effected. And when you identify the Federal Court as the repository of this State jurisdiction, one gets to the point where, as Mr Jackson adverted, you have to identify, “What does it do, how does it enforce its audit, how does it carry out the hearing, how does it conduct itself?” and, like Mr Jackson, we have set out in our submissions, in paragraph 36 a series of provisions in the Federal Court Act which are vital to its operation and which can only be carried through by reasonable enactment of legislation pursuant to conferring the judicial power of the Commonwealth.

We also refer to the approach to the co-operative schemes which the whole Court adopted in the joint judgment in Re Cram; Ex parte New South Colliery Proprietors’ Association Ltd 163 CLR 117 which we have set out a passage from in paragraph 24 of our written submissions, and the relevant passage is ‑ ‑ ‑

GUMMOW J: Which paragraph of your submissions?

MR RARES: Paragraph 24. The relevant passage is where the whole Court says:

More importantly, once it is accepted that the powers derived from the Commonwealth and State Acts are not required to be exercised in isolation from each other, but may be exercised concurrently or in combination in the one matter, then the concept of separate Commonwealth and State tribunals exercising separate powers becomes untenable.

Your Honours will remember that that was a case where there were two separate Acts: the Commonwealth Act and a State Act, complementary establishing local and intermediate coal tribunals, and they each had ‑ ‑ ‑

GUMMOW J: But the result was, was it not, that 75(v) applied to the officers of this body?

MR RARES: Yes, and no one suggests here that judges of the Federal Court or its registrars, are not officers of the Commonwealth for purposes of section 75(v), when they exercise this supposedly wholly State jurisdiction and, therefore, that can be a mandamus to compel them to exercise in the event that you have an argument that there is some sort of discretion under section 56(2) or the cross-vesting, 9(2).

GAUDRON J: However, just to go to that passage you have read from Cram, I suppose there is an argument that, except to the extent that the Constitution specifically provides otherwise - and you say it does not - the judicial power of the Commonwealth is to be exercised in isolation, from the judicial power of the States and vice versa.

MR RARES: Yes, well, that is – I am sorry, your Honour, I did not mean to interrupt, but that was the point, that when one sees that this necessarily involves - and it does not matter how great the degree - the judicial power of the Commonwealth conferred pursuant to section 71 of the incidental power, the scheme must fail because it is not “a matter” within Chapter III. It just does not work because there is no matter and the courts – we rely on all the judgments that my learned friend, Mr Jackson, referred to.

There is also a passage which may assist in Mellifont which we have not put on our list – it is Mellifont v Attorney-General for the State of Queensland (1991) 173 CLR 289, where the majority discuss the principle of Chapter III jurisdiction at page 300. Their Honours, in the first full paragraph, refer to the position which the reference in section 73 to the Interstate Commission jurisdiction creates, and then their Honours say in the next paragraph:

That interpretation rests on the principle that, subject to appeals from the Commission –

that is the Interstate Commission –

the High Court cannot be entrusted with functions not ancillary or incidental to the exercise of the judicial power of the Commonwealth but foreign to that exercise.

KIRBY J: Well, the key is in those last words.

MR RARES: Yes, but it is not part of the judicial power of the Commonwealth and nobody suggests it is, to exercise the cross-vested jurisdiction either under the corporations scheme or the other scheme. The whole point is – the argument is that is wholly State jurisdiction and, therefore, it is foreign to the exercise of the judicial power of the Commonwealth, because it is not part of that power.

KIRBY J: That is the question that has to be determined.

Your Honours, the other matters to which we would refer then are in relation to what relief we might be entitled to. Mr Amann is in the position where he was the subject of examinations by the Liquidator. It was sought originally to prohibit those examinations. The examinations Justice Einfeld in the Federal Court refused a stay, and the examinations proceeded. He seeks still to have relief inter alia to have, as we have annexed to our submissions in a summation, the transcripts and the like delivered up. He is also the subject of attention by the Liquidator who is urging the Australian Securities Commission to take proceedings against him. That appears in the affidavit material that Mr Brown, the Liquidator, has put on, and can I give your Honours a reference to it, in volume 3 of the material behind tab 71, and it sought to have, in that material, at page 353 of the volume - and your Honours will see there is a latter there of 30 October 1995, which was written about two months after the proceedings in the Gould v Brown or the point was taken in Gould v Brown before the Federal Court. At the bottom of page 353 ‑ ‑ ‑

KIRBY J: Is this tab 71A, I am sorry.

MR RARES: At the bottom of that page at line 40 the Liquidator refers to the ASC having indicated it did not wish to take the matter further. At the top of the next page he reagitates the matter and recommends that action be taken under section 600(2) of the Corporations Law, which is a provision that deals with having people disqualified from being directors for a period of years in the event that they are associated with companies that go into liquidation.

HAYNE J: What is the significance you attach to these pieces of information flowing?

MR RARES: It is suggested that there is nothing that Mr Amann has to worry about or be concerned with and he has no standing for relief, and I just wish to direct the Court to those matters. Your Honours, we would, in any event, rely upon the decision of the Court in the Western Australian Football League Case in The Queen v Federal Court of Australia; Ex parte Western Australian National Football League 143 CLR at page 190. In the judgment of the Chief Justice Sir Garfield Barwick, at page 204, his Honour refers to the fact that:

A judgment given or an order made in a matter which is outside the limited jurisdiction of the tribunal giving or making it, from which the parties do not appeal, may become a precedent. The public interest is that such a decision or order should not be allowed to stand.

With references given to authority.

It is for this reason that a stranger may obtain prohibition.

And we say, in our submission, it would be an appropriate case in which the Court would grant prerogative or injunctive relief, pursuant to section 75(v) and the ‑ ‑ ‑

GUMMOW J: What page in Sir Garfield Barwick’s judgment?

MR RARES: It is page 204 at about between point 6 and point 7; I am sorry, your Honour.

GUMMOW J: Thank you.

MR RARES: As I indicated earlier, in the event that Mr Amann succeeds, it is difficult to see why Mr Gould would not would not be entitled to similar relief, given that we are dealing with a constitutional question where the Court is in effect saying that the earlier decision which held there to be jurisdiction now is wrong and he would then be subject to conflicting views so far as the Federal Court’s power over him is concerned. I should also mention, your Honours, that the winding-up order is one that continues. It is an order that appears on page 9 of the application book, that the company be wound up by this Court under the provision of the Corporations Law so that there is a series of continuing duties in the Corporations Law and Chapter 5 of the Corporations Law it sets out a series of duties liquidators have and makes the Liquidator, in this case, an officer of the court to carry out the liquidation on its behalf and delegates under, for example, section 4, Part 8 of the Corporations Law, powers of the court pursuant to regulations to the Liquidator and those matters are continuing, as is evident from Mr Brown’s affidavit that he filed or that was sworn last week. Unless there is anything I can assist the Court further with, they are our submissions.

GLEESON CJ: Thank you. Mr Douglas.

MR DOUGLAS: May it please the Court. There are three questions which arise in the application which we make. One is the matter arises in relation to section 51(1) of the Corporations Act 1989 which confers jurisdiction on the Federal Court of Australia with respect to civil matters arising under the Corporations Law of the Capital Territory. The judgment below proceeds on the basis that that is a law for the government of the Territory within section 122 of the Constitution and jurisdiction can be conferred upon the Federal Court pursuant to section 76(ii) of the Constitution. That reasoning emerges at pages 7, point 8, to 9, point 9, of the judgment which is to be found, essentially, at page 82 of the application book.

GUMMOW J: Are the issues here any different from those in the reserved decision of GPAO?

MR DOUGLAS: Your Honour, I have only read the transcript of that argument but it does seem to us that different questions may arise or that alternatively this question may not have to be determined in that case, but not having been involved in the argument of the matter or involved in deliberating upon the matter I really cannot offer another view other than that. What we would say is that the only judicial support for the view which the Full Federal Court has come to are to be found in a judgment of Justice Menzies in Spratt v Hermes and Falconer. We would like to take the Court, briefly, to two passages from the Boilermakers’ decision both in this Court and in the Privy Council at the commencement of our submissions.

The passage from the Boilermaker’ Case 94 CLR commences at the foot of page 289 and over on to the top of page 290, and if I could just read from the top of page 290 where reference is made to section 80:

A law of the Territory is not a law of the Commonwealth within that section. It was so held in R v Bernasconi. Nevertheless by an exercise of legislative power derived from s 122 an appeal may be given to this Court from a court of a Territory. That was decided in Porter…..This seems at first sight to be inconsistent with the decision in In re Judiciary and Navigations Acts which was that the jurisdiction of the High Court, as of other federal courts when created, arises wholly under Chap III of the Constitution. The reconciliation depends upon the view which the majority adopted that the exclusive or exhaustive character of the provisions of that chapter describing the judicature and its functions has reference only to the federal system of which the Territories do not form a part. Isaacs J expressed this view as follows: “I accordingly accept the later case…..as authoritatively determining that the ‘judicial power of the Commonwealth’, within the meaning of Chapter III., and both original and appellate, cannot be increased by Parliament. But the judicial power of the Commonwealth is, as defined by R v Bernasconi, that of the Commonwealth proper, which means the area included within States. Beyond that the decision in the later case does not apply. It follows that, if there be appropriate parliamentary enactment, this Court is competent to entertain appeals from the territorial Courts”. It would have been simple enough to follow the words of s 122 and of ss 71, 73 and 76(ii) and to hold that the courts and laws of a Territory were federal courts and laws made by the Parliament. As s 80 has been interpreted there is no difficulty in avoiding trial by jury ‑ ‑ ‑

GUMMOW J: But you were wound up in the Federal Court. You were not wound up in the ACT Supreme Court.

MR DOUGLAS: We were wound up in the Federal Court, yes, your Honour, exercising jurisdiction under section 51(i)

GUMMOW J: Yes.

MR DOUGLAS:

As s 80 has been interpreted there is no difficulty in avoiding trial by jury where it does apply and otherwise it would only be necessary to confer upon judges of courts of Territories the tenure required by s 72. But an entirely different interpretation has been adopted, one which brings its own difficulties –

Then, in the Privy Council, the report is 95 CLR and the relevant passage is at page 545 - perhaps commencing at the foot of page 544. It says:

The first matter relates to the decision of the High Court admitting an appeal from the Courts established by parliament in the Territories of the Commonwealth. By Chap VI of the Constitution which is headed “New States” it is provided (by s 121) that the Parliament may admit to the Commonwealth or establish New States and may upon such admission or establishment make or impose such terms and conditions as it thinks fit and (by s 122) that the Parliament may make laws for the government of any territory surrendered by any State to and accepted by the Commonwealth or of any territory placed by the Queen under the authority of and accepted by the Commonwealth. Under this power the Parliament has made legislative provision for an appeal from the Courts of the Territories to the High Court, and the validity of such law has been upheld. If this is right, so runs the argument, the provisions of Chap III cannot be an exhaustive statement of the jurisdiction of the High Court and reference is made to such cases as R v Bernasconi and Porter…..It appears to their Lordships that these decisions (the latter of which was not reached without difficulty and dissent) can be satisfactorily reconciled with the opinion they have formed in the present case by regarding Chap III as exhaustively describing the federal judicature and its functions in reference only to the federal system of which the Territories do not form part. There appears to be no reason why the Parliament having plenary power under s 122 should not invest the High Court or any other court with appellate jurisdiction from the courts of the Territories. The legislative power in respect of the Territories is a disparate ‑ ‑ ‑

GAUDRON J: That passage cannot be right, can it; unless you read “appellate” as something else, can it? It has not been seen to be correct in relation to section 73, has it?

MR DOUGLAS: Your Honour, so far as section 73 is concerned, one has Porter’s Case. Is that what your Honour is putting to me?

KIRBY J: I thought I read in the submissions for the Northern Territory that the laws of that Territory now provide for direct appeals from the Court of Appeal of the Northern Territory to this Court. Is that correct?

MR DOUGLAS: I think in the submissions of the Northern Territory they have pointed out how, at various periods of time ‑ ‑ ‑

KIRBY J: It used to and then it went through the Federal Court and now it is – I read directly from the Court of Appeal of the Northern Territory. Is that your understanding?

MR DOUGLAS: My recollection is of their submissions, your Honour, but they said originally they went to the South Australian Supreme Court.

KIRBY J: That is right, you are correct.

MR DOUGLAS: Then they went to this Court, then they went back to the Full Court of the Federal ‑ ‑ ‑

KIRBY J: Well, they went to the Federal Court; they did not go back.

MR DOUGLAS: Yes.

KIRBY J: They went to the Federal Court and then they apparently now come straight from the Court of Appeal. I am trying to think of cases where we have had appeals. I think it was an Admiralty case recently.

MR DOUGLAS: I do not think the question has arisen though, has it, your Honour, as to the validity of the conferral.

McHUGH J: Well, we had it in Romeo.

KIRBY J: Yes, that is right.

MR DOUGLAS: That has been determined adversely. The appellate jurisdiction of this Court from courts of the Territories has been recognised since Porter’s Case. We come here to argue the question of whether one can validly confer original jurisdiction – that is original Territory jurisdiction – on a Federal Court. Obviously if in fact this Court has exercised appellate jurisdiction from Territories’ courts, that is a matter which requires to be looked at. But as we would see it, contrary to what Sir Frank Kitto says in Spratt v Hermes, the original jurisdiction does stand in an entirely different situation. We will develop our submissions to show how that is so.

KIRBY J: It would seem odd that “appellate” is in and “original” is out in a Constitution that is supposed to work in an integrated fashion.

MR DOUGLAS: I think the basic point which we would seek to make in relation to original jurisdiction is that if in fact it is competent to invest original Territories jurisdiction in this Court or in any other Federal Court by section 76(ii) of the Constitution, a law of the Territory being a law of Parliament within the meaning of that provision, then there would be no constitutionally guaranteed right of appeal either from the Federal Court or from the exercise by a Justice of the High Court of that jurisdiction. That is a single Justice of the High Court.

GAUDRON J: But as the authorities presently stand, there is no constitutionally guaranteed right of appeal to this Court from Territory courts either.

MR DOUGLAS: Justice Gummow has pointed that out in Kruger’s Case, but that is something which is explained in this passage from Boilermakers and in subsequent decisions such as Sir Victor Windeyer’s decision in Falconer and also in Spratt v Hermes.

GUMMOW J: But if one read the phrase in section 73(ii), “any other or court exercising federal jurisdiction”, and if Sir Douglas Menzies was correct in Spratt v Hermes as to 76(ii), it would fit together, would it not?

MR DOUGLAS: It would, your Honour, and I think that is what this Court was saying in Boilermakers. So, in other words, as your Honour has indicated in your decision in Kruger, if in fact we were to trace back to Boilermakers and do it all over again, we would, in fact, be able to make this work by making Territories courts Federal Courts and by making Territories jurisdiction federal jurisdiction ‑ ‑ ‑

GUMMOW J: I do not know if they would be Federal Courts. That is not the phrase I used. It is courts exercising federal jurisdiction, not Federal Courts.

MR DOUGLAS: Yes, I accept that. But the jurisdiction which they would be exercising under section 122 would be federal jurisdiction and would be capable of being invested in those courts under section 76(ii). Now that is what the Privy Council ‑ ‑ ‑

GAUDRON J: Or under 71.

MR DOUGLAS: Well, whether 71 in this context has a separate operation from 76(ii) ‑ ‑ ‑

KIRBY J: Given all the trouble that was taken to create the Chapter III judicature, given that section 122 is part of the same Constitution in which all that trouble has been taken, it does seem an odd result that the judicature of the Territory is not to fall within Chapter III.

MR DOUGLAS: Well, it did not in the American experience, your Honour, and it is not an odd result if one has regard to the history of this Federation. If your Honour had expressed that view at some time in the first 50 years of this Federation, it would have meant that laws made for the benefit of the Territory of Papua New Guinea were, in fact, laws - that was, in fact, federal jurisdiction.

KIRBY J: Yes, one wonders whether that fact has been a subconscious influence on the minds of people looking at the Territory power.

MR DOUGLAS: Well, it may be more than just a subconscious influence upon the minds of people looking at the Territories power, your Honour.

KIRBY J: I think it was mentioned in Teori Tau, I think in some of those early cases. There was a hint that the idea of having appeals from the native people in Papua New Guinea was not really appropriate.

MR DOUGLAS: Well, Teori Tau is a recent decision of this Court which considered the question as to whether section 122 was bound by the acquisitions power, so that in respect of the acquisition of territory in the Northern Territory just terms had to be provided, and this Court decided three all on that issue; Justice McHugh, Justice Dawson and Justice Brennan were in favour of not over-ruling Teori Tau. Justice Gummow, Justice Gaudron and yourself were of a different view and Justice Toohey ‑ ‑ ‑

KIRBY J: This is Newcrest.

GLEESON CJ: Which is this case – Newcreest, is it?

MR DOUGLAS: Newcrest, yes. So, one cannot say that Teori Tau is necessarily a decision which has been overruled. Justice Toohey refused to do that.

KIRBY J: I am not talking about the authority. I am going back to fundamentals, which is what we have invited to do in a number of the submissions in this case, and if you go back to fundamentals, it does seem an odd conception that, for a provision which is express and specific about the judicature in Chapter III and a power under section 122, is to be seen as divorced from the very special provisions that are made for the judicature. It seems an odd result, given the importance of the judicial power.

MR DOUGLAS: Your Honour, it was not an odd result 50 years ago, and the decisions such as Boilermakers and decisions which have proceeded since then, have accepted the authority of this Court in cases such as Bernasconi, have rationalised Porter and have treated, not only once but twice, during the time of the Barwick Court, this duality of judicial power within the Commonwealth that is a dichotomy which exists between Territories jurisdiction, and the jurisdiction which exists within Chapter III.

KIRBY J: But, as Justice McHugh said in McGinty, it is necessary to read our Constitution with the eyes of late 20th century, almost 21st century Australians. You will find Justice Windeyer said something similar. Every new generation of Australians reads the Constitution and sees in it new ideas, and that is the making ‑ ‑ ‑

McHUGH J: I do not think I was suggesting you should give it a different meaning.

MR DOUGLAS: No, but having read your Honour’s judgment in Gould v Brown, I would be very surprised if in fact you were, because Justice McHugh is of the view, if I read his reasons for decision correctly in Gould v Brown, that not only am I correct in the submission which I am making, but also Boilermakers was wrong in rationalising Porter and Re Judiciary and Navigation Acts and in his view, the existence of the appellate jurisdiction from the Territories courts to this Court is an historical anomaly, which is bad law, in fact. Now, I do not make that submission, because I cannot and I would need to ask this Court to open up Boilermakers or reopen Boilermakers ‑ ‑ ‑

GAUDRON J: Well, it was not essential to the decision in Boilermakers, was it? I mean, the rationalisation that appears in Boilermakers is not essential to that decision.

MR DOUGLAS: No.

GAUDRON J: It is perhaps essential to Bernasconi and Capital TV & Appliances Pty Ltd v Falconer, but it certainly is not to Boilermakers.

MR DOUGLAS: In Boilermakers I believe the argument was addressed because it was suggested in argument that Porter was inconsistent to review of Re Judiciary and Navigation Acts.

GAUDRON J: Yes, it was not essential to the decision advanced.

MR DOUGLAS: Which was being advanced. I think it is probably not essential, but nonetheless it has been a very influential decision and certainly has played a role, and the role which it has played is no better emphasised than in a judgment of Justice Gummow in Kruger v The Commonwealth 190 CLR. If one goes to page 167 of that report your Honours will see that Justice Gummow sets out the function of Chapter III and then refers to certain decisions of the Court at the foot of page 167, and he goes over, and I think I will commence reading at page 168, if that is convenient to the Court:

An answer both simple and close to the text would have been given by a decision that, conformably with section 61 as to the executive power of the Commonwealth, provision was made by section 71 as to the judicial power of the Commonwealth in relation to the Territories.

In Boilermakers it was said:

“It would have been simple enough to follow the words of section 122 and of sections 71, 73 and 76(ii) and to hold that the courts and laws of a Territory were federal courts and laws made by the Parliament.”

Later, after referring to R v Bernasconi and Buchanan v The Commonwealth, Mr Justice Windeyer said:
“Nevertheless and although, because of the eminence of those who gave the judgments and of their close knowledge of the genesis of phrases of the Constitution, it may seem boldly unbecoming to say so, I do not think that the conclusion that Chapter III, as a whole, can be put on one side as inapplicable to matters arising in the territories is warranted by its actual language.”

In my view, there is much to be said for the proposition that the text of the Constitution, which must be controlling, places the territorial courts within the scheme and structure of Chapter III. However, as will appear, at least two subsequent decisions of this Court stand in the way of acceptance of that proposition.
It is true that controversies arising in the Territories might involve wholly or exclusively disputes as to rights and liabilities conferred or imposed pursuant to the general law rather than federal statute law. But section 7(1) of the Northern Territory Acceptance Act 1910 (Cth) provided:

“All laws in force in the Northern Territory at the time of the acceptance shall continue in force, but may be altered or repealed by or under any law of the Commonwealth.”

Such a provision excluded the possibilities of a legal vacuum and of the surrender and acceptance of the Territory being equivalent to the cession of territory by one power to another by treaty, so that the ceded territory became part of the nation to which it was annexed.

And then reference is made to other experience, and then he says:

Finally, there may be a “matter (a)rising under” a law made by the Parliament, within the meaning of section 76(ii) of the Constitution, although its interpretation is not involved; it is sufficient that the right or duty in question in the matter owes its existence to federal law or depends upon it for its enforcement.
Hence, the force in the statement, with reference to the position in the Australian Capital Territory, made by Sir Owen Dixon in Federal Capital Commission v Laristan Building & Investment Co Pty Ltd:

“It may well be that all claims of right arising under the law in force in the Territory come within this description [ie, within section 76(ii)], because they arise indirectly as the result of the Seat of Government Acceptance Act 1909 and the Seat of Government (Administration) Act 1910.”

However, on the appeal in Attorney-General (Cth) v The Queen, the Privy Council for the time being foreclosed any development to implement these views by a dogmatic statement that Chapter III was to be regarded as “exhaustively describing the federal judicature and its functions in reference only to the federal system of which the Territories do not form part”. That obliged Sir Owen Dixon, in Lamshed v Lake, to accept that Chapter III “may be treated as inapplicable so that laws made mediately or immediately under section 122 are primarily not within the operation of the Chapter”.

Then, in Spratt v Hermes, although many aspects of the subject were discussed, two points were decided. The first was that the Commonwealth legislation supported by section 122 may create or authorise the creation of courts with jurisdiction with respect to occurrences in or concerning a Territory without observance of the requirements of section 72 of the Constitution, so that the stipendiary magistrate hearing the charge in question under the Post and Telegraph Act 1901 (Cth) was validly appointed. Secondly, a court of a Territory having the appropriate local jurisdiction may enforce in relation to acts occurring within the Territory a law made by the Parliament upon a subject matter falling within section 51 of the Constitution and, as was the case with the 1901 statute, intended to operate throughout the Commonwealth. This is so, even though the Territory court is not one in which the judicial power of the Commonwealth is vested within the meaning of section 71 of the Constitution.

Capital TV & Appliances Pty Ltd v Falconer is authority for the proposition that the Supreme Court of the Australian Capital Territory, created and constituted by the Australian Capital Territory Supreme Court Act 1933 (Cth), was not a federal court nor a court exercising federal jurisdiction within the meaning of section73 of the Constitution. The consequence was that no appeal lay by force of section 73 of the Constitution. A law passed under section 122 of the Constitution might confer a right of appeal to the High Court from territorial courts, whether or not the matter in issue otherwise was one of federal jurisdiction. However, no such law applied to the instant case and the appeal was dismissed as incompetent. Nor was there any legislation conferring jurisdiction to grant special leave.

As it presently appears to me, and contrary to the submissions for the plaintiffs, it would be necessary at least to reopen these decisions if Chapter III were to be given that operation in relation to the Territories described in Boilermakers.This operation would follow from the “simple” reading of Chapter III such that the courts and laws in force in a Territory were federal courts and laws made by the Parliament or made pursuant to such laws.

KIRBY J: His Honour goes on at 171 to talk of the context of that time, the earlier decisions of the external territories with populations which he delicately described as being regarded in backward state of development, and the unsuitability of application to them of provisions such as trial by jury. So that, this is the context in which the court was then construing the Constitution. That context has disappeared like a dream, it is no longer part of our reality.

MR DOUGLAS: But the part of the reality we are dealing with at the moment, your Honour, is the fact that the Northern Territory, for example, recently had a referendum as to whether it should become a State and chose not to. If it chooses not to become a State, with all of the obligations and rights which it has as a State under this Constitution, why then should it be entitled to be part of the federal compact which the other States made? Because that is what these earlier decision decide. So far as the Northern Territory is concerned, that is the answer to that question, and as we would see it, that is a complete answer to ‑ ‑ ‑

KIRBY J: It is a different constitutional context. That is the only point I am making. Courts come to problems and construe the Constitution in the light of the experience and knowledge of the people who do the task of construction. It is a natural, inevitable phenomenon. We have a different environment.

MR DOUGLAS: But, your Honour, as Justice Gummow’s decision recognises, there are at least two decisions of this Court which stand in the way of the adoption of that view and the question is whether, in fact - although the respondents do not put it this way it does emerge from some of the submissions on the interveners – the question is whether, in fact, those decisions ought to be overturned.

GAUDRON J: They are not decisions, however, which are difficult, if not impossible, to reconcile with the language of Chapter III, are they not?

MR DOUGLAS: Only the view which your Honour has of the language of Chapter III, your Honour, and the simple view which was put in Boilermakers. The only anomaly which arises from that - from what we can see, is the non-existence of a constitutionally entrenched right of appeal from a Territories Court to this Court.

GAUDRON J: One of the difficulties, surely, is that which emerged in Spratt v Hermes and which, in some respects, impinged upon the issues in Newcrest. It really is difficult to say that a law of general application throughout Australia, referable to a head of power within section 51(i) is not a law made by the Parliament, even if it is simultaneously a law under section 122. That is to say, the difficulty with the decision seems to involve the notion that a law loses its character as a law under 51(i) if it is capable of being seen as a law under 122.

MR DOUGLAS: Those anomalies are present in the Constitution and have been recognised in those authorities. There are also difficulties in certain circumstances under existing constitutional interpretations with the expression “law of the Commonwealth”. For example, “law of the Commonwealth” as used in Bernasconi obviously has a different meaning from “law of the Commonwealth” as used in section 109 of the Constitution as interpreted in Lamshed v Lake. So, whilst there are these anomalies, those anomalies have been recognised in the authorities. Sir Garfield Barwick not only in Spratt v Hermes looked at the matter but also in Falconer and, from what one can see from his judgment, anxiously looked at previous interpretations of the Constitution, recognising the anomalies to which your Honour refers and nonetheless reaffirmed the authority of those earlier decisions and the existing interpretation which leads to this dichotomy which exists.

The type of problems which Justice Kirby has referred to, obviously in the case of the Northern Territory, can be resolved by choosing to become a State upon such terms and conditions as the other States lay out.

GUMMOW J: The problem in Spratt v Hermes were these territorial magistrates, were they not?

MR DOUGLAS: Yes, your Honour.

GUMMOW J: That gave rise to the immediate concern in that case, as I understand it. Is it not the position that the Northern Territory Supreme Court – I am not sure about the ACT – now a court is created by the legislatures of those Territories?

MR DOUGLAS: Yes, your Honour.

GUMMOW J: So they are not courts created by the federal Parliament, so section 72 does not apply to them. So the immediate problem in Spratt v Hermes no longer exists perhaps if you see what I mean.

MR DOUGLAS: If the Court takes the view that legislation under a general delegated power to make laws for the peace, order and good government of a Territory is not a law of the Parliament, I accept that. In other words, one could have courts ‑ ‑ ‑

GUMMOW J: What I am putting to you is: if Spratt v Hermes happened today, the magistrate in question would owe his office and his appointment to the government of the ACT acting under laws made by it under its Self‑Government Act.

MR DOUGLAS: There is no doubt about it ‑ ‑ ‑

GUMMOW J: He would not be an officer of the court created by the Parliament, so therefore the tenure question, which seems to have underlined Spratt v Hermes, would no longer arise. Section 72 would not attach. It may nevertheless be the case that he is still the court exercising federal jurisdiction in one way or another.

MR DOUGLAS: There is no doubt, your Honour, I would imagine that underlying the reasons in Spratt v Hermes was a view that it would be unfortunate if all judicial officers within a Territory had to be appointed in accordance with the provisions of Chapter III.

GAUDRON J: Sir Garfield Barwick said so in Capital TV v Falconer. He said that there was a distinct practical advantage in the decision in Spratt v Hermes which can only have been that.

MR DOUGLAS: That is not, as we would understand it, the reasoning which underlies the decision, but rather just confronting the practical reality. One of the matters which your Honour Justice Gummow has raised in Kruger is the fact that, as things presently stand, judges of Territory courts do not have the protection which is afforded by Chapter III.

GUMMOW J: Neither did judges of State courts.

MR DOUGLAS: No, that is McCawley v The King.

GUMMOW J: That would be to say that in the same way that Kable has an operation on the States, it may have an operation on the Territories.

MR DOUGLAS: So that they would have to be sufficiently appropriate repositories for the exercise of invested jurisdiction. I accept that point, your Honour, but I was just seeking to make the point whilst we were discussing the points which your Honour has raised in Kruger as to whether we should look at these authorities once more - that judges of a Territory court appointed under territorial legislation would not have the protection ‑ ‑ ‑

GUMMOW J: But you do not have a case about a Territory court.

MR DOUGLAS: No, I know, your Honour. But, it is relevant, as I would understand it, your Honour, as to whether these cases should be looked at again. If we are to confront that situation, what we would say is that it has been recognised in Boilermakers, both in the High Court and the Privy Council – Laristan’s Case, Lamshed v Lake, Spratt v Hermes and Falconer, that the duality or dichotomy between federal judicial power and non‑federal territorial judicial power is so entrenched that it ought not to be overturned. Although views to the contrary have been expressed in Kruger and Gould v Brown, there has been no majority in favour of such a view. We would say that that interpretation has been recognised, at least since the decision of this Court in Boilermakes in 1956, and in fact, it is really recognised by the earlier decisions referred to in that decision.

KIRBY J: You say that the solution, the practical solution is for the Northern Territory to become a State but that is not a solution open to the Territory in which the seat of government existed in. The Constitution seems to contemplate – I may be wrong here, but section 52 seems to contemplate that there will be a seat of government.

MR DOUGLAS: Yes, your Honour.

KIRBY J: And that is a Territory, so it really may not be available as a general solution to the practical problem if we are taking Sir Garfield Barwick’s approach.

MR DOUGLAS: There are special provisions in relation to the seat of government, section 52, which are being considered, and other authorities which I do not think I should go into but I accept that it may stand in a different position. But, what we would say is that there have been submissions raised in the submissions by the interveners for the Territories as to the inconvenience which such an interpretation would present them with and I do not seek to repeat those submissions but I direct the Court’s attention to them particularly the submissions for the Solicitor-General for the Northern Territory. One of the disadvantages of the present system, indicated by Justice Gummow in Kruger at 174 point 5, is that matters which could on view be:

within the original jurisdiction of –

the High Court –

have been entrusted by the Parliament to courts which, under received doctrine, are neither federal courts, nor courts of a State within the meaning of s 77 of the Constitution.

We would say in answer to that, however, that the received doctrine appears to be that in exercising such jurisdiction a territorial court to do so by virtue of the legislature power granted under section 122 and we would make particular reference to what was said by Sir Garfield Barwick in Falconer at 600 point 5 and by Justice Gibbs in the same decision at 625 to 626 point 3 and by Justice Walsh at 623 point 5, Justice Menzies at 609 point 2 to point 6, and Justice Windeyer at 612 point 2 to 613.

Whilst, theoretically, it may be the case as indicated by Justice Gummow at page 175 point 2 in Kruger, that under existing arrangements there is no constitutionally entrenched avenue or access to the High Court from a territorial court, there could be a situation in which the territorial court purports to exercise:

what otherwise would be considered federal jurisdiction, for example, by determining a matter arising under or involving the interpretation of s 122 itself ‑ ‑ ‑

KIRBY J: Would that not be a reason for regarding the Territory courts as federal courts for the purpose of the appellate structure, that you do not have anybody within this country ruled by the rule of law outside the pale?

MR DOUGLAS: But I think the rationale of it under the existing authorities, in any event, your Honour, is that jurisdiction which they exercise is jurisdiction which is invested under section 124 of the Constitution. So, they are not actually ‑ ‑ ‑

KIRBY J: I am puzzling over whether this is a correct view. It posits that there are some citizens of this country who are outside the guaranteed right of access to this Court by way of appeal. I mean, it exists by legislation but the Constitution was designed to provide things that could not be taken away by legislation because sometimes Parliaments and legislatures try to take away fundamental rights. Now, your theory of the Constitution assumes that there are some people in Australia with their causes who are outside the guaranteed right of appeal to this Court, and that is something that I just stumble over.

MR DOUGLAS: Your Honour, it is not my theory, I hasten to add. The existence of that right of appeal only arose by virtue of a mere majority in Porter’s Case.

KIRBY J: It is the theory you are propounding. I mean, I realise you base it on authority but I am testing the theory. The theory posits a consequence that seems unsuitable to the nature of the Constitution.

GAUDRON J: And it is a theory which does not simply apply to territorians. It could be, for example, that a Queenslander present in the Territory who falls foul of a law of general application, for example, possession of an imported substance that is proscribed, finds himself, although integrally a part of the Federation, not entitled to any of the protections that would have occurred if, instead of being in the Territory, he were in his own State, including trial by jury and the possibility of appeal to this Court.

McHUGH J: As against that, he would find himself in the same position if he was in Indonesia or if he was in Papua New Guinea beforehand.

KIRBY J: Indonesia and Papua New Guinea are not on any view part of the Commonwealth.

MR DOUGLAS: Well, I know your Honour ‑ ‑ ‑

McHUGH J: The problem is that 122 applies beyond the boundaries of Australia as such. It applies to “any territory placed by the Queen under the authority of and accepted by the Commonwealth”.

MR DOUGLAS: And that was the basis for the exercise of jurisdiction, as we understood it, in New Guinea at the relevant time. What your Honour says is true at the present time, but it may not be true of any other Territory which at some future time might be placed under our control theoretically. I can understand full well the anomaly that your Honour is putting to me but it is an anomaly which has been recognised now in this Constitution of ours for a long time. It has been recognised in many decisions of this Court.

KIRBY J: You know as well as I do that every Justice has an obligation to look at the Constitution with the assistance of authority but to read it as he or she sees it, and that is an obligation I will discharge, as all Justices do and have and will.

MR DOUGLAS: But, one way around it, which was suggested by three of the Justices in Spratt v Hermes, but not the other three - not the matter of appeal which your Honour is referring to, but the difficulties created in relation to the original jurisdiction - was to suggest that similarly, to the appellate jurisdiction, which is recognised in Porter, one could, in fact, confer original jurisdiction upon the High Court directly, under section 122. So, you would have a Justice of this Court exercising jurisdiction under section 122, but not via section 76(ii). In those circumstances, again, there would be no such right of appeal. That matter is not adverted to in any of the judgments in either Falconer or Spratt v Hermes, but, as we would see it, that is clearly the situation.

Reverting for a moment to the Gould v Brown decision, and to the approach which was taken, for example, by Justices Brennan and Toohey in that case, they also were only able to find the existence of a right of appeal to this Court from the invested State jurisdiction, which they said could be exercised by a Federal Court by saying that Federal Court, within the meaning of section 73, meant a Federal Court exercising any jurisdiction, not only jurisdiction, that is federal jurisdiction, within the meaning of Chapter III. That, again, presents its own problems as we would see it. I can probably only say it once more, but the anomaly is there, but it is recognised ‑ ‑ ‑

McHUGH J: Well, there are the anomalies. For example, if a Territory court gets the benefit of Chapter III, it seems anomalous that if it becomes a State, the Commonwealth, under 121, could make it a condition of its admission that Chapter III did not apply to it. So, the Commonwealth has less power over a Territory than it has over a new State. That seems to me to be a real anomaly.

KIRBY J: Such a condition might be incompatible with the scheme of the Constitution.

MR DOUGLAS: Perhaps the strongest argument I have in my favour is that the persons most directly affected and concerned by this, which are the residents of those Territories themselves, have made a very strong submission to this Court in this matter that those decisions should not be overturned.

KIRBY J: That has to be paid respect but we do not weigh up these things by the submissions that are put by the Attorney-General of the government of the Territory of the day.

MR DOUGLAS: Yes, but your Honour is saying that, to me, longstanding existing authorities of this Court ‑ ‑ ‑

KIRBY J: There would be many reasons of convenience to leave well alone, but it is a matter of principle. It is a matter of high constitutional principle which does not bend to convenience.

MR DOUGLAS: If it please the Court. I mean, I am reminded also that no one has sought leave to reopen them, at least certainly the respondent has not. I am not sure whether the Commonwealth seeks leave to reopen those decisions.

KIRBY J: I thought I read that the submissions were put that it was not necessary to consider the matter but that if it were, then leave would be sought. There is, of course, a question as to whether leave is necessary. Justice Deane in Evda did not think so, and I have said that I do not think so. The Constitution is the Constitution and it means what it says.

MR DOUGLAS: As we see it at the present time, your Honour, if one has regard to the analysis of the authorities in Justice Gummow’s judgment in Kruger which, with respect, we adopt, Spratt v Hermes and Falconer do stand in the way of the view that this law, section 51(i) of the Constitution, is a law of the Parliament within the meaning of 76(ii) and that jurisdiction cannot be invested in this Court or in the High Court.

There is an additional matter which arises in relation to what your Honour is putting to me which I have not so far addressed, and that is this. Whilst there may be reasons of principle why this Court would wish to adopt a different interpretation of Chapter III, it would also have the consequence that the original jurisdiction of this Court would include, as we would see it under existing authorities, all claims of right made under territorial laws. That could be a very large original jurisdiction which this Court could be called upon to exercise.

We see no basis for differentiating within the scheme of Chapter III between this Court and Federal Courts. We know that in Gould v Brown Justices Brennan and Toohey found themselves capable of doing that by rationalising the absence of any right of appeal from a single Justice of the High Court to the Full High Court if the High Court were to be invested with State jurisdiction under the cross‑vesting laws, but found that there was in fact such a right of appeal if you interpreted Federal Court within the meaning of section 73 as meaning a Federal Court exercising State jurisdiction.

As we would see it, there is no guidance to be found in the earlier authorities which would enable one to say that one looks differently at Federal Courts and the High Court when one is considering the ambit of the power to invest jurisdiction arising under a law of the Parliament under section 76(ii) and section 77.

GLEESON CJ: Mr Douglas, is that a convenient time?

MR DOUGLAS: It is, your Honour.

GLEESON CJ: We will adjourn until 2.15.

AT 12.46 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.15 PM:

GLEESON CJ: Yes, Mr Douglas.

MR DOUGLAS: Your Honour, as a result of this morning’s proceedings I have developed my submissions, apart from the question of severance, which Mr White will deal with, not fully but in a somewhat episodic way because of a lot of questioning from the Bench, which I appreciate and I do not have any quarrel with that. What I have done is I have handed up to the Court during the adjournment a copy of the outline or our oral submissions which, in perhaps a more coherent way, set out the reference from the judgments which I propose to go to and I do not propose to then take the Court to those this afternoon except that I would just like to deal briefly with the judgment of Gould v Brown just to show that there is nothing in Gould v Brown which is contrary to the submissions which we put. In Gould’s Case the dichotomy – if you go to page 9 of those notes you will see that we say the dichotomy between federal judicial power and territorial judicial power was clearly recognised in the decision of the Chief Justice Sir Gerald Brennan and Justice Toohey, who formed part of the majority. In particular, it was recognised that:

Jurisdiction conferred under the Territories power has been held to be non-federal. It may be vested by the Parliament in exercise of the power conferred by s.122, not in exercise of the powers conferred by Chapter III. Chapter III and, in particular, s.73 does not prevent the vesting in this court of appellate jurisdiction under s.122. Opinion has been divided on the question whether original jurisdiction under s.122 can be vested in this Court, but it is settled law that Chapter III deals only with Federal jurisdiction, whether original or appellate.

We then set out the views of Justice Gaudron, and I will not read that out. Justice McHugh discussed the Territory cases at paragraphs 131 to 133. His reasoning goes one better than the submissions which we make on behalf of the appellants in this case. It is his view that Bernasconi and Porter are wrongly decided in that they recognise – I am sorry, Porter is wrongly decided in that it recognises that Chapter III is not exhaustive of the High Court’s appellate jurisdiction. Whilst we understand and accept the position taken by Justice McHugh we are also mindful that not only Bernasconi and Porter but Boilermakers both in the High Court and Privy Council and the authorities after that would need to be reopened for that view to be accepted.

GAUDRON J: But none of those cases – well, put Boilermakers aside because we have discussed that before – but none of those cases, of course, deal with the situation where the power is invested in what is clearly a Federal Court created under section 71.

MR DOUGLAS: That is true, your Honour. The ratio for decision in Falconer was that the court was not a Federal Court and so therefore there was not an appeal under section 73.

GAUDRON J: The argument against you is, in a sense, that you could regard it as a law under 122 exclusively and outside Chapter III when it is vested in a Territory court, but different considerations apply when it is a Federal Court created under 71.

MR DOUGLAS: That is an argument which is addressed by the Commonwealth in their submissions. As I understand it, what they say is that you can have a law under section 122 which, when invested in a Territory court is territorial jurisdiction, but when it is invested in a Federal Court it becomes federal jurisdiction. That would seem to us to be an extraordinary consequence. It would seem to us, if not inconsistent with the ultimate decision in Spratt v Hermes or Falconer, it is certainly inconsistent with the reasoning in those authorities. We have, at the earlier part of this ‑ ‑ ‑

GAUDRON J: And it would also have the consequence, I suppose, that it would be federal or Territory jurisdiction at the whim of the Parliament.

MR DOUGLAS: It would be Territory jurisdiction if being exercised by a court of a Territory, and it would be federal jurisdiction if being exercised by a federal court. Anything is possible in this Court, obviously, your Honour, but that would seem to us to be ‑ ‑ ‑

McHUGH J: I would not think that. There are some limits.

MR DOUGLAS: But that would seem to us really to be quite inconsistent with Boilermakers, Spratt v Hermes, Capital TV v Falconer. I recognise that what those cases were deciding in terms of the ultimate result may not have been that very question, but the reasoning in those cases does seem to us to be totally at odds with such a proposition. Then going on in relation to Gould’s Case, Justice Gummow referred to the Territories cases simply to dismiss them on the ground of relevance. That is at paragraph 179. He also assumed, without deciding the question, the correctness of the view that a law which does not confer appellate jurisdiction on the High Court, but confers original jurisdiction on the High Court or another Federal Court with respect to matters arising under a law made for the government of the Territory, is a law with respect to civil matters arising under the Corporations Law of the ACT and does not conflict with Chapter III. In our respectful submission, the correctness of the view assumed in that passage would depend upon this Court granting leave to reopen the decisions of Spratt and Falconer.

Justice Kirby appears to have accepted in his judgment that prior authority supports the exercise of original as well as appellate jurisdiction under the Territories power by a law made under section 122 of the Constitution but does not appear to comment on the other possibility that a section 122 law may be a law of the Parliament within the meaning of section 76(ii). In this regard we would submit he has recognised the authority of earlier decisions, although I think probably that was written before this morning’s exchange. We also hope to persuade him that the authorities to which he refers at paragraph 307 do not support by a majority the view that the High Court and other Federal Courts can exercise original Territories jurisdiction by a law made under section 122 of the Constitution, nor are those authorities, in so far as they express such a view, good law.

The main judgment which supports the view that you can actually invest the original jurisdiction directly in the High Court or a Federal Court is that of Sir Frank Kitto in Spratt v Hermes. We do on page 2 of these notes look at the relevant parts of it. He found no reason in principle to distinguish between appellate and original jurisdiction as regards the power of the Parliament to give the High Court jurisdiction outside Chapter III by means of a law operating under section 122, but it is very clear from those parts of his judgment at about pages 250 and 251 that he was clearly of the view that there was this dichotomy between territorial and federal jurisdiction and that you could not, by means of a law under section 76(ii), invest a Federal Court or the High Court with federal jurisdiction.

McHUGH J: He changed his view between Lamshed v Lake and Spratt v Hermes, did he not?

MR DOUGLAS: That is developed to a certain extent in Sir Daryl Dawson’s judgment, I think, in Newcrest or Kruger but I do not think, relevantly – I stand to be corrected – that he changed his view in so far as he expressed his views about the effect which Boilermakers had had and the dichotomy and judicial power. So, what we would say is that if one looks at Gould, apart from the decision of Justice Gaudron where she made some comments which we have referred to, it is our submission that there is no support for the proposition that a law made under section 122 of the Constitution is a law made by the Parliament within section 76(ii) but the decision of the Full Court, in so far as ‑ ‑ ‑

GAUDRON J: How do you say section 76(ii) should be read, really? Simply as not including a law under section 122?

MR DOUGLAS: Yes, your Honour.

GAUDRON J: But what about a law that is a law under 51 and a law under 122?

MR DOUGLAS: That situation does not arise here because – if I can deal with it ‑ ‑ ‑

GAUDRON J: No, but it is involved in the cases.

MR DOUGLAS: It is involved in the cases. The reason why it does not arise here, perhaps if I could just dwell on that for a moment, I think, is best dealt with by my giving the Court a reference to Justice Gummow’s decision in Gould, particularly at paragraphs 160 to 164 where he sets out the legislative scheme and how the amending Act in 1990 made it clear that the fiat law did not rely upon the corporations power for its validity and as a result of those amendments, the law was amended so that it was one which applied not only to constitutional corporations but corporations generally.

We would say, and I do not think the suggestion is put otherwise, that this is not a law which relies upon section 51(xx) for its validity in addition to section 122, or to the extent that it would be valid, having regard, for example, to decisions such as Ex parte Walsh v Johnson, as to the distinction between power and intention, the Parliament has clearly expressed a view that its intention is not that this law be supported by the corporations power. If, as a matter of power, it is, it could not be a valid law because it applies to corporations generally and not only to constitutional corporations and that expression of intention would be one which would cause the whole law to be invalid rather than for certain parts of it to be saved.

Now, having said that, the question which your Honour Justice Gaudron has asked me, in some ways depends upon the reasoning in Newcrest’s Case because one cannot divorce, as we would see it, Chapter III and the effect which other provisions in the Constitution have on Chapter III or Chapter III has on other provisions in the Constitution from the way in which it has been looked at in other contexts. Now, in Newcrest, as your Honour knows, three Justices said – and we analyse this in these notes at page 7 through to page 9, I think. But one had the existing authority of Teori’s Case, which as I recall it, was a unanimous decision of this Court that the exercise of powers under section 122 was not controlled by the acquisition on just terms provision in section 51 of the Constitution.

GLEESON CJ: If laws made under section 122 are not laws made by the Parliament, by whom are they made?

MR DOUGLAS: Your Honour, they are made by the Commonwealth of Australia and the Parliament has been given powers, obviously, to make those laws but they are laws which are made for the Territory and not for the Commonwealth, that is the point.

GLEESON CJ: Your proposition must be not that they are not laws made by the Parliament, but that you add or read into 76(ii) some additional words of qualification.

MR DOUGLAS: But I am not the one who is doing that, your Honour. That has happened in a long line of authorities in this Court, where that dichotomy has been accepted, and it is the established jurisprudence of this Court and it was recognised as such by ‑ ‑ ‑

GUMMOW J: Why does one use this term “jurisprudence”?

MR DOUGLAS: I do not know. Well, I am prepared to use another word, your Honour.

GUMMOW J: It elevates the effect of decisions, does it?

MR DOUGLAS: Well, that is the effect of the decisions of this Court, yes, your Honour.

GAUDRON J: It maybe an established heresy.

McHUGH J: An established doctrine, perhaps.

MR DOUGLAS: It depends upon the point of view. I am addressing a Court where, for example, in Newcrest, three went one way, three went the other and the other one sat in the middle. There are obviously considerable differences of opinion on this Court as to the way in which these provisions should be interpreted, but the established interpretation of section 76(ii) is one where there is a dichotomy in judicial power and it does not include laws made under section 122. Obviously if the law can be supported by some other power, as your Honour Justice Gaudron put to me, well then there may be a view for saying that it does fall within section 76(ii), even under existing interpretation, but we are not dealing with such a situation here, and in giving that answer to that question I must have in mind the way in which this Court approached the question of the effect of the provisions of section 51 and, in particular, the acquisition on just terms power and the effect which that had on section 122; for example, if one comes back to our case here and looks at it in the context of Newcrest.

Sir Frank Kitto’s view in Spratt v Hermes, that you could have a law directly under section 122 which invested original jurisdiction on the High Court, not by section 76(ii), but just directly, as with the appellate jurisdiction in Porter’s Case, that was based on a view which he expressed that, effectively, section 122 was uncontrolled. Now, that is a view which is not altogether fashionable, having regard to the expression of view by some of the other Justices in that Court, such as Sir Garfield Barwick and Justice Windeyer and, having regard to the decision of this Court in Newcrest, because ‑ ‑ ‑

GUMMOW J: Well, not just Newcrest, what about excise ‑ ‑ ‑

MR DOUGLAS: Yes, I accept that too, your Honour; I am just referring by way of example. But, the decision in Newcrest, in many ways, would support the submission which we make that you cannot have a direct investment of original jurisdiction under section 122, as was postulated by Sir Frank Kitto, quite apart from the submission which we have put in relation to the absence of any right of appeal from any such invested jurisdiction in the High Court or a Federal Court. So, as we would see it, we gain some comfort from the way in which the acquisitions power has been looked at in Newcrest, in relation to that aspect of our submissions.

Apart from the question of severance, which I will ask Mr White to deal with, I believe that those are the submissions which we would wish to put to the Court.

GLEESON CJ: Thank you, Mr Douglas. Yes, Mr White.

MR WHITE: May it please the Court. As these submissions deal with the question of severance, I assume that it be held, contrary to our primary submissions, that jurisdiction has otherwise been validly conferred on the Federal Court.

GUMMOW J: Are there any written submissions on this?

MR WHITE: There are written submissions from paragraph 20 onwards in our summary of argument, and there are also further submissions on the matter in reply to those of the Commonwealth in paragraphs 12 to 20.

GUMMOW J: Thank you.

GLEESON CJ: These submissions proceed on two assumptions, do they not? One is that jurisdiction has been validly conferred on the Federal Court; but the second is that it is not permissible to confer on the Federal Court the jurisdiction which is beyond the concept of the exercise of judicial power.

MR WHITE: Yes.

GLEESON CJ: I am not challenging the second assumption, but what is the basis of it?

MR WHITE: The basis of it is the proposition that only judicial powers ancillary thereto may be conferred on Federal Courts – a view expressed by all of the Justices in Gould v Brown.

GLEESON CJ: I understand that, but if the basis of the majority reasoning in Gould v Brown is correct, and that is to say that Chapter III is only talking about federal jurisdiction, and the State jurisdiction is something else that may be conferred on the Federal Court, what is the basis on which the Chapter III limitations, which relate to federal jurisdiction, apply to conferring State jurisdiction?

MR WHITE: All of the judgments of the statutory majority, if I may use that phrase, said that that was so.

GUMMOW J: You are asked to give it some content.

MR WHITE: It is one of the negative implications of Chapter III espoused in the Boilermakers principle, which ‑ ‑ ‑

GAUDRON J: Was it because, as Chapter III prevented the Commonwealth Parliament, itself, conferring non‑judicial powers on a Chapter III court, it also prevented it from authorising the exercise of non‑judicial powers.

MR WHITE: Yes, and we respectfully submit that that is how the matter was approached unanimously in Gould v Brown and - - -

GUMMOW J: But, it is not just judicial power, though, it is judicial power of the Commonwealth. I mean, the sort of activity that was going on in the Navigation Act Case in many other countries, including Canada, would be regarded as judicial power and the judgments proceeded on that footing.

MR WHITE: Yes, they did.

GUMMOW J: The judicial power of the Commonwealth is a subclass of judicial power.

MR WHITE: Yes,

GUMMOW J: The question is, why is that subclass involved when it is purely State jurisdiction, when it is not necessarily offensive as being non‑judicial power in any general sense of the term?

GLEESON CJ: Especially, if what we are after is integration.

MR WHITE: Well, one does not, on any view of it, have integration, we would respectfully submit.

GLEESON CJ: Well, I am thinking, for example, of some of the jurisdiction exercised by the Land and Environment Court of New South Wales by the assessors of that court.

MR WHITE: Yes.

GLEESON CJ: Appeals from decisions of local councils on planning matters.

MR WHITE: The problem – well, not the problems, but the issues which would if they were raised be thrown up in those questions are the question in the nature and the powers which are exercised by the State’s judiciaries. It has never been suggested that they are bound by the restrictions on the conferral of non-judicial power, except in the Kable sense. On the other hand, the Boilermakers’ doctrine has always been held to apply to those courts which exercise the judicial power of the Commonwealth and it has been held that those restrictions apply to such a court, a Federal Court, exercising the judicial power of the Commonwealth; a Federal Court exercising the judicial power of the Commonwealth, whether this jurisdiction is conferred by State Parliaments or otherwise.

GLEESON CJ: Well, perhaps it will be more for the Solicitor‑General for the Commonwealth to tell us the extent to which the jurisdiction of, for example, the Land and Environment Court of New South Wales could be taken up by a Federal Court, but you are proceeding with the argument on the assumption that that second qualification, which everybody accepted in Gould v Brown, applies.

MR WHITE: Yes.

GUMMOW J: Another example would be the New South Wales Industrial Court.

MR WHITE: Which does not exercise judicial power at all but ‑ ‑ ‑

GUMMOW J: Well, it seems to exercise an amalgam.

MR WHITE: Yes.

GAUDRON J: And on the other hand, I suppose, going back to what the Chief Justice put to you, if Chapter III is not exhaustive of the power that may be conferred on a Federal Court, then there is no limit either as to, one would think, the source of power that can be conferred on it or the nature of the power that could be required, for example, to arbitrate industrial disputes, I would have thought, if Chapter III does not.

MR WHITE: Subject only to the qualification in Kable’s Case we submit that that is so, or at least that would be so.

KIRBY J: It does not necessarily follow. It depends upon the conception of the nature of a Federal Court into which you are putting the jurisdiction of the State. Just as State courts must, by Kable, be worthy receptacles of federal jurisdiction, the notion would be that in the conferral of any State jurisdiction it must be such as is appropriate to a Federal Court by reason of its nature under the Constitution. That is one precondition and the agreement of the federal Parliament is another.

MR DOUGLAS: And one of the characteristics of the Federal Court – I know I am repeating myself – we submit is the implication that, being a Federal Court, it can only exercise judicial power and those ancillary to it.

KIRBY J: I do not remember that there was any dispute about this in this Court in Gould v Brown.

MR DOUGLAS: I am sorry, I did not catch the ‑ ‑ ‑

KIRBY J: I do not recall that there was any difference about what I might call the “worthy receptacle” view of the jurisdiction that is conferred upon the Federal Court pursuant to State law and with the agreement of the federal Parliament. It must be such as is apt to a Federal Court under the Constitution.

MR DOUGLAS: More than that, we submit. We submit that, for example, in paragraphs 28 and 30 in the joint judgment of the Chief Justice and Justice Toohey, their Honours said that:

provided the State law which purports to invest State jurisdiction in a federal court invests only judicial power as that term is understood in the context of Ch III –

the conferral would be valid.

GLEESON CJ: Yes, that is common ground.

MR DOUGLAS: Quite.

GLEESON CJ: It may, however, be instructive to inquire why that is common ground.

MR DOUGLAS: Our submission is that it is one of the established implications from Chapter III that that is a restriction which a Chapter III court has on it and if the States can confer judicial power on the Federal Courts, they must take it subject to that restriction.

McHUGH J: But the one point, with respect, the majority judgments do not deal with in Gould v Brown is this proposition: In re Navigation says that the Commonwealth Parliament cannot confer judicial power as such on Federal Courts; it can only confer the judicial power of the Commonwealth. Yet the majority judgments say the Commonwealth can confer through the chain of the States State judicial power on the Federal Courts.

MR DOUGLAS: And that is a reason which supports the contention that the State Acts are invalid in their conferral of jurisdiction on the Federal Court, a proposition which it falls to others to develop but one which we certainly support.

McHUGH J: I do not see why, if they can confer this State judicial power on the Federal Courts, they cannot confer State non-judicial power on the Federal Courts. If the Commonwealth cannot confer advisory judicial power on Federal Courts but can be a party to conferring State judicial power on, I do not see any logical reason why they cannot confer State non‑judicial power.

KIRBY J: The answer, whether it is good or bad, may lie in the words “on Federal Courts”. “On Federal Courts”, what are Federal Courts? They are courts of a particular character.

MR WHITE: And we would add to that, that the limitations upon conferring non-judicial powers upon Federal Courts arise - and I think your Honour Justice McHugh was adverting to - not at all from the Judiciary and Navigation Acts Case but from the principle in Boilermakers. One of the matters to which we make reference in our written submissions on the question of severance is the operation of section 8(2) and (3) of the Corporations Act of the Commonwealth. The effect of subsection (2) of that section ‑ ‑ ‑

McHUGH J: What section is it, Mr White?

MR WHITE: Section 8 of the Act. The effect of subsection (2) is that:

Part 1.2 of the Corporations Law…..has effect to the exclusion of the Acts Interpretation Act –

and then, under subsection (3) the Acts Interpretation Act applies “Subject to subsection (2)”. Sections 8 and 58AA of the Corporations Law are both found in part 1.2 of the Law. The legislative intent evinced in section 8 of the Corporations Law is that so far as possible the Corporations Law of the Capital Territory and that of other jurisdictions, should operate as a single national law applying of its own force throughout Australia. If questions of severance arise in our proceedings, and if it is held that the State Acts cannot and do not validly confer jurisdiction on the Federal Court or that there is no power in the Commonwealth Parliament to accept the jurisdiction under the State Acts with the consequence that the State Acts have no operation to the Federal Court, we submit that one of the consequences of sections 8 of the Act read with section 8 of the Law is that, at least if a question of severance otherwise arises, the law must be construed, not by reading down any powers of the Federal Courts which are invalidly conferred as being non-judicial but by reading out of the description of courts upon whom powers are conferred, the references to Federal Courts.

We also submit that the better construction of section 8(1) of the Corporations Law is that it evinces a legislative intent that the Corporations Law of the Capital Territory and of other jurisdictions have a uniform application nationally. In the judgment of the Full Federal Court the ‑ ‑ ‑

GUMMOW J: Do you come down to your proposition in paragraph 25, is this a ‑ ‑ ‑

MR WHITE No, the last submission which I made is a submission which was not contained in our written outlines.

GUMMOW J: That is what I was wondering. Is it related to it? I am just wondering where it goes, that submission you just put, in terms of overall result.

MR WHITE Well, in terms of overall result, it means that if the prosecutors proceed in their challenges to conferral of jurisdiction by the State Parliaments, and at least if this Court is of the view that any of the powers, or that some of the powers conferred on the Federal Court are invalidly conferred because they are non-judicial, that the test is the appropriate means of severance is that which is indicated by section 8, in those circumstances, must require severance along the principles discussed in the judgment of Justice Gaudron in Gould v Brown.

HAYNE J: Severing the definition of “court”, not the function?

MR WHITE Yes. Not the description of powers, or the provisions which confer powers on the Court.

GUMMOW J: Yes, I see.

MR WHITE Now, we submit that that consequence follows even if the prosecutors are unsuccessful in their challenge, and the reasons for that are that, first, we submit, the contrary to what was decided or appears to have been decided in the Federal Court, but consistently with the view of all of the Justices who dealt with the point in Gould v Brown, it is clear that some parts of Part 5.9 confer non-judicial powers, which are not ancillary to the exercise of judicial powers, and we have given the references to those passages in footnote 18 which are referred to in paragraph 20 of our summary of argument. We do not understand the respondents or any intervener positively to contend to the contrary, although the respondents say that the issue does not arise. We submit the issue clearly arises for the reasons given by your Honour Justice Gaudron in Gould v Brown.

HAYNE J: Are any of the provisions that you say are invalid in this way, provisions that are directly in issue in this proceeding? Is there, for example, a 447A application outstanding? I was not aware of it.

MR WHITE: No, there is not, and we do not contend that the examination power in connection with the winding‑up is anything other than the exercise of judicial power.

GAUDRON J: But it is not expressed to be limited in connection with the winding‑up, is it?

MR WHITE: Precisely.

GAUDRON J: The examination power is a much broader power and, to some extent the hypothesis in Gould v Brown is that it is invalid – to some extent. The question that arose is whether that provision is read down or the cross‑vesting scheme is read down.

MR WHITE: And the means of doing that – with respect, yes; we submit that that is the severance choice, and the question then is what test or standard does the Corporation Act and the Corporation Law, itself, throw up as the means of resolving that question, if one accepts that there are at least some powers which are invalidly conferred.

HAYNE J: On no branch of your argument, at whatever level it bites, do you seek relief that specifies or identifies particular provisions as having to be read down or declared invalid?

MR WHITE: No, I do not think that is right, with respect, your Honour.

HAYNE J: With 447A?

MR WHITE: We submit that, indeed, all the powers under Part 5.9 other than those which are conferred in connection with the winding‑up.

GAUDRON J: Or save to the extent that they are conferred in connection with winding‑up. Is that not ‑ ‑ ‑

MR WHITE: That is a better way of putting it, yes.

GAUDRON J: Are there any in 5.9 that are limited to the winding‑up?

MR WHITE: No.

GUMMOW J: That is the problem, is it not?

GAUDRON J: Yes.

GUMMOW J: That discloses the problem.

MR WHITE: Yes and no, perhaps I should say, your Honour. Under 596A one of the circumstances in which the court may issue a summons is specifically where:

the corporation is being, or has been ,wound up –

but, the powers under 596B do not have that separate characterisation of the circumstances in which they can be exercised. And, the powers under 596A can also be exercised in the other grounds or circumstances described in paragraph (b).

KIRBY J: This is the matter that was dealt with by Chief Justice Brennan and Justice Toohey towards the end of their reasons, is it not?

MR WHITE: Again, if I can venture it yes and not, and of course by your Honour. The reasoning of your Honour and the Chief Justice and Justice Toohey was ‑ ‑ ‑

KIRBY J: I think I just agreed with their Honours on this point, did I not?

MR WHITE: Yes, but the significance of the point is that the question of severance was there held to arise at the stage of determining what parts of the Corporation Law could be validly picked up by section 7 of the State Act.

One of the things which their Honours did not do, and your Honour did not do, and because of the particular issues that arose in Gould v Brown, one can understand that, was to ask how the Commonwealth Act should be construed on this issue of severance, bearing in mind the requirements in section 8 of the Corporations Act, that regard is to be had to the provisions of Part 1.2 of the Corporations Law.

Hence, I think I am correct in saying that there is nothing in the judgments of their Honours or your Honour Justice Kirby which deals with what implications might arise from the terms of section 58AA in Part 1.2 or section 8 in Part 1.2. So that the severance question is not, we submit, governed by anything said by your Honour or the Chief Justice and Justice Toohey in Gould v Brown.

KIRBY J: But there was an argument clearly raised in Gould v Brown that it was of the nature, given that it was common ground, if one can put it this way, that you could not confer on a Federal Court, no matter with the authority of State Parliaments and federal Parliaments, jurisdiction which was incompatible with the type of jurisdiction which a Federal Court under the Constitution may exercise. The question was plainly then raised: are winding up orders and examinations of that character? So that issue was tendered and, by inference, that must have been disposed of contrary to the proposition that you are now advancing.

MR WHITE: By three of the Justices who dealt with it in that way, it was but for the reason, we submit, that the question of severance which was thus posed was different.

GUMMOW J: Well, the question of severance that was posed was a judicial power question.

MR WHITE: Perhaps “posed” was the wrong word. The way in which it was dealt ‑ ‑ ‑

GAUDRON J: Well, it was answered by looking to see what severance you did of the State law.

MR WHITE: Precisely.

GAUDRON J: Whereas if you approach it from the point of view of the authority conferred by the Commonwealth, you raise a different question. If you read down the authority, on either view it seems to be as open. You can read down one or the other or perhaps maybe you have to read down both or you have to engage in that exercise and see what is left.

MR WHITE: Certainly we submit that the way in which the matter was dealt with by the statutory majority, if I can use that inaccurate word, did not address the particular issue or would certainly resolve the particular issue which we seek to raise, as your Honour Justice Kirby said in paragraph 330 of the judgment, that the arguments on the issue of severance were finely balanced but, having regard to:

the carefully chosen language of section 7 of the State Act, construed in accordance with the Interpretation Act 1987 (NSW) s 31 -

it should be resolved in the way in which it was by their Honours the Chief Justice and Justice Toohey.

KIRBY J: So you are not trying to reopen that; you are saying that Chief Justice Brennan, Justice Toohey and I failed to look at the relevant federal law for reading down and that if only we had done that we would not have read down? Is that the proposition?

MR WHITE: Well, it is a bit different from that, because your Honours were dealing with the State legislation rather than the Commonwealth legislation. There was not, for example, in the State Act the equivalent of sections 8(2) and (3), we submit. Because you were looking at it at a different stage, your Honours did not feel it necessary to address the issue, albeit that it was one that was addressed in her Honour Justice Gaudron’s judgment.

GAUDRON J: Well, that is because we took different approaches. The statutory majority said a State cannot confer on a Federal Court what the Commonwealth cannot.

MR WHITE: Yes.

GAUDRON J: I said the Commonwealth cannot authorise that which it cannot confer, so it became different ends.

MR WHITE: And your Honour then went on to ask how should the choice of severance be exercised and, for reasons which we respectfully adopt, found that in order to give the laws the seamless operation which Parliament intended and one whereby all of the courts could act in aid of each other ‑ ‑ ‑

GUMMOW J: That is the point, is it not?

MR WHITE: Quite.

GUMMOW J: In determine the criterion of severance?

MR WHITE: Yes.

GUMMOW J: You are going to have one with two legs and one with one leg?

MR WHITE: Yes.

GUMMOW J: Well, they are not going to run the same speed.

MR WHITE: Quite. And it is better – and we submit that for the reasons which were given in the judgment of Justice Gaudron which I do not think we need elaborate, that is the preferred choice. The submission which is put against us is that so to construe the law would bring the national scheme or the intended national scheme down, but we submit that, with perhaps one qualification which I will come to, that is simply not so at all. At least if the powers conferred on Territory courts enable them to exercise the same ambit of powers which the States can exercise, the laws would still have such a uniform application but to the exclusion of Federal Courts.

GAUDRON J: Yes, and the Family Court, because, of course ‑ ‑ ‑

MR WHITE: And the Family Court. I said Federal Courts.

GAUDRON J: Yes. The Family Court is specifically mentioned. I do not know if it has ever exercised the jurisdiction cross-vested under the Corporations Law but clearly it could, if it is valid.

MR WHITE: It could and as appears, I think from our draft notice of appeal, we contend that the conferral of ‑ ‑ ‑

GUMMOW J: Well, property disputes quite often involve ‑ ‑ ‑

HAYNE J: Appointment of receivers to companies, for example.

GUMMOW J: Yes.

HAYNE J: Which has, I think, been done in the Family Court.

GAUDRON J: But you can appoint receivers other than on ‑ ‑ ‑

HAYNE J: Yes, but I think pursuant to statutory power.

KIRBY J: That last exchange prompts me to ask, and perhaps I should have asked Mr Jackson earlier, where is there a public document that would reveal the number of cases that are affected by this decision? I mean, I assume the Federal Court’s annual report has some – I think I once saw – I think we might have been shown Gould v Brown and a number of cases which, if the arguments of the first prosecutor are right or be rendered extremely dubious and susceptible to being set aside, I mean, where does one get some notion of the practicalities of the propositions that are being advanced to the Court?

MR WHITE: Well, I am afraid I am not in a position to answer that question. Could I defer that?

GLEESON CJ: You might check over the adjournment because there has been a formal and systematic monitoring of the operation of the cross‑vesting scheme for a number of years now.

MR WHITE: Yes, there is and without wishing to duck the question, but to confess inability to answer it could I respectfully ask that that be referred, perhaps, to the Attorney-General of the Commonwealth?

KIRBY J: It was you who said you did not want to pull down the whole scheme, something which ‑ ‑ ‑

MR WHITE: No.

KIRBY J: And that it was not necessary to do so on your proposition. Well, we at least have to have some notion of what is the consequence for all these years the scheme has been operating and all these orders that have been made by all these courts that are put in danger order by the reversal of Gould v Brown.

MR WHITE: What I intended to submit, albeit inadequately, was that there would still be a national scheme constituted by the courts of the States and the Territories exercising jurisdiction in aid of each other in all of the matters upon which jurisdiction was conferred under the law if the principles of severance set out in the judgment of Justice Gaudron were adopted.

GAUDRON J: One thing that worries me about reading down is this: as I recollect the Corporations Law, you could, as things presently stand, have a company wound up, say in the Supreme Court of New South Wales and then have your applications for winding-up made in the Federal Court. Is that possible?

MR WHITE: I am sorry, could have the company wound up and then ‑ ‑ ‑

GAUDRON J: And the examination applications made in the Federal Court or the Family Court, if you like. Let us say the Family Court/Federal Court; it does not matter. They would then no longer be in aid of the winding up, would they?

MR WHITE: No.

GAUDRON J: They would no longer be in aid of or incidental to the judicial power of the ‑ ‑ ‑

MR WHITE: Quite.

GUMMOW J: That certainly happens.

MR WHITE: Well, one ‑ ‑ ‑

GUMMOW J: A company is wound up in a State and then there are some steps in the insolvent administration taken in the Federal Court. That certainly happens.

MR WHITE: Undoubtedly. Some of the cases on the cross-vesting scheme I think have been just such cases. As well as section 8, the provisions upon which we rely to support the severance choice for which we contend are those in 58AA, both subsections (1) and (2), and the provisions of section 55 of the Corporations Act itself, all of which, we submit, support that approach. It may be that none of them individually necessarily compel such a construction in that alternative constructions of each of them might be open, but we submit they do support the intended operation of the law described in Justice Gaudron’s judgment.

GLEESON CJ: When you are looking for the answer to that question that Justice Kirby asked you, you are going to have to distinguish between cases that are cross-vested in the sense that they are sent off from one court to another and cases that are commenced in what I might call the original cross‑vesting jurisdiction, in other words, cases that go straight to a court pursuant to the provisions of the cross‑vesting legislation. When I said earlier that there has been to my knowledge for a number of years monitoring of cross‑vesting, I think the monitoring only covers the former of those two forms of cross‑vesting – that is, cases that are actually sent off from one court to another. I am just not sure, although the Solicitor for the Commonwealth may know, whether there are figures kept in relation to the other type of cross‑vesting – that is, cases that go straight to a court pursuant to cross‑vesting jurisdiction.

MR WHITE: Thank you, your Honour. The question of severance at the stage of section 51 does, at least potentially, throw up an issue. If this Court were to hold that the Commonwealth Act, although being made under and only under section 122 of the Constitution, was nevertheless an Act which conferred federal jurisdiction through the gateway of section 76(ii), we submit, for reasons which we have already put, that that would not be so. But if it were so and if it were a consequence of such a holding that non‑judicial powers could not be conferred on Territory courts under a law such as the present, then the principles of construction for which we are contending would clearly enough fall away because the Territory courts would then be in no different position from the Federal Courts.

GUMMOW J: But is it implicit in the reasoning in the joint judgment in Gould v Brown that Territory courts could receive through this system only “the judicial power of the Commonwealth”?

MR WHITE: Not at all. In the judgment of the Chief Justice and Justice Toohey, their Honours clearly put the Territories powers being one which had its own plenary operation, and that, we submit, is the ‑ ‑ ‑

GAUDRON J: Although, the power is to make a law for the government of a Territory. There may be questions as to the extent to which it is for the government of a Territory to vest State jurisdiction in a Territory court.

MR WHITE: That, perhaps, is, though, a different matter, we submit. The plenary operation of section 122 would clearly have the consequence that the conferral of jurisdiction by the Commonwealth on Territory courts was in the same position as the jurisdiction which is conferred under the various laws on State courts. Further, we respectfully adopt the reasons in paragraph 65 of your Honour Justice Gaudron’s judgment in Gould v Brown in relation to the ability to confer non-judicial power on Territory courts where it is not in conjunction with the conferral of federal jurisdiction.

We have raised the question of the validity of section 447A. We do not quarrel with the submission of the Solicitor-General for the Commonwealth; that that is a question which need not be decided if it is, nonetheless, found that under part 5.9, non-judicial powers are conferred upon the Federal Courts invalidly because the same question of severance would then arise, the same issue of principle would arise albeit in two instances rather than one. We have, nonetheless, made some further submissions in relation to that section and the effect of the Court of Appeal judgment in Australasian Memory v Brien which was delivered on the day we filed our summary of argument, but unless the Court wish to the contrary we would be content to rely upon what we have put in writing in

that regard. Unless we can be of further assistance, those are our submissions.

GLEESON CJ: Thank you, Mr White. Mr Palmer?

MR PALMER: If the Court pleases, it has been decided by agreement between the parties that the Solicitor-General for the Commonwealth and those supporting the validity of the legislation should now argue their positions and when they conclude, we will advance our argument.

GLEESON CJ: Yes, Mr Solicitor?

MR BENNETT: May it please the Court, I propose to deal first with the submission that the – leaving aside the Territory’s case of Spinks v Prentice, none of the three cases before the Court raise the issue of cross-vesting because each of the three is one in which the Court does not get to that issue and, therefore, that there will be no occasion for the Court in these proceedings to decide the correctness of Gould v Brown. Some aspects of it may arise indirectly in the Territory’s case, but the bulk of them do not

May I start by dealing with what one might call the bankruptcy case, the proceedings in relation to McNally and Darvall. Your Honours, it would be difficult to imagine, on the facts, a clearer case of accrued jurisdiction. May I just remind your Honours of the basic facts in those three law suits. The plaintiff, Mr Wakim, is a creditor, indeed substantially the sole creditor of a bankrupt estate. He sues the Official Receiver under the Bankruptcy Act for negligence, and the Act contains provisions which allow such an action to be brought. The negligence alleged is that he commenced some proceedings against a solvent party, the wife of the bankrupt, being a partnership claim, and then withdrew those proceedings. Now, that is a simple negligence claim in which the plaintiff contends that as a matter of law, the case which the Official Receiver had was properly brought against that person. The cases subsequently brought ‑ ‑ ‑

GAUDRON J: Yes, what is the category of matter that that is?

MR BENNETT: Section 76(ii), your Honour, a matter arising under a law made by the Parliament, namely the Bankruptcy Act.

GAUDRON J: Because the cause of action is given by the Act?

MR BENNETT: Yes, your Honour, yes, I think it is section 176 of the Bankruptcy Act. Then, it emerges that one possible defence that the Official Receiver may have is to say, “I was not negligent, I relied on the advice of my solicitors and my senior counsel”. So what the applicant does, what Mr Wakim then does is to sue the senior counsel who delivered an opinion saying that the action could not be maintained as a matter of law, and the solicitors who are said to have given similar advice.

Now, the reason for bringing those actions is obvious. The reason is, no doubt, that the Official Receiver might successfully defend by saying, “I relied on competent solicitors and counsel, therefore I was not negligent”. The plaintiff does not want to be faced with the situation where he gets different determinations in different cases, and he seeks the same damages, exactly the same damages, and the primary issue in all three cases will be the short question of law, did or did not this cause of action lie, was it correct or was it not correct to say that the cause of action did not lie, and therefore the Official Receiver should withdraw it. And, as I say, the damages are the same damages.

Now, it is true that there are separate actions at the moment, actions being heard together, actions which no doubt, if someone were to apply for it, could be consolidated. Had the applicant known of the ‑ ‑ ‑

GUMMOW J: That may be a question, the role of the procedural notion of consolidation which comes from outside, to the constitutional notion of “matter”.

MR BENNETT: That may well be so, your Honour. I do not think consolidation was something which was a procedural device well known in 1900, although I am not certain of that. But, whether it was or was not, the ‑ ‑ ‑

McHUGH J: I think it was. There is certainly cases in the Times Law Reports on consolidation long ago, as I recollect.

MR BENNETT: I stand corrected on that, your Honour. But, that does not affect the argument. We would submit that one looks to substance, not to form, in order to determine what a “matter” is. The “matter” here is that Mr Wakim claims he has suffered damage due to ‑ ‑ ‑

GUMMOW J: No, what I was putting to you is the fact that actions might properly be consolidated under the judicature rules may not necessarily mean that the comprise one matter.

MR BENNETT: I accept that, your Honour.

GUMMOW J: Can I take you back to section 176 which you said is the issue, or the first proceeding, that the “matter”, the controversy there, would seem to be not whether there is any legally enforceable obligation to Mr Wakim, but to the bankrupt’s estate.

HAYNE J: To whom the loss of damage is paid. The fact that Wakim might be the sole or principal creditor may be a happenstance in this case, may it not?

MR BENNETT: Yes, your Honour, section 176 provides that:

Where, on application by the Inspector‑General or by a creditor…..the Court is satisfied that…..a trustee…..has been guilty…..of breach of duty in relation to the bankrupt’s estate or affairs, subsection (2) applies.

And, the court could order that the official trustee make good the loss to the estate.

McHUGH J: I must say I am surprised the Commonwealth is running this point. There are important constitutional questions to be decided, and you are taking what seems to me to be a police court point.

MR BENNETT: Your Honour, in my respectful submission, North Ganalanja ‑ ‑ ‑

McHUGH J: The Commonwealth must be terrified of the validity of this legislation if it is going to seek to rely on points like this.

MR BENNETT: It is not a question of being terrified, your Honour, it is a question of North Ganalanja saying, and other cases saying, that this Court does not decide jurisdictional points in the abstract. Indeed, that was what precipitated Re Judiciary and Navigation Acts.

GLEESON CJ: Mr Solicitor, would the proceedings commenced against the Official Receiver be proceedings that could have been commenced in the Supreme Court of New South Wales under section 4 of the Commonwealth Act?

MR BENNETT: I do not think they are in any of the excluded categories, your Honour.

GLEESON CJ: Well then all these cases could have been heard in the one jurisdiction by being dealt with in the Supreme Court of New South Wales.

MR BENNETT: Well, they could have been, your Honour, yes, they could; in this particular case they could have been. That might not have been the case if people had been resident in different jurisdictions but, your Honour, that does not affect the argument. The question is, what is the matter? The matter is ‑ ‑ ‑

GUMMOW J: Well, just before you get to that, what about section 27 of the Bankruptcy Act? How would that impact on section 4 referred to you by the Chief Justice?

MR BENNETT: I do not have a Bankruptcy Act here, your Honour. Might I defer answering that question, your Honour?

GUMMOW J: Well, I will read it: Section 27 says:

The Federal Court has jurisdiction in bankruptcy, and that jurisdiction is exclusive of the jurisdiction of all courts other than the jurisdiction of the High Court under section 75 of the Constitution.

Now how does that fit in with the scheme in the cross-vesting legislation which, on its face, would, despite section 27, push things into the State courts?

MR BENNETT: Yes, one would have to look at the exclusions in the cross-vesting legislation, your Honour.

GUMMOW J: Yes, that is right.

MR BENNETT: Your Honour, I do stress that this does not affect the argument. The argument does not depend upon the issue of whether or not the proceedings could have been brought in the Supreme Court, except perhaps in a very indirect sense, but if they could not, that is all the more reason why there should be an accrued jurisdiction. But the question is whether there is one matter, and the matter here is that a creditor complains that an act of negligence has occurred resulting in a claim not being brought on behalf of the estate. The relief which is sought against the official receiver cannot exist cumulatively upon the relief sought against the parties who advised the Official Receiver. There may be a minor difference as to the damages, in that in one case it might be his proportion of the estate rather than the whole estate, but, in either event, the damages are not cumulative. They are, in a sense, alternative, because the ‑ ‑ ‑

GAUDRON J: Would they not be genuinely true alternatives? Only in the event of the failure of the proceedings under section 176(2) could it be said in any court that there was any damage and therefore any cause of action against the solicitor and barristers.

MR BENNETT: Yes, your Honour, and that emphasises that ‑ ‑ ‑

GAUDRON J: Well, I would have thought it took you away from it. The controversy is not the same; there are true either/or controversies. You have one or the other.

MR BENNETT: But, your Honour, with respect, that is a classic matter because if one says, “Either I am entitled against X or I am entitled against Y”, and they are true alternatives, if it is not one matter one could have the spectacle of one court deciding one way and one deciding the other way and the plaintiff losing on both on the same point. That would clearly be something not consistent with the interests of justice or the proper administration of courts. That is why in all, I think I can say without exception, procedural statutes governing Supreme Courts and lower courts, there is a provision which allows one to sue two people in the one action in the alternative where there are true alternatives, and indeed that is frequently done.

We would submit when one looks at the substance of what is a matter, that makes it a classic single matter and one can test it very simply by saying, “Well, if it had been done in the one action or if the Official Receiver had joined the solicitor and barrister as third parties, as cross‑defendants, would there have been the same result?”, and clearly that would have been an appropriate way of the matter being dealt with. There is authority for the proposition that where an action is commenced against a defendant and the defendant says, “Well, if I’m liable it is the fault of my solicitor”, and issues a cross-claim against a solicitor, that that cross-claim can be within accrued jurisdiction if the primary claim is federal, for example, a section 52 claim.

GAUDRON J: Well, I am just wondering are you correct in your statement that the trustee could cross-claim in 176 proceedings against the solicitor and barrister.

MR BENNETT: Well, your Honour, in most ‑ ‑ ‑

GAUDRON J: I wonder about that because the court may make an order – they seem to be specific orders directed to controlling the Official Receiver as trustee, as it were.

MR BENNETT: Yes, and then Rules of Courts say, “Where a claim is brought against a person and there is a related claim which that person has against a third person, that person can bring it”. It is not strictly the old third party notice procedure, it is more ‑ ‑ ‑

GAUDRON J: Well, put aside cross-vesting.

MR BENNETT: I am putting aside cross-vesting, your Honour.

GAUDRON J: Yes. You would say that it is – well, I do not think the Rules help you, as such. You have to say that a claim by the Official Receiver for indemnity in respect of the amount that is ordered to be paid by him is really the same controversy.

MR BENNETT: It is part of the same controversy. He would, of course – alternatively, he might say, “I am not negligent because I obtained this advice”, in which case the factual inquiry becomes the same. But, leaving that aside, under the Federal Court Rules:

A respondent may cross-claim against any person whether another party or a third party for any relief which is related to or connected with the subject of the proceeding.

That is Order 5 rule 1 subrule (2) and, of course, there are similar rules in most States.

KIRBY J: Mr Solicitor, I am beginning to feel the same feeling of anxiety that Justice McHugh presented. I realise you are trying to help us to avoid the error of dealing with a matter which is not ripe for determination, but perhaps those submissions are not at the heart of the issue. I realise they are the gateway through which one comes to the issue, but everybody is here and all these submissions have been presented, and the Court is here with the opportunity of dealing with a very important constitutional matter which needs quickly to be determined.

MR BENNETT: And which may not arise, your Honour, and I am joined in this submission by all six States and both Territories.

GAUDRON J: In one sense, the question, what is a matter, is also an important constitutional issue and the wider the matter, at least, the less the need for the cross-vesting legislation - the less the practical need. I mean, both issues are important, surely.

MR BENNETT: Your Honour, we put it as a very simple proposition in this case.

GAUDRON J: You put it as a simple proposition but it is, nonetheless, an important constitutional question to identify what is a matter.

MR BENNETT: Yes, but that issue is antecedent to the cross-vesting issue in this case.

KIRBY J: Will it blow the need for cross-vesting legislation away altogether? Take the widest view that one wants of cross-vesting, there will still be coincidental proceedings in different courts so that one day or other, and one would think earlier rather than later, this Court would have to deal with the issue that I, at least, expected that we had come together to address.

MR BENNETT: There is no doubt of that, your Honour, but it is ‑ ‑ ‑

KIRBY J: We do, even on your argument, I think, have to deal with it in the Territory case.

MR BENNETT: It can be avoided in that case on the basis of the decisions on 76(ii) and 122, but I will come to that when I come to it. But, your Honours, it is my submission and ‑ ‑ ‑

HAYNE J: Just before you go on, Mr Solicitor, the action under 176 is an action for breach of duty, what is the duty that is allegedly broken? Is it more than the duty to get in the estate? I know it is dressed up in the statement of claim with many words, but is it more than a breach of duty to get in the estate?

MR BENNETT: With respect, your Honour, the characterisation goes further than that because there may be a failure to get in the estate which does not fall within section 176, for example, where there is a failure totally without fault, a failure where it is substantially impractical, or a failure where there is a mistake made which is regarded as excusable.

HAYNE J: Because as you earlier described it, you described it as though it were an action savouring of an action for negligence against the Trustee, and it is by no means self-evident to me that that is the proper characterisation of the claim that is made.

MR BENNETT: That is the way it is pleaded, your Honour, and that, no doubt, is seen as the particularisation of the breach of duty, that if the Official Trustee negligently fails to get in an asset, that is a breach of duty.

Your Honours, those are the submissions in relation to the first of the cases. I do not need to say anything much about the position of Mr Gould. It was virtually, although not formally, conceded by Mr Rares that there was issue estoppel or res judicata in his case, with a simple cri de coeur that he should not be the only person in Australia in relation to whom the cross-vesting scheme exists. But that is the consequence of the system of courts deciding cases.

In relation to Mr Amann, we say this: that he is a co-director, he is a person who was also to be examined, he obtained the benefit of the previous proceedings without taking part in them, because his examination was deferred pending them – and that appears from the documents your Honours have – and there is a line of authorities suggesting that in such cases it is an abuse of process by way, if one likes, quasi issue estoppel for a person to seek to litigate the issue which has been litigated and lost by another, and there are a number of cases we have referred to in our supplementary submissions, which were filed yesterday, in relation to that.

HAYNE J: Are we to dispose of this matter on a basis that an intervener contends that a party might have brought application for summary termination of the proceeding in this Court as an abuse of process. Is that what your submission comes to, Mr Solicitor?

MR BENNETT: Yes, your Honour, nine interveners, but yes, your Honour.

HAYNE J: The number is not self-evidently relevant to the point that I put to you, is it, Mr Solicitor?

MR BENNETT: No, your Honour.

HAYNE J: No.

MR BENNETT: But we would submit there is no reason why an intervener cannot put to this Court that an issue does not arise and that in accordance with the North Ganalanja principle, this Court ought not to decide it.

GAUDRON J: It is a bit worse than that, I am afraid. We are talking about applications for prohibitions, are we not, in each of those three cases?

MR BENNETT: Yes, your Honour.

GAUDRON J: If the Federal Court has got jurisdiction by reason of the accrued jurisdiction, then prohibition will not go.

MR BENNETT: Yes, your Honour.

GAUDRON J: Yes, assuming the cross-vesting legislation is invalid or held to be invalid.

MR BENNETT: It would not make any difference, because ‑ ‑ ‑

GAUDRON J: It would still be necessary to decide these points before prohibition would lie.

MR BENNETT: Yes, your Honour, yes.

GLEESON CJ: But you are off accrued jurisdiction now, are you not?

MR BENNETT: I am sorry, your Honour?

GLEESON CJ: You are away from accrued jurisdiction?

MR BENNETT: Yes.

GLEESON CJ: You are on to Amann. There is no question of accrued jurisdiction arises in Amann?

MR BENNETT: No, your Honour, just abuse of process.

KIRBY J: It may be that you could persuade us to this point but it seems, shall we say – I am just surprised that this is not at the end of your arguments. That you are not dealing with the principal point that we are met together to deal with, instead of, as it were, coming to that issue with these three points that seem to be an attempt to lock the door and throw away the key for the time being.

MR BENNETT: We would prefer, of course, that the three points are dealt with first, and it may have never been necessary for the balance to be argued. The Court has not adopted that order ‑ ‑ ‑

McHUGH J: I am not sure you do not need leave to raise these points. Where do you get your right of intervention on these points?

MR BENNETT: Under the Judiciary Act an intervener becomes a party and the right of intervention, in my submission, covers all matters in the litigation; but, particularly here, where the matters being raised go to the issue that the constitutional questions do not arise. In my respectful submission, there is nothing surprising about an intervener put into a court that a constitutional issue parties seek to raise is one which this Court ought not to deal with.

Let me give an example to your Honour: suppose two people, two law professors, anxious to have a determination of some constitutional point, fraudulently, if one likes, set up a dispute and brought it to this Court. It would be open to an intervener to say, “For these reasons this is not a real dispute and this Court ought not to decide the constitutional question”.

KIRBY J: Yes, but you would then come along and say there is no matter, and this is an advisory opinion, and let them go away. But, there is no doubt that the question of the validity of the cross‑vesting legislation is an extremely important and very practical and pressing, and urgent question, and it seems odd that the Commonwealth is coming along here to say do not deal with it.

MR BENNETT: Your Honour, we take the view it has been decided, and I will be making submissions about St Helens Farm when I come to that, and we will be submitting that the issues in ‑ ‑ ‑

GUMMOW J: I think you might be running uphill with that.

McHUGH J: Yes,I think so.

GUMMOW J: As to the third of these three matters, Mr Amann’s action, I do not quite see how you get off the ground there. I know “abuse of process” is a phrase that sets the pulse racing in some judicial breasts. It does not set mine racing in this case.

MR BENNETT: We have set out a number of cases ‑ ‑ ‑

GUMMOW J: You are really saying they do not have standing in some way, is it, to get prohibition?

MR BENNETT: Yes, your Honour, because ‑ ‑ ‑

GAUDRON J: Are you saying that as a matter of discretion they should be refused remedy or as a matter of actual standing, prohibition; they have no interest to get prohibition?

MR BENNETT: It is a matter of law that where a proceeding is an abuse of process, the Court dismisses it.

GLEESON CJ: Are there no relevant facts of which we need to be informed?

MR BENNETT: The only relevant fact are that they are co‑directors; co‑pending examinees, and that one of them brought the prior proceedings, and the other obtained the benefit because his examinations, likewise, were adjourned pending those proceedings. They are the only relevant facts, and they all appear.

GUMMOW J: Well, we are not talking about abuse of processes of tort here, are we?

MR BENNETT: No, no, not that sense of abuse of process.

GUMMOW J: No. So we are really talking about some discretionary defence, are we not, decked out as abuse of process?

MR BENNETT: Well, your Honour, the phrase “abuse of process” is used in the cases. It is a quasi issue estoppel or ‑ ‑ ‑

GUMMOW J: Well, I do not know about that.

GAUDRON J: It is an extension of Anshun estoppel but, as I understand it, this Court has not said that Anshun-type estoppel operates in that sort of situation, has it?

MR BENNETT: It has, your Honour, in a case called Osborne v Smith 105 CLR.

GUMMOW J: That is a case about a will, is it not?

MR BENNETT: Yes, your Honour, but the principle referred to in that case, and the cases which are used as authority, are not all will cases.

GAUDRON J: And then, assuming that to be so, your question is, can that operate in the face of section 75(v)?

MR BENNETT: Well, your Honour, the principle of issue estoppel or res judicata must operate against section 75(v) in relation to Mr Gould.

GAUDRON J: Well, if the Parliament cannot take away section 75(v) jurisdiction, how can an extension of Anshun-type estoppel take it away?

MR BENNETT: Because if that were not so, your Honour, it would be open to any unsuccessful claimant for prohibition to return again and again.

HAYNE J: A man is not an unsuccessful claimant for prohibition; a man is someone different. The facts, which you contend are the relevant facts, notably omit any suggestion that a man stands in any way as privy to the other man.

MR BENNETT: No, he is not privy to it, your Honour, he does not need to be.

GUMMOW J: The case of estoppel is an equitable doctrine; there is not much equity here in shutting this man out from his remedy under section 75(v).

MR BENNETT: No, it is almost closer to res judicata than issue estoppel. But, your Honour, the phrase used is neither; the phrase used in the cases is “abuse of process”. Osborne v Smith 105 CLR was, of course, a probate case, but what is said by Justice Kitto at page 158 of the report - he starts at the bottom of the page by referring to the probate practice and, he says:

It was both proper and necessary in the second suit to treat as binding upon the appellant the findings as to knowledge and approval which had been made in the first suit. She, it is true, was not a party to the first suit; but there is a well-established principle of probate practice‑

so, it is limited at this point –

which grew up in the ecclesiastical courts, that any person having an interest may have himself made a party by intervening, and that if he, knowing what was passing, does not intervene, but is “content to stand by and let his battle be fought by somebody else in the same interest”, he is bound by the result, and is not to be allowed to re‑open the case.

There were then two cases referred to for that proposition: one early English case, which I will come to in a moment, and one decision of the House of Lords in an appeal from West Africa in Nana Ofori Atta II v Nana Abu Bonsra II, (1958) AC ‑ ‑ ‑

McHUGH J: Is there any time limit on your submissions, Mr Solicitor? You seem to be wasting some valuable time that should be spent on the constitutional issues, not on these matters, which can be left to other parties. They raised them. I cannot understand why the Commonwealth is taking up its time but, anyway, it is for you and your team.

MR BENNETT: It is not going to take me very long, your Honour.

McHUGH J: It is a matter for you how you spend your time.

MR BENNETT: Now, that West African case is reported in (1958) AC 95 and the principle there is applied in a case having nothing to do with probate. It is a real property case and at page 101 in the judgment of the Privy Council. I said House of Lords before – it is Privy Council, I apologise. Their Lordships say this at point 7 of page 101:

The general rule of law undoubtedly is that no person is to be adversely affected by a judgment in an action to which he was not a party, because of the injustice of deciding an issue against him in his absence. But this general rule admits of two exceptions: one is that a person who is in privity…..the other is that a person may have so acted as to preclude himself from challenging the judgment, in which case he is estopped by his conduct…..English law recognizes that the conduct of a person may be such that he is estopped from litigating the issue all over again. This conduct sometimes consists of active participation –

for example in landlord and tenant.

On other occasions the conduct consists of taking an actual benefit form the judgment in the previous proceedings, such as happened in In re Lart –

and that is this case.

Those instances do not however cover this case, which is not one of active participation in the previous proceedings or actual benefit from them, but of standing by and watching them fought out or at most giving evidence in support of one side or the other.

Then after the quotation from Wytcherley v Andrews which refers to the principle as being one:

founded on justice and common sense, and acted upon in courts of equity –

they go on to say:

Mr. Phineas Quass argued before their Lordships that the principle stated by Lord Penzance was confined to wills and representative actions and has never been extended further. No decision, however, was cited to their Lordships which confines the principle to wills and representative actions. Their attention was indeed drawn to one case where a like principle was applied to mortgages in somewhat special circumstances: see Farquharson v. Seton. But assuming, without deciding, that the English decisions have been so confined, their Lordships would point out that there is nothing in the principle itself which compels it to be limited to wills and representative actions. The principle, as Lord Penzance said, is founded on justice and common ‑ ‑ ‑

GUMMOW J: He is not talking about abuse of process. Lord Denning is not talking about abuse of process.

HAYNE J: He basis it on 103, it seems to be the recognised thing in this part of West Africa for all persons to join in the action.

MR BENNETT: Yes.

HAYNE J: Is that the best authority you have for the proposition, Mr Solicitor?

MR BENNETT: Well, your Honour, I will not take your Honours through the others. There is a list ‑ ‑ ‑

McHUGH J: I mean, this argument of yours would lead to the view that in, say, the Excise Case, that a liquor dealer who did not join in could never challenge the constitutionality of the legislation at some later stage.

MR BENNETT: Well, your Honour, that is a much more distant relationship than in this case. This is a case where there were two co‑directors of a company who are both faced with examination orders and, naturally, one, rather than two, takes the challenge. There is no point in them both doing it. Now, that is a classic case, we would submit, within the principle referred to by the Privy Council in that case. I have given your Honours references to the other cases in the submissions. It is paragraphs 3.14 and following of the supplementary submissions, and paragraphs 3.12 and following of the main submissions.

GUMMOW J: And I see this decision of the Privy Council was applied in House of Spring Gardens Ltd v Waite (1991) 1 QB 241.

McHUGH J: It is a Court of Appeal decision.

MR BENNETT: Yes, we have not gone to that, your Honour.

GUMMOW J: Well, that is an Anshun estoppel case, that is a Henderson v Henderson Case. That is how it has been understood since them.

MR BENNETT: Yes.

GUMMOW J: No doubt it has special significance in West Africa but outside that, that is how it has been regarded. It is not about abuse of process.

MR BENNETT: But that is sufficient for our purposes, your Honour.

GUMMOW J: No, it is not because it is an equitable doctrine and you are asserting that in the face of section 75(v) of the Constitution in an administrative law complaint, if you like to put it that way. It is a public law case, 75(v).

MR BENNETT: Well, your Honour, if one goes back to the abuse of process cases ‑ ‑ ‑

GUMMOW J: It is not an action between parties.

MR BENNETT: Yes, but we would submit the abuse of process cases to which – cases like Hunter and Skaventzos and Reichel v McGrath those cases really are capable of covering the same situation because there is a situation where there is an action, there was an action which determines an issue and there is someone else who could easily take part in it, chooses not to, takes the benefit of it and then seeks to bring a second case.

McHUGH J: Well, if you are right, this doctrine will have great implications, no doubt favourable to the Commonwealth, if 20 immigrants arrive on a boat from Vietnam and one takes an action and the other 19 do not join in, on your argument the other 19 would be precluded from challenging the validity of some piece of legislation which applied to them all, would it?

MR BENNETT: Your Honour, it is a question of degree in each case, of course. But if there was ‑ ‑ ‑

McHUGH J: You could not get anything closer than being on the same boat from Vietnam arriving at the same time.

MR BENNETT: It may well be, your Honour, that that would be the view taken. That a challenge of this sort, that if made by one and if it fails, the others, knowing that they could have joined in and assuming that which may not be a valid assumption in your Honour’s example, would not be entitled to bring the case again.

CALLINAN J: Do you mean that every action is a representative action? That is what it comes down to.

MR BENNETT: Well, as to people who are in a sufficiently close relationship to it that one would expect them to have joined in it or been parties to it, particularly if they have obtained a de facto benefit from the action. Anyhow, those are the submissions ‑ ‑ ‑

GLEESON CJ: Well, that covers your primary submission.

MR BENNETT: Yes, your Honour, that is what I am now going to come to. Your Honours, the starting point in this case is to look at the true nature of the implications in Chapter III and the source of those implications, and we would submit that if one did not have Boilermakers and one did not have Judiciary and Navigation Acts, one would have no difficulty in starting and finding two basic premises. The first is the separation of powers, and the separation of powers has the consequence, as was held in Boilermakers, and as has been standard doctrine for many years, that one cannot confer non-judicial functions on a Chapter III court. That, of course, is a simple application of a principle of separation of powers. One would also say, I am instructed by those two cases, that Chapter III courts could not be permitted to ‑ ‑ ‑

GLEESON CJ: Just before you go past the first proposition, you expressed it in that way, conferring a non-judicial function on a Chapter III court, but that is either the result of or brings about the consequence of a certain separateness. Separateness between what entities.

MR BENNETT: For the purposes of that proposition, your Honour, the legislature, the executive and the judiciary.

GLEESON CJ: Which legislature?

MR BENNETT: At this stage, I am only talking in terms of the Commonwealth legislature, executive and judiciary. I will come to how it fits in with the ‑ ‑ ‑

GLEESON CJ: Is there a separateness that exists between the Commonwealth judiciary and State legislatures?

MR BENNETT: Well, yes, your Honour, but ‑ ‑ ‑

GLEESON CJ: Or are they closer?

MR BENNETT: They are certainly not closer. They are parts of different polities but, yes, they would be, and one can distinguish those characteristics of State power which are legislative, executive and judicial. Although the doctrine of separation of powers in its pristine form does not apply to the States, one certainly can identify characteristics of State power which fall into the three categories.

GLEESON CJ: Well, section 143 of the Western Australian Sentencing Act confers upon the Supreme Court of Western Australia the power to give guideline judgments concerning sentencing of offenders – is that jurisdiction that can be exercised by the Federal Court?

MR BENNETT: No, your Honour, for a number of reasons to which I will come. The first matter I have to deal with before I can answer that question is the issue concerning the very first of the five premises which led to the conclusion in In re Judiciary and Navigation Acts. The first of the five premises was that the nature of the power there conferred on the Court was judicial power. That was something which was doubted in Boilermakers, both in this Court and in the Privy Council. The answer to your Honour’s question will involve analysing the effect of that first proposition in the sorites and whether it remains good law or not, but at this stage ‑ ‑ ‑

GUMMOW J: Could there be an appeal to this Court under section 73 from a decision of the Western Australian courts?

MR BENNETT: Probably not, your Honour, but again to some extent the answer to that would depend on something which is not essential to my argument which is whether or not such a conferral of power is judicial power or not. That is something to which I propose to come.

McHUGH J: You concede, I suppose, that there is no way the Commonwealth Parliament could pass a law investing the Federal Courts with jurisdiction to deal with sentences under Western Australian law?

MR BENNETT: In the absence of a particular case?

McHUGH J: Yes.

MR BENNETT: In other words, in gross as in In re Judiciary and Navigation Acts?

McHUGH J: Yes.

MR BENNETT: Yes, your Honour.

GAUDRON J: Could it do it to the Federal Court under section 122?

MR BENNETT: Probably not, your Honour, because one would be getting very close to the federal equivalent of Kable reasoning – an extension of Wilson, if one likes – for this reason. This is really the second starting proposition. To give a court power to give judicial advice in gross as to the validity of legislation or sentences or matters of that sort is in a very real sense inconsistent with judicial power because it has the consequence that a person who comes to court when the real issue arises finds that there is a binding decision on which that person, and indeed nobody, has been heard. When one goes to the nature of a matter, the nature of a dispute between parties, one has a decision which is made in what is really a quasi‑legislative context. It is a classic example of what the separation of powers, particularly in a Federation where the Chapter III courts hold the balance of determining where the lines are, particularly in that area – it is inconsistent with judicial power that they determine matters in advance in that way.

This Court has always worked on the basis that it hears matters as they come up and as they arise – hence my preliminary submission which was not met with great warmth. But, that is part of the nature of the judicial process. The Court does not say it is desirable that this Court should express a view on some constitutional question. Nor can any person require that the Court do that in the absence of a dispute.

McHUGH J: Let us take a dispute. Could the federal parliament say, “We have created the Federal Court, we are now going to invest it with State jurisdiction under the New South Wales Corporations Law”. The answer has to be no, is it not?

MR BENNETT: Could the Commonwealth do that?

McHUGH J: Yes.

MR BENNETT: No, it could not, your Honour, not on its own.

McHUGH J: It cannot. If you are going to persuade me to change my mind in Gould, you are going to have to convince me how – and before I ask that: could the State Parliament, without the Commonwealth’s consent, invest the Federal Court with jurisdiction under a State Act?

MR BENNETT: But for section 109, yes. Section 109 would prevent it because ‑ ‑ ‑

McHUGH J: How does 109 prevent it? You have a Federal Court, it just does not say ‑ ‑ ‑

MR BENNETT: Because one would construe the Federal Court Act as defining and determining the jurisdiction of that court, and it would be inconsistent with that for a State to say we are going to define it in a different way by giving it additional powers. But if the Commonwealth gives its consent, then, of course, no question of inconsistency arises.

GUMMOW J: That assumes a field, does it not? It assumes a field for the federal law.

MR BENNETT: No, your Honour.

GUMMOW J: Which is exhaustively covered.

McHUGH J: Would the creation of a court exhaust the jurisdiction of the court? Is that the proposition?

MR BENNETT: No, your Honour. A statute which creates the court – the field is the jurisdiction of the Federal Court. The Commonwealth creates the court and ‑ ‑ ‑

GUMMOW J: But by definition the Commonwealth cannot, itself, occupy this field. You just said that in answer to Justice McHugh.

MR BENNETT: But that does not prevent – well, your Honour, it is a different field.

McHUGH J: How can there be conflict if it is a different field?

MR BENNETT: A field for the purposes of section 109 deals with both what is covered and what is not covered. Where the Commonwealth creates a court and defines ‑ ‑ ‑

GUMMOW J: Section 109 is about concurrent powers.

MR BENNETT: Yes, your Honour.

GUMMOW J: By definition, there are not concurrent powers here.

MR BENNETT: There is a range of Commonwealth powers in relation to what the court does. It would, by setting up a court, and by, for example, creating it and giving it a certain number of judges and a certain amount of work, the Commonwealth has said in a statute, “This court is to do certain things and no others”.

GLEESON CJ: And by giving it a certain amount of money.

MR BENNETT: Yes, your Honour, that is another way it achieves the objective. If a State Parliament then says, “We will confer additional jurisdiction on that court and thereby require it to do what it may not have time to do, and may not have the money to do”, that, in my respectful submission, is inconsistent with the legislation.

GUMMOW J: It is just doing something for which it does not have power; 109 does not have any work to do. State law is simply beyond State power. It is not legislating with respect to a subject in respect to which the Commonwealth itself has power to legislate, so that there can be two laws, one of which conflicts with another.

MR BENNETT: The conflict, your Honour, is not only in the jurisdiction. The conflict is in the spending of the court’s time, the spending of the court’s funds and the activities of the court, and the degree to which those activities fill the available hours of the judges.

McHUGH J: What, as an operational inconsistency, so there is no inconsistency? So, if a judge is sitting there with little to do, he can pick up the State matter?

MR BENNETT: No, your Honour. It the potentiality of the conflict which creates the inconsistency. There does not have to be actual physical inconsistency in each case.

McHUGH J: But it must be. You are relying on Kakariki, are you not, Victoria v The Commonwealth 58 CLR, operational inconsistency?

MR BENNETT: Your Honour, the field is the activities, the day-to-day activities of a court. That field is occupied by the Commonwealth by saying it will be spent on certain Commonwealth matters. If the State comes along and says, “We are going against the Commonwealth’s wishes, or without its consent, to impose additional jurisdiction on the court, albeit jurisdiction which the Commonwealth itself could not impose itself”, that is inconsistent by virtue of the field of the activity of the court.

McHUGH J: It is an extraordinary proposition that the Commonwealth can consent to somebody else conferring jurisdiction on it, although the Commonwealth itself cannot confer jurisdiction. What else does the Commonwealth do by its consent except confer jurisdiction?

MR BENNETT: Your Honour, it ‑ ‑ ‑

McHUGH J: These words are bandied around, “give consent”. What does that mean? It can mean nothing more than “We are conferring State jurisdiction on you, we the Commonwealth”, and that is what they cannot do.

MR BENNETT: Your Honour, in my submission, it is, certainly for more abundant caution there may be an element of saying, for Duncan purposes, if there is anything we have to do, we are doing it, but the wording of the section is, “that the court may exercise the power conferred on it by the State.” That is what the section says.

GAUDRON J: Well, it is not power, it is jurisdiction.

MR BENNETT: The jurisdiction.

GAUDRON J: And that is a different concept; jurisdiction is something which, when vested in a court, has to be exercised, except where the interests of justice otherwise require. Now how can it be that a State could require a Chapter III court to exercise jurisdiction conferred by the State? It would seem to me to go right to the heart of federalism.

GUMMOW J: It is a Cigamatic point in another disguise.

MR BENNETT: Well, your Honour, the answer is the consent.

GAUDRON J: The answer is?

MR BENNETT: The consent.

McHUGH J: Where does it get this power to consent; where does it get this from?

MR BENNETT: From section 51(xxxix).

McHUGH J: But that is execution as a federal judiciary; you are forced to rely on the proposition that Justice Kirby relies on at page 495 in Gould, where he says – this is the only possible way you can deal with it, it seems to me:

The enactment of section 56(2) of the federal Act is sufficiently connected to the power to establish federal courts in section 71 of the Constitution. This is so because it assists in the exercise of the federal judicial power by such courts by eliminating or reducing jurisdictional disputes –

MR BENNETT: Yes, your Honour, that is how one gets the incidental power, but it is the ‑ ‑ ‑

McHUGH J: But you do not need this cross-vesting to exercise federal judicial power or to eliminate disputes; it either has the jurisdiction or it does not.

MR BENNETT: Your Honour, there is a problem.

McHUGH J: This may facilitate some State courts, although I would have thought that in this day and age the big losers out of the cross‑vesting jurisdiction are the State Supreme Courts. Their work is going to the Federal Court.

GAUDRON J: And to that extent it seems to be a surrender of the sovereignty of the States as separate polities which is mandated by the federal nature of the Constitution.

MR BENNETT: It is no more of a surrender than that which the Constitution itself contains.

HAYNE J: But does not the debate identify that there is a third and fundamental premise, namely, that Chapter III does not establish a unitary system of courts? It recognises that it is a federal system.

MR BENNETT: Yes, your Honour.

HAYNE J: The question then is: what follows from that premise? In part it would seem to me that it follows that there is necessarily a division of jurisdiction and, once you have taken that step, how do you paper over the division?

MR BENNETT: We agree with your Honour’s starting premise. I would not dispute that. One then has to define fairly precisely what are the negative implications which flow from Chapter III. Your Honour puts it in terms of a division. There is a division and the division remains, and the division remains notwithstanding that in order to avoid jurisdictional disputes there has been a total cross‑conferring of jurisdiction with a power of remitter. There is in every case a power in the Federal Court or in the converse situation in the State court ‑ ‑ ‑

HAYNE J: That is what has happened. What I am searching for is what you say is the principle which enables you to bridge the division that seems to me to be necessarily implicit in the description of the system as a federal system.

MR BENNETT: The starting point, your Honour, is that with State jurisdiction there is nothing to stop a State conferring its jurisdiction on anyone. It can, for example, as is done in the Cross-vesting Act, confer it on the Supreme Courts of other States and Territories. Under the Cross‑vesting Act, the jurisdiction of the Supreme Court of Tasmania can be exercised by any of the other States Supreme Courts or the other Territory Supreme Courts.

HAYNE J: Let that, for the moment, be assumed, what is the power of reception, if once you have accepted, that the system is a federal system?

MR BENNETT: Well, your Honour, might I just finish answering the first question and then answer that? Because the conclusion of the answer to the first question is that one would also say it was an element of the federal system that there is a separation between States; that Tasmania is separate from Victoria. Yet it would not challenge that separation, we would submit, for the two States, as they have done, to confer the jurisdictions of their Supreme Courts on each others Supreme Courts with a power of remitter. Everyone knows that does not mean in practice that every Tasmanian is going to litigate in Victoria or Darwin, or anywhere else that they are entitled to litigate. It means that in practice, where there are cases on the borderline which have elements of more than one place, and if it is more convenient, the court of the other place will decide it and that is agreed on a mutual basis. So, the mere existence of separation is not inconsistent with a cross-vesting of jurisdiction and ‑ ‑ ‑

GUMMOW J: But the State position is controlled or assisted to some extent by the Australia Act, is it not?

MR BENNETT: Yes, your Honour, it is.

GUMMOW J: Section 2.

MR BENNETT: The validity of the cross‑vesting legislation does not depend on the Australia Act.

GUMMOW J: That is not the point I am trying to make. You were saying the States vis-à-vis States were the same, relevantly, as the States vis-à-vis the Commonwealth. I am saying to you that the States vis-à-vis States, to some measure reflect the position under the Australia Act.

MR BENNETT: Yes.

GUMMOW J: Which is not a federal question in the same way as the question here is.

MR BENNETT: Yes, I understand that, your Honour. But, what I am dealing with is his Honour Justice Hayne’s question to me, which says because there is separation, and because the federal system implies separation, that it is in some way inconsistent with that for one polity to confer jurisdiction over its judicial problems to the other polity.

HAYNE J: My question is if you accept separation, how do you bridge it? By what power, by what principle, do you bridge the separation? As I understand your answer so far, it is the cross‑vesting legislation attempts to. My question is more radical, what is the power or principle?

MR BENNETT: Your Honour, my answer is slightly more fundamental. It is that the need to bridge – there is not necessarily a need to bridge a separation. The Constitution, itself, recognises, for example, a breach of separation, if one likes, the other way; where the Commonwealth can confer federal jurisdiction on State courts. So, in that case it is recognised that notwithstanding the separation there is an express power to confer the jurisdiction.

Now, leaving aside the expressio unius type of argument to which I will come, that demonstrates that there is nothing particularly inconsistent with the concept of the separation of polities in a Federation that the jurisdiction of one should be conferred on the courts of another, and whether it is done by the Constitution or it is done as here by a grant and an acceptance, in my respectful submission, it does not affect that principle.

GLEESON CJ: Mr Solicitor, coming back to this matter of grant an acceptance or consent, could I ask you a question about the language of section 9(2). Those words, “the Federal Court may exercise jurisdiction”, apply to two different subject matters. They apply to jurisdiction conferred on that court by a provision of this Act and jurisdiction conferred on that court by a law of a State relating to cross-vesting. Now, so far we have confined attention to the second of those two matters. What is an example within section 9(2) of the jurisdiction conferred on the Federal Court by a provision of this Act, and what does it mean for the federal Parliament to say the Federal Court may exercise jurisdiction conferred on that court by this Act?

MR BENNETT: This Act, your Honour ‑ ‑ ‑

GLEESON CJ: It is the Jurisdiction of Courts (Cross-vesting) Act 1987.

MR BENNETT: Yes, I have the Act. Section 4(2) is one example, your Honour. I am not sure if that is the only one. Section 5, I think, contains examples, too. Section 4(2) certainly does.

GLEESON CJ: Right, well, now, what is section 9 doing then, when it says the Federal Court may exercise jurisdiction “conferred by this Act”?

MR BENNETT: It is, in substance, the Commonwealth consenting for the purposes of section 109 and indicating ‑ ‑ ‑

GLEESON CJ: No, I am sorry, this is jurisdiction conferred by this Act, the Commonwealth Act.

MR BENNETT: I am sorry, yes ‑ ‑ ‑

McHUGH J: It is not consenting to anything, is it, it is giving a jurisdiction.

MR BENNETT: Well, in relation to section 4(2), it is conferring Territory jurisdiction and in that case operating under section 122. It also arises under section 4(3) and section 5 – no, section 5 does not do it. Section 4(3), certainly, is the clearest and section 4(2) is another one.

GLEESON CJ: Well, then, the first part of, or the first of the two alternatives in section 9(2) is an exercise of power under section 77(i) of the Constitution, is it not? It is a law defining the jurisdiction of the Federal Court.

MR BENNETT: That could only operate as such in relation to the nine heads of power, or under section 122 combined with section 76(ii).

GLEESON CJ: But it is exactly the same words. “The Federal Court may exercise jurisdiction” that are applied to the second of the two alternatives. On your argument, those words have a substantially different character when you come to apply them to the second alternative from that which they bear in relation to the first alternative.

MR BENNETT: It does have a different effect, yes, your Honour, necessarily. The draftsman has adopted a shorthand. He has used, if one likes, a Cigamatic approach to it, but the effect is quite different of the two parts of the section.

McHUGH J: When the Federal Court enforces a judgment under section 73 in respect of this cross‑vested jurisdiction, who has conferred the authority to enforce the judgment?

MR BENNETT: Your Honour, it is done as the Federal Court. The Commonwealth has, because the ‑ ‑ ‑

McHUGH J: So the Commonwealth has passed a law authorising its court to enforce State jurisdiction?

MR BENNETT: Yes, your Honour.

McHUGH J: How do you reconcile that?

MR BENNETT: The reason for that is, the doctrine of the Electric Power Case which says that when jurisdiction is conferred on a court, one takes that court with all its procedural attributes, with all its rights of appeal and with all its other matters. The States take the Federal Court as they find it, as a Federal Court, with the various pieces of federal apparatus attached to it.

GUMMOW J: The question is how the litigant takes it; that is what is being asked.

MR BENNETT: He or she takes it the same way.

GUMMOW J: The litigant is on the wrong end of this federal order. The litigant asked by what authority has this happened.

McHUGH J: Federal Parliament or State Parliament? If I breach the order and they want to commit me for contempt, what is the source of the authority to commit me for contempt for breaching the order?

MR BENNETT: The Federal Court Act.

McHUGH J: No, federal Parliament or New South Wales Parliament?

MR BENNETT: No, the ultimate authority there is the federal Parliament, because it passed a Federal Court Act.

McHUGH J: Well, it is pretty difficult to reconcile this with In re Judiciary, is it not?

MR BENNETT: No, your Honour, because the Act and the Rules are necessarily laws of the Commonwealth. The application to the State flows from the State legislation combined with the Commonwealth’s consent to it deciding certain matters but, as in the Nauru Case, there is a consent by the one and a conferral by the other.

McHUGH J: But you are saying that the federal Parliament has authorised the Federal Court to exercise judicial but not federal judicial power.

MR BENNETT: Yes, your Honour.

McHUGH J: Well, how can you maintain that proposition in the face of In re Judiciary?

MR BENNETT: Well, your Honour, because – that involves the next step in the argument – the Re Judiciary and Navigation Acts involved a series of propositions which can be put in the form of a sorites.

GLEESON CJ: Mr Bennett, would it be convenient for you to keep this for tomorrow morning?

MR BENNETT: Yes, certainly, your Honour.

GLEESON CJ: Then we will adjourn until 10 o’clock in the morning.

AT 4.17 PM THE MATTER WAS ADJOURNED
UNTIL WEDNESDAY, 2 DECEMBER 1998

[1998] HCATrans 435

Key Legal Topics

Areas of Law

Constitutional Law

Administrative Law

Civil Procedure

Legal Concepts

Jurisdiction

Standing

Judicial Review

Procedural Fairness

Abuse of Process

Res Judicata