Zurich Insurance Company Ltd & Anor v Koper & Anor

[2023] HCATrans 42

[2023] HCATrans 042

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S147 of 2022

B e t w e e n -

ZURICH INSURANCE COMPANY LTD

First Appellant

ASPEN INSURANCE UK LIMITED

Second Appellant

and

DARIUSZ KOPER

First Respondent

ATTORNEY GENERAL OF THE COMMONWEALTH

Second Respondent

KIEFEL CJ
GAGELER J
GORDON J
EDELMAN J
STEWARD J
GLEESON J
JAGOT J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 13 APRIL 2023, AT 10.00 AM

Copyright in the High Court of Australia

____________________

MR B.W. WALKER, SC:   May I please the Court, I appear with my learned friend MR G.E.S. NG for the appellants.  (instructed by Wotton + Kearney)

MR N.C. HUTLEY, SC:   If the Court pleases, I appear with my learned friends MS M.F. CARISTO and MR B.A. O’CONNOR for the first respondent.  (instructed by Piper Alderman)

MR S.P. DONAGHUE, KC, Solicitor‑General of the Commonwealth of Australia: May it please the Court, I appear with MR B.K. LIM and MR J.G. WHERRETT for the second respondent.  (instructed by the Australian Government Solicitor)

KIEFEL CJ:   Yes, Mr Walker.

MR WALKER:   Your Honours, at the outset, I hope you have got some short minutes conveying the consent of the parties to the amendment of the name of the first appellant.

KIEFEL CJ:   Yes, we have received that.

MR WALKER:   Thank you, your Honour.

KIEFEL CJ:   There will be orders accordingly.

MR WALKER:   May it please the Court.  Your Honours, as you have seen from the exchanged written submissions and outlines, this is a case which – not for the first time in this Court – raises apparently definitional questions about the concept and nomenclature of jurisdiction.

It is actually not, we respectfully submit, going to turn on semantics or on choosing in an unprincipled way between the well‑known multiple meanings that word can bear in context, but rather, in our submission, concerning the structure and scheme of the Constitution in the allocation and limitation of Commonwealth legislative power with respect to the exercise of State judicial power.

There are certainly jurisdictional matters to which we will come in our argument, as you have read in the writing.  But, at the end of the day, this is a case about whether a Commonwealth statute could be called in aid for the exigency that arose as a result of the following framework of the dispute.

The original dispute, if I can call it that, concerns defective construction work in Auckland in New Zealand.  And the dispute was between, effectively and sufficiently accurately as a generalisation for this argument, New Zealand complainants with a grievance against a New Zealand builder who had a non-Australian insurance cover against such liability.  There have, in fact, been proceedings successfully completed in New Zealand advancing that grievance and resulting in judgment, not all of which has been satisfied, including against the corporation that I will simply call our insured.  We are the insurers against whom that insured would have a claim on the policy.

That insurance dispute, however, is not a dispute which has played any part in the framework of this case.  That is because there was resort had in the proceedings as they were ultimately mounted in the Supreme Court of New South Wales to a New South Wales legislative expedient with which your Honours are very familiar in its latest iteration.  It appears as the possibility of proceedings under section 4, pursuant to leave under section 5, both provisions being of the Civil Liability (Third Party Claims Against Insurers) Act 2017.

It is not contested in this case, and at this stage in the dispute between the parties before you today, it is not contested, that the effect of those provisions was that there could not be action brought in New South Wales against our clients as such insurers unless there could have been a case brought against our insured in New South Wales.

GORDON J:   Can I ask a question about that?

MR WALKER:   Yes, your Honour.

GORDON J:   It is apparent from reading the decision of the primary judge that he addressed it up until paragraph 70 by reference to what might be called the direct route without reference to this idea of a notional proceeding.

MR WALKER:   Yes.

GORDON J:   That is, he identified the hinge, in that case, on a proper construction of section 4, not to require the identification of a notional proceeding.  He said, I can look at it and I can see that I have got an Australian insurance policy, insures here, in Australia, Australian insurance policy because the exclusive jurisdiction clause is Australia.  The insurers are here in Australia and capable of servicing Australia and the like.  That argument, the primary judge said, is my preferred choice, but I am going to put it one side for the moment because of the interaction between section 4 and the decision in Chubb.

MR WALKER:   That is right.  Your Honour has, with great respect, described the way in which the issue before you today arises on the basis of how his Honour decided the significance of the statute which is in question, the federal statute in question.

GORDON J:   I, for my part, would at least like someone to explain to me how it is that that section 4 – on the construction of section 4, an interaction with Chubb is right.

EDELMAN J:   In other words, why is not Zurich a necessary and proper party for proceedings against Aspen, under the UCCPR Schedule 6?

MR WALKER:   Providing a connecting link, your Honours.  Your Honours, may I ‑ ‑ ‑

GORDON J:   And at an appropriate point – not now, Mr Walker, it is just I, for my part, I am just having difficulties understanding on a proper construction of section 4.

MR WALKER:   Well, now, your Honour, we are here because of the way in which his Honour at first instance actually decided the case.  And then those issues identified, refined and argued, and decided in the Court of Appeal, all of which are premised on the irrelevance to the decision between the parties as his Honour at first instance saw them and decided them, of the important – the fundamental issues that your Honour has raised.  Yes, they are fundamental, that is the starting point of the inquiry as to whether there is anything in the issue which brings us to this Court and which was determined against us in the Court of Appeal and was the way in which it was determined at first instance.

KIEFEL CJ:   In the Court of Appeal, no party sought to support the primary judge’s decision on that basis.

MR WALKER:   So, it was not a contention point.  Now, could it have been?  Yes.  But because it so plainly could have been, and was not, there is a live issue.  There is nothing moot about what brings us here.  And the fact that there is a notice of contention point that may have been raised but was not ‑ ‑ ‑

GORDON J:   I do not know if it is a notice of contention point.  It is a question of the way in which you construe section 4 read with section 12.

MR WALKER:   Your Honour, with great respect, yes, but it is a notice of contention point in that it would produce the same outcome ‑ ‑ ‑

GORDON J:   I understand.

MR WALKER:   ‑ ‑ ‑ but by a radically different route.

EDELMAN J:   Although it may not be entirely independent of the argument that you are raising at the moment, because in a very simplified form one of the concerns that you are raising, which is effectively about the ability for the Commonwealth to expand State jurisdiction ‑ ‑ ‑

MR WALKER:   So long as I can flag the word “jurisdiction” with neon lights at that point, yes.

EDELMAN J:   Yes, with all the issues about dimensions and so on, there would be no expansion if there already is State jurisdiction, in inverted commas, to do this.

MR WALKER:   Yes, but that actually highlights that that is a contention point.  It is not a contention point in this Court.  It could not have been, bearing in mind it was not it was not a contention point in the Court of Appeal.

EDELMAN J:   But it may not be a contention point if it is actually a step in your very argument. It is a step that one must encounter in deciding what it is that the Commonwealth TTPA has actually done to State jurisdiction. One needs to look at what the State jurisdiction actually is.

MR WALKER:   I entirely accept that.  Can I try to frame it in this fashion?  The Trans‑Tasman Proceedings Act 2010, as your Honours know, was held at first instance to be the means by which there could be an affirmative answer to what his Honour had held to be a prerequisite of the proceedings in New South Wales in which leave was sought; namely, that a case against the insured – the notional case against the insured – would be one that could be decided in the sense of adjudicated in binding fashion by the New South Wales court. Now, those are phrases by which I seek to spell out the sense in which the various meanings of jurisdiction as deployed in the argument.

Or to put it another way, using more traditional language, that it was by the TTPA – so it has been held against us in the courts below – that the territorial jurisdiction or the personal jurisdiction to bind, notionally, in those notional proceedings our insured to the New South Wales adjudication, could be made out.  That is the way that is the way in which the case was decided, both at first instance and in the court below, and without any notice of contention which would render unnecessary that on the basis that the direct affirmative to the question, could the New South Wales court bind the insured, the answer would be by reference to what I am going to call orthodoxy connecting factors and a reading of the Civil Claims Act, in such a way that that supplied the affirmative answer without the need ever to resort to the TTPA for that notional proceeding – because that is the key point. 

Now, your Honours, it is for those reasons that I am bound to say that, conscious as I am of the issues involved in that missing contention point, we, with respect, if special leave were somehow expanded so as to include the need for us to address that point – notwithstanding it is not being taken against us in the Court below – then it is certainly doubtful whether we could complete our argument on that today.  It is an argument which, on our analysis, would render quite unnecessary the whole of the analysis that we seek to persuade the Court is the appropriate one concerning the TTPA itself.  Because as your Honours know, the issue as we present it here is one which seeks to answer the affirmative to the question, could the insured have been sued in New South Wales, by saying that the only source of that affirmative answer, being the TTPA, if we can invalidate that effect of TTPA, then the affirmative answer is displaced and we cannot be sued so that leave cannot be granted and we, the insurer, what I will call the New South Wales legislative cutthroat. 

So, everything that we are presenting is posited on, as I say, the non‑presence in this dispute of that potential but never actual contention point.  I am obviously in your Honours’ hands.  I frankly would prefer not to embark, in particular, upon a proper exploration of Chubb without that having been the subject of a written submission.

KIEFEL CJ:   Mr Hutley, do you wish to say anything in relation to whether or not the grounds for special leave should effectively be expended or a notice of contention filed at this point?  You do not seek to argue?

MR HUTLEY:   We were content with the construction of the, in effect, New South Wales Act to the effect that one had to be able to bring, as it were, the underlying proceeding as between my clients and the insured, not attached to the insurance policy, to engage the legislation.  That was the effect of the construction.  We accepted that construction.  We did not contend against it.

That construction, if correct, threw up the point which is laid before your Honours.  We do not seek to depart from that construction but, then again – and it was a construction which our learned friends advocated before the trial judge contrary to the position we took, and they were successful.  That is why, of course, they did not challenge it in the Court of Appeal, and the matter proceeded upon that basis.  That is where it is before your Honours.

EDELMAN J:   Do you say anything about whether the point is truly independent?  So, whether this ‑ ‑ ‑

MR HUTLEY:   If one assumes the construction of the New South Wales Act, then the points do become independent.  If you assume a contrary construction of the New South Wales Act, of course, then the point which, with respect, your Honour adverted to as to whether this is, quote, any in point of fact extension of jurisdiction, it would still leave the question of whether our learned friends issue as to the scope of the federal Act, but there may lead to a question of reading it down if it overreached in the way that our learned friends indicate.  But those are not before you, because of the construction adopted by his Honour and not – and, which I say, was advocated by our learned friends and not challenged by us.

KIEFEL CJ:   Yes.

MR HUTLEY:   If that answers your Honour’s question.

KIEFEL CJ:   Unless there is anything further you wish to add, Mr Walker, the Court will adjourn briefly to consider the course that it will take.

MR WALKER:   Could I just make this one observation – and I think it is in qualification of an assent I expressed to a proposition raised with me by Justice Edelman.  It is to be recalled that there are, as it were, two New South Wales proceedings.  One is actual, in which one can posset perhaps parties properly joined, et cetera.  The other is notional, which is simply the case against the builder insured, which is quite different.  Thank you, your Honour.

KIEFEL CJ:   The Court will adjourn briefly to consider the course that it will take.

AT 10.19 AM SHORT ADJOURNMENT

UPON RESUMING AT 10.21 AM:

KIEFEL CJ:   The appeal will proceed upon the issues joined between the parties.

MR WALKER:   May it please the Court.  Your Honours, it is in that framework that I have tried to explain that the validity of the relevant provisions of the TTPA becomes the dispositive issue.  To remind your Honours, you will find in the book of authorities at page 230 the text of the critical provisions of that statute, sections 9 and 10.  I do not need to dwell on them, except to note for emphasis what the written submissions place to forefront; namely, the stipulation in section 10 that service under section 9 in New Zealand:

(a)has the same effect; and

(b)gives rise to the same proceeding;

as if the initiating document had been served in the place of issue.

And to put it in a nutshell, in particular with respect to the Commonwealth’s actual contention in this Court, that is their alternative approach.  Those are phrases which, we say, entails examination as to whether, in the comparison between the proceedings in which there has been section 9 service and the notional or hypothetical proceeding but with service in the place of issue, the character of the substantive or subject matter jurisdiction, the authority to decide, and the rules of decision making, being federal or not, is a question of characterisation which will defeat the required similarity that section 10 prescribes.  It will not be the same proceeding if served in New South Wales, it would be State jurisdiction, but served under section 9 it would be federal jurisdiction.  And that is cutting, as I say, right to the end of the case as part of our answer to the Commonwealth alternative argument raised by its notice of contention.

Now, against that background, could I then remind your Honours that the reasoning is found in the Chief Justice’s reasons in the core appeal book starting, relevantly, at passages I wanted to highlight, at page 176, and may I simply indicate those passages which in particular are the subject, then, of the propositions found in our outline upon which I will proceed.

Paragraph 38 is one of those paragraphs which attracts from us the responsive argument to refute it that notes the differences between concepts which are various in their content but may from time to time all be described by the word “jurisdiction” and, in our submission, the reasoning that the Chief Justice in paragraph 38 in particular employs in order, as it were, to turn Chief Justice Gleeson’s negative implication from Chapter III in Ruhani against us is one which, in our submission, neglects to observe the critical distinction between the kind of jurisdiction the Chief Justice was referring to there and the territorial or personal jurisdiction concept quite distinct and anterior, which is the subject in particular of the possible legislation under 51(xxiv).

That, of course, as your Honours appreciate, raises the proper reading and learning to be gained from Flaherty v Girgis, to which I will be turning soon.  In paragraph 42, in a staging place of his Honour’s reasons, the Chief Justice below attributes to us what he calls, at one point:

some form of an expressio unius principle –

or using different language, I think to the same end, the notion of one provision abstracting from another.  In our submission, that is, first of all, not a complete or accurate understanding of the argument we put but, in any event, that is not a vice which, in our submission, our argument displays for reasons that I will develop.  In short, it is the reading together in a scheme concerning, in particular, judicial power, both Commonwealth and State, of the provisions to which we direct attention rather than any illicit abstracting beyond the capacity of the words of the Constitution to do so.

In paragraph 45, that fallacy, in our submission, is continued and your Honours appreciate that, as you have seen in our written submission, as I will develop, it is simply not an essential premise.  It is not a premise at all of our argument concerning the so‑called vesting or conferral, if those words could ever sensibly be used, of so called personal jurisdiction, if by that it is meant the jurisdiction which is achieved by extraterritorial service, that is, service out.

In paragraph 46, the first sentence by the Chief Justice is one which, as your Honours would expect, we enthusiastically endorse.  But the multiple meanings are meanings which, in our submission, fall to be analysed as we have done, rather than, with respect, the conclusion to which his Honour came, which can perhaps in paragraph 52 be most obviously displayed by the first sentence, which we most robustly contest.

Whatever is meant by the expression “a constitutional concept” matters of personal – sometimes called territorial jurisdiction – and, in particular, in the context of the jurisdiction which is obtained by service out of the jurisdiction – extraterritorial, it is sometimes called – it is most certainly a concept which is within the purview of the Constitution.  It could hardly be said that the service of process within the meaning of 51(xxiv) is not a subject matter which could fairly be described – if perhaps, a little grandly – as a constitutional concept by reason of it being, explicitly, part of the subject matter of that head of legislative power.

So, those are the, as it were, highlights in what, I accept, is an argument, all of which needs to be read in order to appreciate his Honour’s reasoning to which we now turn as follows, in accordance with the outline your Honours have.  In proposition 2 and in proposition 3 we start with the, in our submission, uncontroversial point that in order for there to be an exercise of judicial power, there has to be, to a tolerable degree, the finality that comes from a binding determination.  This is not a case which involves any concerns about enforceability and what our qualifications upon it might say about either finality or binding effect.

But the fact that one can subject a person to the power – the power of the polis expressed through exercise of judicial power is, obviously, what distinguishes on the one hand between mere advice or suggestion and, on the other hand, to an order or judgment.

KIEFEL CJ:   But one could take it a step earlier, could one not, Mr Walker?  The service of process is a prerequisite to the process of determination commencing.

MR WALKER:   Yes, your Honour anticipates me, and so those are steps anterior to binding effect which are essential to binding effect.  It is, in our system, the means by which persons outside the jurisdiction can be subjected to an exercise of judicial power with the relevant binding effect in exactly the same consequence so far as outcome is concerned, as would be suffered by a person within the jurisdiction, in the Laurie v Carroll sense of them having service effected upon them within the territory governed by the polity whose judicial power is in question.

Now, at that point we note that one sense, different sense, in which jurisdiction might be used – traditional usage, personal jurisdiction or territorial jurisdiction often really meaning extraterritorial jurisdiction – is that it describes the reach, including in a strictly geographical sense, but actually directed to individuals, depending upon their physical location, or corporations, persons, the reach of the exercise of that judicial power is an essential feature, a significant feature, of a description of the court in question, as it is called into action in a particular proceeding.

EDELMAN J:   It is really just a dimension of jurisdiction, is it not?

MR WALKER:   Yes.

EDELMAN J:   Jurisdiction is the combination of all dimensions that gives the court authority to decide.

MR WALKER:   Yes.  Yes, it is.  Now, other phrases that are sometimes used to contrast but are really simply describing other dimensions or aspects of that one notion is substantive jurisdiction, which is usually treated more or less indifferently from the expression subject matter jurisdiction.  That will sometimes be expressed overtly in terms of describing persons within the purview of the judicial power in question.  But even more frequently, it gives the rules for deciding disputes between persons with certain characteristics or who have engaged in certain conduct.

It is significant, in our submission, as we note in our proposition 3, that with courts of so-called unlimited jurisdiction like the State Supreme Courts, this is a very, that is, the extraterritorial reach, the reach to affect a person who is not served within the jurisdiction is a very important aspect of the activities and status of its outcomes for such courts.  It is not a mere detail; it is a critical and fundamental element in the particular purported exercise of judicial power.

Now, in proposition 4 we take the, we submit, logical step of saying it follows from what we have just put, propositions 2 and 3, that it is not only by the investing or conferring of jurisdiction in the substantive sense that the reach of judicial power can be affected by competent legislation.  And so that point, that the first of the essential references to Flaherty v Girgis (1987) 162 CLR 574 is significant. I appreciate how familiar your Honours are with this passage, but may I, for the sake of efficiency, try at once to draw to attention parts of the well-known passage in the majority reasoning upon which, as you have seen in our written argument, we importantly rely.

One sees the unsuccessful contention recorded following the statements in the middle of page 596.  Just in the middle of that page, at the end of the first paragraph, their Honours describe the then form of the Service and Execution of Process Act, enacted under 51(xxiv), of course:

in relation to the extraterritorial service of civil process –

As being what they call “essentially enabling”:

the adoption of its procedures has no other significant result than to render service out of the jurisdiction valid, in circumstances in which it might otherwise be legally ineffective.  Thereafter –

And this presage is what follows in the next few pages:

the consequences flow, not from the federal Act –

Meaning SEPA:

but from the law of the place out of which services is effected.

Meaning the substantive jurisdiction.  And then, the contrary argument, that failed, is noted, namely that:

The different consequences, it was said, arise from the fact that in an action commenced by service under the federal Act the jurisdiction exercised by a State court to determine the matter will be federal jurisdiction –

And their Honours go on the note aspects of that and the matter then, if I could pick it up at the foot of page 597, in responding to arguments based upon Gosper v Sawyer, they say:

The jurisdiction which is exercised in granting or refusing leave to proceed under the federal Act is clearly federal; it could be no other.  But their Honours were not intending to suggest that –

That means their Honours in Gosper v Sawyer:

were not intending to suggest that leave having been granted and service having been effected –

That is, as it were, the first stage, or anterior step:

any jurisdiction to be thereafter exercised by the Commission would be federal.  The question to be determined in Gosper v. Sawyer was whether the process of the Commission might be served out of New South Wales and in Victoria.  In relation to the Service and Execution of Process Act the issue was  . . . “whether the application  . . . if served upon the appellants in Victoria in accordance with the formal requirements of the Service and Execution of Process Act 1901 (Cth), is one in respect of which the Commission could order, pursuant to the provisions of that Act, that Mr. Sawyer be at liberty to proceed”.

And then there is a cutting back of the dicta upon which Mr Handley had relied.  The comment made by the majority about the exercise of federal jurisdiction did not extend beyond that point, and that means the point in the stage or progress of proceedings up to the granting of leave to proceed pursuant to SEPA.  And then their Honours turned to what might be called fundamental matters concerning this multiple-meaning concept of jurisdiction by turning to Laurie v Carroll:

where an action is in personam and transitory, the jurisdiction of a court of unlimited jurisdiction does not depend upon subject-matter but upon the amenability of the defendant to the writ expressing the Sovereign’s command.  At common law the writ does not run beyond the limits of the State.  If extraterritorial service is permitted the territorial jurisdiction of the court is extended.

Hence that expression:

But there is a distinction to be drawn between territorial jurisdiction and jurisdiction over the subject‑matter of the action, the latter being determined otherwise than by the rules governing service.

Recognised, they said, in the then‑section 13 of the then‑SEPA ‑ ‑ ‑

KIEFEL CJ:   That statement is not unimportant, is it not, in the scheme of things?

MR WALKER:   All of this is, in our submission, important.

KIEFEL CJ:   Yes.

MR WALKER:   Where this goes for the purposes of our argument is to make clear that the jurisdiction of the substantive kind in the notional action against the New Zealand builder by the owner with the grievance in New South Wales is a jurisdiction which is New South Wales’ jurisdiction, not federal.  That is a step in our argument concerning constitutional limit on the power of the Commonwealth through the TTPA to expand the reach of the New South Wales Court in relation to the exercise of that substantive or subject matter jurisdiction.

KIEFEL CJ:   When you say the reach of the Court, do you mean the extension of its territory ‑ ‑ ‑

MR WALKER:   Territorial jurisdiction, yes.

KIEFEL CJ:   ‑ ‑ ‑ to give jurisdiction over the person?

MR WALKER:   Yes, so ‑ ‑ ‑

KIEFEL CJ:   So, you have not got to authority to decide yet?  You have got jurisdiction over the person?

MR WALKER:   Yes.  That is right.  But the authority to decide is State authority in the notional proceeding ‑ ‑ ‑

KIEFEL CJ:   Yes, but there is no federal jurisdiction given by the fact of service – you do not dispute that.

MR WALKER:   That is right.  We embrace it.  There is no federal jurisdiction given by these provisions.  We have to return to that, maybe mostly in reply, concerning the Commonwealth’s contention, but what we get from this paragraph is that the step there regulated by SEPA is not a step which renders the subject matter or substantive jurisdiction federal – notwithstanding SEPA is, of course, legislation of the Commonwealth.  Then, in an important explanation, their Honours use what might be called the staged theory:

Whilst the determination of any question under the Service and Execution of Process Act regarding service involves the exercise of federal jurisdiction, jurisdiction over the subject‑matter of the action, once service has validly been effected, derives from the same source whether or not the service is extraterritorial –

which, with respect, is both correct and compellingly so:

It is only if the authority of the court to decide the matter, questions of service apart –

that means, again, authority to decide in the substantive or the subject matter sense:

is derived from federal law that it will be exercising federal jurisdiction . . . Section 51(xxiv) . . . envisages an extension in the reach of the process –

and your Honours have seen how we use language borrowed from that phrase throughout our argument.  So, it extends the reach and, as your Honours appreciate, we say that is an important, and not an unimportant, aspect of the exercise of State judicial power, that is, its reach.

EDELMAN J:   Is your argument a symmetrical one?  In other words, do you say that just as there is no power for the Commonwealth Parliament to extend the reach or the dimension of jurisdiction that would reach, in terms of personal jurisdiction, there would also be no power to contract that dimension – even apart from Melbourne Corporation?

MR WALKER:   Yes.  And, of course, all of this is then subject to the provisions in Chapter III, to which I am going to come, which qualify that kind of proposition, which is not a Melbourne Corporation proposition.

EDELMAN J:   So, it would mean, for example, that if – and I realise that we are not going there – but if Chubb were wrong or put to one side, so that there was a State jurisdiction or State dimension of jurisdiction to extend the personal service to New Zealand independently of a notional proceeding, then the Commonwealth would not have power under the External Affairs Act to contract that jurisdiction.

MR WALKER:   Yes, that is right.  The one word that covers all of that is to alter, meaning to determine differently.  Now, propositions 5 and 6 ‑ ‑ ‑ 

GORDON J:   Just before you come to limb 4, could I ask a question?  In Flaherty, in the middle of page 598, there was reference to and construction of, in effect, the terms of section 13 of the SEPA Act which, I think, provided the element of the foundation for the argument or the acceptance that followed.  That is that the Act itself, in terms, did not do what was suggested.

MR WALKER:   No, that is right.

GORDON J:    Do you propose to address that in relation to the TTPA as well?

MR WALKER:  I think in a sense we do, yes.  We differ respectfully from our friends concerning the character and operation of sections 9 and 10.  May I come to that in due course, your Honour?

GORDON J:   Yes, please.  Thank you.

MR WALKER:   I think that is an answer to your Honour’s question.

GORDON J:   Thank you.

MR WALKER:   I do not model it on the way in which the former section 13 of the former SEPA was handled in Flaherty.

GORDON J:  No, no.  It is an analogy argument.

MR WALKER:   Yes, your Honour.  So, propositions 5 and 6 then we now arrive at.  As I have already mostly said in response to Justice Edelman, yes, we say what is in question in this case is the capacity under the external affairs power – it must be, 51(xxix) – for TTPA to extend – and it could be as well, contract, that is, to alter or determine differently from the way it is presently or formerly determined – the reach, in the sense of territorial jurisdiction, sometimes focused by the language of personal jurisdiction, effected by service out of a substantive jurisdiction, authority to decide, which is State, not Commonwealth, which is not federal.  And that is the issue in the case, and it is obvious immediately as we turn in our proposition 7 to note that the general proposition that we essay in our proposition 6 must immediately be affected very greatly but tellingly in specific terms by the very important terms of 51(xxiv).

As your Honours know, we seek to persuade your Honours that the form of 51(xxiv) is a stipulation which provides limits, and that is a familiar attribute of the placita in section 51. In other words, they describe legislative competence and the lawfulness of a purported exercise of that competence. The validity of legislation impugned in this Court turns upon observance first by identification and description and then by enforcement of limits. That is another way of saying the power goes no further than that which is stipulated. It is not a matter of there being, as it were, conditions. It is simply a description of the zone of legislative competence conveyed by the connective “with respect to” at the top of section 51, and all, of course, subject to the Constitution as also stated at the beginning of section 51.

Now, 51(xxiv) speaks indifferently, or generally, or comprehensively, of “the courts of the States” with respect to their process and judgments.  And because we know – and this is subject to the Constitution – that the courts of the State may come to exercise federal jurisdiction pursuant, say, to 77(iii), it is clear – it could not be otherwise – that (xxiv) comprehends all manner of substantive or subject matter jurisdiction of the courts of the States.  Some will be Supreme Courts of so‑called unlimited jurisdiction, some will be much more circumscribed.

But (xxiv) has the effect that the Commonwealth Parliament, without infringing the federal structure, has the legislative competence of what might be called a nation‑building purpose within the Commonwealth, and when I say within, I mean the phrase “throughout the Commonwealth” provides a kind of limit which is territorial, or to put it another way, the extraterritoriality which (xxiv) most usefully achieves as a subject matter of Commonwealth regulation is extraterritoriality as between the political boundaries within the Commonwealth, not extraterritorially outside the Commonwealth.

It is at that point that one notes, as we have in our proposition 7(b), that that does not stand alone as means by which the Commonwealth Parliament can affect or alter the jurisdiction – in all senses of the word that I have used so far – of State courts, because, as your Honours know, in the allocation of jurisdiction, which is partly done directly by the Constitution, but mostly is to be done pursuant to laws made under Chapter III, 77(ii) specifically accords to the Commonwealth a power to make laws defining the extent to which the jurisdiction of any federal court – it can be safely said that is federal jurisdiction – shall be exclusive of that belongs to or is invested in the courts of the States.

Quite leaving aside, at the moment, matters that will be determined by section 109, one, therefore, sees that there is a carefully‑expressed legislative power with respect to what might be called the extent of jurisdiction. In our submission, the notion of defining the extent of exclusive federal court jurisdiction as against State courts is one which can be done in any way that seems appropriate to the Commonwealth Parliament. Section 77(ii), we respectfully submit, has to be noted, therefore, as an important qualification on what I will call our proposition 6, but not one which either weakens it or the argument for which we ultimately contend.

We then move, most importantly, to 77(iii), which, of course, is the source of the power, the exercise of which is said to be our autochthonous expedient.  So, there is Commonwealth power, as you might imagine, symmetrically, in a political and federal sense, focused only on federal jurisdiction to enlist or conscript the courts of the State, in the old cliché, apparently, at least, to some extent, to be taken as they are with federal jurisdiction.  For what it is worth, as your Honours have noticed, in our written submission, we accept – as the Chief Justice observed below, we accept the language of:

investing any court . . . with federal jurisdiction.

is either solely directed towards or is, most obviously, to be understood as referring to so‑called substantive or subject matter jurisdiction.  But, that, in itself, is neither here nor there for our argument.  What matters, in our submission, is that 77(iii) is, of course, in the structure of all the provisions in play – that is, the Constitution as a whole – 77(iii) is the reason why, with great respect, Chief Justice Gleeson in Ruhani saw a so‑called “negative implication”.  The powers to invest State courts with federal jurisdiction are given but also limited by the terms of section 77.  In particular, that is because subject matter being the object of this, that investing under 77(iii) is:

With respect to any of the matters mentioned in the last two sections –

being sections 75 and 76.  Now, true it is that 76(ii) plays, as it were, the primary role in terms of what might be called the bulk of designated heads of substantive jurisdiction, as the history of the country shows, but in our submission, that again shows that there is schematically a distinction between the power to invest courts of a State with federal jurisdiction in 77(iii) and the different notion of that subject matter which provides the limit of that power in 76(ii).  Or, to put it another way, one cannot have a law which does not answer the description of 77(iii) that, according to this scheme, can nonetheless see a vesting by the Commonwealth Parliament of a State court with federal jurisdiction.  In our submission, there is nothing unorthodox or startling about any of that.

Can I then move to elaborate the comment we make in proposition 7(c).  Obviously enough, the investing of jurisdiction and apart from 51(xxiv) can, with the aid, importantly, of 51(xxxix), incidental in the sense of an essential attribute – not an inessential but an essential one – can obviously empower the Commonwealth to make laws concerning, among other things, extraterritorial service.  Laws which would affect not substantive or subject matter jurisdiction of such a State court, but, rather, the personal or territorial jurisdiction of that court. 

It is, in our submission, of the very essence of the Commonwealth’s responsibility for the investiture and regulation of the exercise of federal jurisdiction, including by State courts, that naturally enough, with respect to federal jurisdiction, that will include – without necessarily needing to have recourse to external affairs, but it can be called in aid as well – service outside the levels of the Commonwealth.  In other words, beyond the limits contemplated by 51(xxiv). 

But, of course, as your Honours appreciate, the effect of that reasoning, if it is correct, as we urge, is that there cannot be a departure from the limits imposed by the expression of 51(xxiv) except for federal jurisdiction.  That is why it is important, in our submission, drawing from Flaherty v Girgis, to note that in this case the notional proceeding by a disgruntled owner against an allegedly negligent builder – our insured – is a proceeding in which the hypothesis requires that not to be federal jurisdiction or, at least, clearly not federal jurisdiction by reason of any federal regulation of service out.

As Flaherty v Girgis says, that federal character is confined to questions of service, not to the exercise of the authority to decide thereafter.  It is for those reasons, in our submission, that one is brought back.  And satisfyingly, on a symmetrical view of the allocation of powers concerning the exercise of the various kinds of judicial power – that is, relevantly, State and Commonwealth – within the Constitution, that there is not a freestanding capacity of the Commonwealth to regulate, alter – that is, increase or decrease – the so‑called personal or territorial jurisdiction of State courts exercising State judicial power.  That is an attribute of the Commonwealth’s political position which is available only for federal jurisdiction.

GAGELER J:   It is a pretty odd constitutional scheme that would give the Commonwealth Parliament power to regulate State service throughout the Commonwealth – throughout the territory of the Commonwealth.

MR WALKER:   Yes.

GAGELER J:   But then say it is completely off limits in State jurisdiction for the Commonwealth Parliament to say anything about service outside the country.  I just do not understand, Mr Walker, how you can read these provisions in that way.

MR WALKER:   Your Honour asked me to respond, with opening words it would be “pretty odd”.  I have to tackle that directly.  It is not odd, we submit, for the following reasons.  I apologise if I am going to repeat things I have said.  First of all, as we try to persuade the Court through the development of our proposition 6, there is nothing odd about allocating legislative power with respect to the exercise of judicial power fairly studiously to the polity whose judicial power is in question.  Second, in the new Federation – which was inheriting from the self‑governing colonies courts of so‑called unlimited jurisdiction among many other things – the choice was made to leave those State court systems, as they became, in place for the autochthonous expedient.  They were not taken over as from now on creatures of the Commonwealth.

There are qualifications that have been made to that, not the least of which is Sir Maurice Byers’ contribution through Kable.  But that is not a qualification which, to any degree, deflects from the structural and satisfying concept that the polity whose court it is, is the polity to whom one looks for questions of jurisdiction.  Then, because these formally self‑governing and mutually‑jealous colonies were now to be federated in one nation, clearly enough, something like 51(xxiv) within that one nation became obviously expedient to the point of a crying necessity – at one with the abolition of customs and the like.

KIEFEL CJ:   You speak of necessity, but what Justice Gageler pointed out is really a logical extension, is it not?  If it is all right to serve within the Commonwealth and given that you can see that the external affairs power can authorise service, it just seems a logical extension of what was said ‑ ‑ ‑

MR WALKER:   I accept I have to ‑ ‑ ‑

KIEFEL CJ:   ‑ ‑ ‑ in Flaherty v Girgis.

MR WALKER:   But there is a difference between logical necessity and ‑ ‑ ‑

KIEFEL CJ:   Logical extension, I said, not necessity.

MR WALKER:   Yes.  And our point is this:  that this is not a constitution that hands to the Commonwealth, we submit – given the provisions we focused on – the renovation and refurbishment from time to time of the State courts to serve, in particular, as actors in international commerce.  The States can do it.  So, if the exercise, I stress, of State judicial power is in question, then those States who wish to stretch their legs beyond our orders can obviously, as they have, exercise the powers to expand the common law territoriality to a legislated or otherwise provided extraterritoriality.

KIEFEL CJ:   But accepting the external affairs power can extend to New Zealand on this subject matter, you must be speaking of a limitation.  The limitation is derived from Chapter III, and it is put against you that Chapter III is speaking on a different subject.

MR WALKER:   I am not quite sure whether that last step is a complete statement of the way in which it is put against us, but it is an element, yes.  And, yes, our argument absolutely says that which is obviously otherwise on its face an external affair – that is, within 51(xxix); commercial and administrative and judicial arrangements with New Zealand obviously make that – yes, we are saying, in the way that your Honours have read our argument, that it, nonetheless – not least because it is subject to the Constitution – has to yield to the allocation of political power concerning the disposition of the State judicial power, as well as Commonwealth judicial power to the terms, in particular, of Chapter III, which is where one finds in the scheme of the Constitution the extent of the capacity of the Commonwealth Parliament to alter – in this case, to increase; it could be to decrease – the reach, in the sense of territorial or personal jurisdiction, of State judicial power.

I do not need to dwell, I hope, overlong on . . . . . examples – some of which, I confess, we have written – concerning the difficulty for the argument that external affairs is the solvent of the problem of the problem in this case, because, in our submission, a proper test of that is to inquire:  well, does this extend to all and any aspects of the political organisation of the states?  For example.  Clearly enough, in our submission, one hopes only ever in academic hypotheticals, sooner or later one would get to the question whether treaties, multilateral or otherwise, can be used as a foundation to alter fundamentally the allocation of powers within the Constitution.

Now, I do mean “alter fundamentally”.  I do not mean to expand subject matter as – for example, famously, as occurred both in environmental regulation and in areas like anti‑discrimination.  Those are subject matters that say nothing – not least because of the potential generality of external affairs under (xxix) – as to what I am going to call allocation of powers of a political kind; in this case, something which attracts its own Chapter:  Chapter III. 

In our submission, from the negative implication in Ruhani concerning what the Commonwealth can do by investing subject matter jurisdiction in the Court, we would spell out as well – it was not in question in Ruhani, of course – that there are, other than by 51(xxiv), which operates only throughout the Commonwealth, no means by which that other aspect of jurisdiction – which we have called the reach territorial personal jurisdiction – of State courts exercising State judicial power – and I stress State judicial power – can be altered by the Commonwealth.

Otherwise, in our submission, the challenge is for those who assert that, well, this is obviously an external affair, alas, New Zealand is a foreign country, there needs to be some demonstration as to why that does not render, for example, a careful calibration in Chapter III of the way in which the State judiciary can be made part of the overall federal judicature; why that could not be completely altered by arrangements otherwise with a foreign State, and then legislation under 51(xxix) to give effect to that. That places section 128 of the Constitution in a most peculiar position.  That is how we alter the Constitution, not, with respect, by legislation purporting to nullify or render otiose the expression of limits elsewhere found on the kind of legislation which is promoted by somebody who enters into that kind of treaty.

Your Honours appreciate, of course, that there is not an argument from inconvenience available against us for this reason.  Your Honours have seen, I think it is paragraph 44 of our written submissions, and at no fee we have offered advice as to how it could be done, and Ruhani is the precedent.  Do it by pickup so that it is federal jurisdiction.  But that has not been done, because unless Flaherty v Girgis is wrong and it is not challenged – and we certainly embrace the aspects of Flaherty v Girgis that you have heard about from me, and you have read in our submissions – then it positively dictates that the federal aspect of service – TTPA is the postulant here – falls away when one comes to the decision‑making and does not give a federal flavour. 

It may or not be.  Depending on how it is developed, the Commonwealth contention will put that in the sights.  But on their primary response to our argument – certainly on the first respondent’s response – in our submission, there is no inconvenience except for the parties in the particular litigation in observing that in order for the Commonwealth to have its undoubted power to regulate service out for the exercise of substantive federal jurisdiction, then there has to be federal character to the authority to decide.

That can be done by the simple device that seems to be uncontroversial at the Bar table at least, illustrated – not uniquely – in Ruhani where, in effect, terse wording performs the dual function, one of which could be described as the pickup of decisional rules involving authority to decide – in that case from Nauru in order to entertain an appeal.  But that principle is not special of course to so‑called appeals, whether or not they are truly in original jurisdiction, none of that matters for the approach by which the Commonwealth is responsible for the rules that grant authority to decide.

I think that covers everything I wanted to do by way of elaboration of proposition 8.  I have now said everything I want to add, at least in‑chief, to elaborate proposition 9.  The consequences, to which we turn in proposition 10, include our response to the passages and conclusions of Chief Justice Bell below, to which we make reference halfway down our proposition 10.  The argument, as we put it, does not abstract anything.  It rather gives work to do to all the provisions, including those which, in Chapter III, define, grant, and limit legislative power with respect to the exercise of judicial power by State courts.

That is not an illegitimate abstracting, but rather ensuring that the structure of the Constitution does not contain within it the collapsing as otiose of those definitions and limits.  Another way of putting it is, and respectfully, differently from the way the Chief Justice ran at us as illicitly employing some expressio unius approach is rather to say, well, if it is to be a battle of maxims it really is, rather, a generalia non derogant specialibus with respect to external affairs.  In other words, the generality of matters, which the cases repeatedly say is one of the characters of external affairs, nonetheless does not carry within it the potential to alter the Constitution in its allocation of powers, particularly with respect to such political matters as the exercise of judicial power by the federal units, and without involving the people under section 128.

May I very briefly, by way of anticipation, draw to your Honours’ attention our proposition 11, with respect to our understanding of the Attorney’s notice of contention.  The first is simply to flag – as I have already sufficiently said in‑chief at least – that it would require, surely, a departure from the central teaching of Flaherty v Girgis, which is not, with respect, in question in this case.  And, as we note, on our understanding of the contention, if federal jurisdiction were the character of the notional proceeding in New South Wales, thereby escaping our arguments concerning reading the TTPA as extending to State jurisdiction wrongly or invalidly, then it follows, of course, that – going back to the requisite sameness in section 10 – it will not be the same proceeding because it would be federal, not State.

May it please your Honours.

KIEFEL CJ:   That might be a convenient time for the Court to take its morning break.  The Court will adjourn for 15 minutes. 

AT 11.16 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.30 AM:

KIEFEL CJ:   Yes, Mr Hutley.

MR HUTLEY:   Thank you, your Honours.  Can I start shortly with the Trans‑Tasman Proceedings Act, and I know your Honours are familiar with it, I do not want to go to many of the provisions, but I just – if I could – and that is behind tab 6 of volume 1 of the materials, commencing at tab 6 – and just noting section 3 as to the purpose of the legislation, namely, to (a) and (c) at section 3 at page 218 in the book.  Then one proceeds to, in effect, Part 2 which deals with the service.  The guide is in 7.  The application is, relevantly, at 8(1)(a) but there are some excepted proceedings in (2).  Then one has 9 and 10, which my learned friend took your Honours to, shortly.

Now, the only other provision which we wanted to draw your Honours’ attention to shortly is Part 3.  Part 3 deals with discretions conferred upon this Court to decline to exercise jurisdiction.  The guide is at section 16, at page 234, and your Honours will see that the form that one has is of an application to stay under 17, and then appeals of procedural aspects and orders under 18 and 19.  Then one deals with exclusive choice of law provisions in section 20, and section 21 preserves all the other powers of a court to deal with, otherwise stay on grounds other than what might be called forum grounds.  So, the structure of the legislation, in effect, allows for service but preserves a discretion to decline to accept a hearing on grounds which your Honours would be familiar with from other areas.

Now, we embrace the proposition which our learned friends make in paragraph 4 of their reply, that the Act might authorise the service of process in State courts – of State courts in New Zealand, where such service might otherwise not be permissible.

Now, it is common ground that sections 9 and 10 are supported by the external affairs power and in the materials at volume 9, tab 41, your Honours will see the Trans-Tasman Agreement which was the basis for the legislation.  We have set out an explanation of this at paragraphs 15 to 18 of our written submissions.  Now, our learned friends accept that the service of process power in 51(xxiv) does not abstract from the other heads of power the powers to legislate with respect to the service of process beyond the Commonwealth, and that seems to be common ground.  Now, it is, however, we say, important to realise there has been an allocation of power, to use my learned friend’s terminology, of extraterritorial service to the Commonwealth through the plenary power in the foreign affairs power.

My learned friend, in effect, points to the particular language of 51(xxiv) and says, that is peculiar, and that is of some relevance to reading – at the end of the day, reading down the foreign affairs power.  And we say – I mean, we submit that the plenary expression means that there has been an allocation at the Commonwealth level of issues such as service of process to the Commonwealth through the grant of the plenary power, which is the foreign affairs power.  And that is why we say at the end – we submit at the end of the day, our learned friend’s submission does come down to an expressio unius submission, not an implication, because, at the end of the day, the problem with any implication – it runs straight into the presence of 51(xxiv) in the face of Chapter II.  And so that, we say, is really the end of it, but anyway.

Our learned friend’s next submission goes to what appears to be some form of implication which is said to arise out of the combination of 51(xxiv) and Chapter III.  Now, we submit that it is contrary entirely to the reasoning in Flaherty v Girgis, and your Honours were taken to various passages, but if I could just go to one or two more, your Honours will find that in volume 3, tab 14 ‑ ‑ ‑

GORDON J:   Are you addressing the argument about, in effect, the collapsing of aspects of jurisdiction into one bucket?

MR HUTLEY:   Yes.  We say they are quite separate.

GORDON J:   Is that what this argument is addressing?

MR HUTLEY:   Yes.

GORDON J:   Thank you.

MR HUTLEY:   We say, in effect, our learned friend does not want to collapse them – cannot collapse them in the face of Flaherty v Girgis – but, in effect, tries to, in effect, finesse that, by this somewhat amorphous scope submission about the scope and extent of the jurisdiction – personal jurisdiction – of State courts. Now, you were taken to the famous passage of the plurality at 596, but the point to be drawn from it is the Service and Execution of Process Act, in relation to extraterritorial service is, essentially, enabling; that it is just a facultative.  Adoption of its procedures has no significant result than to render service out valid in circumstances which might otherwise legally be infected.  So, it has a limited operation.

Now, to the extent the submission which – I am not sure exactly how far my learned friend is – that it is an essential attribute of judicial power.  That would seem to be inconsistent with that analysis.  It is a common attribute, and, as your Honour the Chief Justice observed, a predicate event, often to the exercise of judicial power but not inevitable – representative proceedings being one, ex parte proceedings being another.  But, obviously, we accept that can be a very important step in effectuating a result whereby a decision becomes binding or enforceable, particularly when it extraterritorially takes place in foreign jurisdictions.

Then you were taken to the passage at 598 in the same judgment, which emphasises that jurisdiction over the subject matter – once service has been validly effected – derives from the same source, whether or not the service is extraterritorial.  So, in effect, they are split.  If you go further down the page, there is a reference to 51(xxiv) – this is on 598, 645 in the book – it says: 

Section 51(xxiv) of the Constitution, under which the Service and Execution of Process Act is enacted, envisages an extension in the reach of the process of the courts of the States and does not speak in terms of the investiture of the State courts with a new substantive jurisdiction.

Now, in our learned friend’s submissions there is, in effect, emphasis on what seems to have been the suggestion that 51(xxiv) is unique because of its nation‑building or integrating character.  Our only observation with respect to that is just about every provision of the Constitution shares that characteristic and if it does not share that characteristic, it probably should not be in the Constitution, because that is what it is doing.  Now, Justice Brennan made similar observations at page 601 in the report – 648 in the book – in the third full paragraph:

Although s 4(1) authorizes –

and then – yes.  Justice Deane made a similar observation ‑ ‑ ‑

KIEFEL CJ:   Just in relation to what Justice Brennan said about how section 4(1):

does not confer jurisdiction ‑ ‑ ‑

MR HUTLEY:   Quite.

KIEFEL CJ:   ‑ ‑ ‑ I thought Mr Walker accepted that.

MR HUTLEY:   Yes, I think – I am not suggesting he is parting from it, I am just stressing one or two other provisions, if I might.  Finally, the observation of Justice Deane at page 609, starting:

That being so, a valid law of the Commonwealth –

down to the end of the paragraph ‑ ‑ ‑

KIEFEL CJ:   His Honour’s reference to service extending or confining the jurisdiction of the court, that has to be read in context of territorial jurisdiction.

MR HUTLEY:   Precisely, your Honour.  Really, what it is saying, the potential occasions for the State to exercise whatever substantive jurisdiction it might possess may be increased by legislation having this character.  That is why we say, at the end of the day, if there is to be anything wrong with legislation such as my learned friend’s kind of imagined, in effect, piece of legislation whereby in effect you could have neighbourhood disputes from Riyadh fought in the Supreme Court of New South Wales – or something along those lines.

That is to be determined by the Melbourne Corporation analysis.  In other words, should the Commonwealth embark upon a course which, as it were, overwhelms the capacity of the State courts such as to undermine their integrity in accordance with the principles in this Court?  That would be a fact‑intensive analysis of the particular provisions and their likelihood of having that characteristic.

That is why I referred your Honours to such things as Part 3 of this legislation, which has – even with respect to a much more, as it were, minor threat of a wave, one might say a ripple – has protective provisions to ensure that the court is not necessarily forced to deal with matters, particularly when parties do not wish that to take place.

Now, before one dealt with any sort of imagined piece of legislation by reference to the Melbourne Corporation, one would have to see its provisions, which may well have broader protective provisions because of the breadth of such a provision such as allowing the court of its own motion to decline to accept jurisdiction if it thought it was inappropriate, and that they would all speak to whether a conclusion was made that the principles associated with Melbourne Corporation were engaged.  Now, as your Honours appreciate from the appeal before the Court of Appeal, an attempt was made to raise a Melbourne Corporation.

That was both declined because it had not been taken at trial, and, secondly, such observations as they make were made by the Court in paragraph 62 of the Chief Justice’s reasons, indicated that it was a very weak case for all the sorts of reasons which your Honours would imagine about the Court’s capacity to protect itself from any, as it were, overbearing effect of any such legislation.

So, what we submit is, to return to Flaherty v Girgis, once one accepts this division, analytic division, between service and substantive jurisdiction, the attempt to, as it were, run them together merely serves to divert attention from what we submit is the essential question:  why would this Court conclude that the Constitution has, through some form of implication, precluded the adoption of what might be called the drafting device of the Service and Execution of Process Act in effectuating legislation pursuant to some other power in section 51? And that, we say, is really the question that this Court is confronted with, because that is, in essence, what our learned friends are arguing.

EDELMAN J:   Is that really by way of saying that the references to jurisdiction in section 77 need to be read in the same way as Flaherty describes as substantive jurisdiction but which might be translated as the subject‑matter dimension ‑ ‑ ‑ 

MR HUTLEY:   Quite.

EDELMAN J:    ‑ ‑ ‑ of the jurisdiction.

MR HUTLEY:   Of course, Flaherty accepted the dispute about service under the Service and Execution of Process Act would be a dispute in federal jurisdiction.  So, I have to read it with that qualification, but what it is making clear is that one has to find, as it were, a federal source to the jurisdiction, particularly after the abstraction effected by section 39A and 39 of the Judiciary Act, to an authority to decide an issue by a State court in either federal legislation or the Constitution.

And that is, in essence, why the argument that one can have regard to 77(ii) and 77(iii) of the Constitution is misconceived, because Chapter III is not seeking to deal in a plenary way with State court jurisdiction. It deals with State court jurisdiction insofar as it intersects, or potentially intersects with federal jurisdiction. Section 77(ii), by either the removal of it or the limiting of it, the Federal Court’s jurisdiction is exclusive of those provisions. Or 77(iii) conferring jurisdiction matters otherwise arising under sections 75 and 76.

That is why the attempt to elevate this broad negative stipulation falls, because it assumes that it arises in the presence of a universal dealing by the Constitution with State court substantive jurisdiction, which is simply ‑ ‑ ‑ 

GORDON J:   By reference to 51(xxiv).

MR HUTLEY:   By reference to 51(xxiv) quite, your Honour.  And that is why, in effect, the whole argument simply does not work as a syllogism.  Because its major premise, namely, which must be, you can have this implication because the Constitution deals with the delimiting of State court personal jurisdiction in a capacity to deal with cases in a comprehensive way, exists in Chapter III together with 51(xxiv).  And the simple fact of the matter is, it does not.

Now, the Court has considered Flaherty v Girgis in a number of cases.  Firstly, in Lipohar v The Queen.  Your Honours will find that in volume 4 of your materials at tab 18.  That case dealt with the 1992 re‑enactment of the Service and Execution of Process Act which adopted sections which are almost identical materially with those in the Act with which your Honours are concerned.  The 1992 Act your Honours will find in volume 1 at tab 5, and just for your Honours’ references, the relevant provisions are sections 12 and 13 on pages 110 and 113 respectively – I am sorry, section 13 is on page 111 – and section 15(1) through (3) on page 112.

I do not think it is necessary to take your Honours to them in detail.  It shows that the TTPA was modelled to achieve exactly the same outcome as the Service and Execution of Process Act and, in effect, the materials show that that is the case and they are summarised in the decision of the trial judge at paragraphs 81 and following of his decision, which your Honours will find at page 113 and following of the core appeal book, and I will not go through them.

But to return to Lipohar, if I might shortly, in the judgment of Justices Gaudron, Gummow and Hayne at page 832 of the book, 514 of the report, their Honours explain that the 1992 SEPA:

does not expand the “subject matter” as distinct from the “territorial” jurisdiction –

of the Court.  This distinction between jurisdictions is explained at paragraph 79 on page 517 of the report, 835 of the book, where they explain the difference between what they describe as subject matter jurisdiction and territorial jurisdiction.  Your Honour Justice Edelman has more recently dealt with these distinctions, and we have dealt with those at paragraphs 31 to 32 of our written submissions.

Now, the last case we wish to just draw your Honours’ attention to is Truong v The Queen in 223 CLR, that is volume 7, tab 34, and can we draw your Honours’ attentions to, in the book, to page 156 of the written judgment, paragraph 78, in the judgment of Justices Gummow and Callinan, that dealing with the . . . . . Act.

GORDON J:   That was dealing with the Extradition Act.

MR HUTLEY:   I am sorry?

GORDON J:   That was dealing with the Extradition Act.

MR HUTLEY:   Yes, I know, but it says . . . . . was brought to the State, yes, but it was dealing – they were brought with the Extradition Act pursuant to the Service and Execution ‑ ‑ ‑

GORDON J:   Correct.

MR HUTLEY:   Exactly, your Honour.  I am sorry, I missed the point of your Honour’s observation.  Now, and as we say, that whole, that structure was the model for what your Honours have before you as the trial judge observed at paragraphs 81 to 85 of his decision.  Now, that, of course subject to any observations by, on behalf of the Commonwealth, by our learned friends, would seem to demonstrate that Parliament intended that sections 9 and 10 would do more than effect service of initiating process of an Australia court on a defendant in New South Wales.  And, as we say, if there is a dispute on that issue, where the service has been properly effected, that, of course, would be in federal jurisdiction. 

Now, it seems to be common ground that the Commonwealth could have adopted an alternate model, which, if the notice of contention is right, should your Honours need to get to it, would be such a model, namely a model which is of the variety which this Court considered in Ruhani.  Now, if all that be right, we say that is the end of the matter.  As we said, section 72 really has nothing to do with these proceedings.  The Court considered that section in some detail in Burns v Corbett 265 CLR 304, and your Honours sees that in volume 3, tab 11. And, your Honours, at page 397, paragraph 60 of the judgment, their Honours cite MZXOT v Minister 233 CLR 601 at paragraph 23, where the plurality explained that:

That which “belongs to” the State courts within the meaning of s 77(ii) is the authority they possess to adjudicate under the constitutions and laws –

That is, 77(ii) is concerned with the intersection of State court jurisdiction and federal jurisdiction, in part. Now, and section 77(ii) allows the Commonwealth to make a law providing that the jurisdiction of a federal court in certain matters is to be exclusive with courts of the State. As we submit, it is not plenary, and your Honours can see, in the sense of dealing with all State jurisdiction, your Honours can see that from paragraph 24 in the plurality’s judgment in Burns v Corbett.

Now, although not developed in my learned friends’ oral submissions, a second argument appears in our learned friends’ reply submissions, paragraph 7.  They say that it is necessary to recognise the implication for which they contend because Melbourne Corporation principle would fail to stop a Commonwealth law “radically” altering:

the character of the organs of State judicial power –

in a manner which, they submit, “cannot be reconciled” with the passage at page 268 of the Boilermakers’ Case, that is:

“the constitutional sphere of the judicature of the States must be secured from encroachment”.

Now, one has to read that passage in the context.  That passage was concerned with the need to specifically define federal jurisdiction to avoid that context, and which, obviously, was the ratio of the Boilermakers’ Case.  I will not take your Honours to the famous passage, as your Honours know it.  We say that there are a number of responses to this submission.

Firstly, if the premise is correct that the Melbourne Corporation Case cannot prevent this wave, well, then we submit that is part of the compact of the Constitution.  It cannot be an argument in favour of an implication that the exercise of a Commonwealth power under the Constitution would not infringe the Melbourne Corporation principle.  That is why it is really, in essence, an attempt to build a freestanding implication in Chapter III, which, for the reasons we have advanced, cannot, because the major premise is simply wrong.

Now, one, we would say, would have to build in this implication also a number of carve‑outs. Firstly, of course, 51(xxiv), but also – and it is not clear why it would solely be limited, if there was this implication, to service under section 51 – bankruptcy power – 51(xvii). It has been held in Campbell v Metway Leasing Ltd 126 FCR 14 – and you will find that at volume 8, tab 36 – the Full Court held that a Commonwealth law relying on the bankruptcy power, which provided that:

An action commenced by a person who subsequently becomes a bankrupt is . . . stayed –

upon becoming a bankrupt, to include actions in State courts exercising State jurisdiction.  So, in other words, that by the effect of the federal legislation the State court was deprived of the capacity – and I will use the word, not jurisdiction, at the moment – the capacity to determine a State court matter in a State court.

Now, we say that is right, and any implication which, in effect, sought to constrain the capacity of the Commonwealth to operate upon a State court’s ability to deal with a State matter – setting aside 109 for the moment, which is not a capacity point, it just deals with the underlying existence of the right – would seem to have to extend to removing a capacity to pass legislation of this variety too, when, in substance, does exactly the same thing.

Therefore, there would not have to be carve‑outs just for 51(xxiv) in relation to this implication, there would have to be, in effect, some form of – and one cannot define, as it were, the universe of possible carve‑outs, but there would have to be some form of condition on the operation of the implication which allowed of provisions of this variety to operate.

Now, the next problem, of course, is 51(xxiv) itself.  So, it seems to be a carve‑out to the condition, to the implication, and that runs into, to say the least, syntactic if not grammatical difficulties with dealing with the chapeau to 51, subject to the Constitution, because the implication would be subject to (xxiv), and that would be subject to the Constitution, which is subject to the implication which is subject to (xxiv) and whatever else has to fit in.  So, in our respectful submission, the whole construct is really at odds with the fabric of the Constitution rather than consistent with the fabric of the Constitution.

I have made our submissions, with respect.  We submit Melbourne Corporation principle would be a relevant principle.  It, of course, is not the only limit on the Commonwealth powers.  We have set out other ones, which are well‑known to this Court, at paragraph 51 of our submissions.

Unless there is anything further, I think that is all I can – beyond what is, of course, in our written submissions.

KIEFEL CJ:   Thank you, Mr Hutley.

MR HUTLEY:   Thank you, your Honours.

KIEFEL CJ:   Solicitor‑General for the Commonwealth.

MR DONAGHUE:   Your Honours, the appellants frame their case as turning upon the absence of power in the Commonwealth Parliament to alter the scope or reach of State judicial power, except where it is expressly empowered to do so by 51(xxiv), 77(ii) or 77(iii) of the Constitution.  You see that framing repeatedly in their written submissions in‑chief and in their reply in‑chief, particularly paragraphs 15, 26, 28, 35 and reply paragraphs 8 and 11.

That absence of power framing is noteworthy because, as your Honour the Chief Justice pointed out, and as Mr Walker accepted both orally and in writing, it is conceded, obviously correctly, that the provisions in question – sections 9 and 10 – are prima facie supported by the external affairs power in 51(xxix).  In light of that concession, the absence of power proposition upon which our friends rest their case could only exist if the Court were to recognise a novel constitutional implication that takes away the power that it is conceded that the external affairs power prima facie provides.  Novel, we say, because the implication suggested goes beyond the Melbourne Corporation limit which, as your Honours know, in one of its operations, operates to protect State judicial power – and Re Tracey is a good illustration of that proposition – novel because it goes beyond what Chapter III has previously been recognised as doing by way of implication, in that it seeks, as we put in writing, a radical repurposing of Chapter III to operate as a protector of State judicial power.

The way that our friends frame their novel implication, in our respectful submission, highlights its weakness because the framing recognises that they cannot claim that the Constitution denies to the Commonwealth Parliament the power to alter the scope or reach of State judicial power. They cannot claim that because sections 51(xxiv), 77(ii) and 77(iii) show that it obviously does not deny that power to the Commonwealth. Those provisions, in our submission, show on their face that it is not antithetical to the constitutional scheme for the Commonwealth Parliament to alter the scope or reach of State judicial power. Our friends start from the assumption that it is, but that is not an assumption that finds any textual or structural foundation in the Constitution.

In our submission, to the contrary, it is very hard to understand why the Constitution would impliedly prevent the external affairs power from supporting a law that does exactly the same thing; that has exactly the same operation in facilitating the service of State judicial process outside Australia, as the appellants concede, can be given by Commonwealth law to the service of State process within Australia.

That there is no structural rationale for drawing a difference of that kind, in particular, to the extent, that federal concerns are said to be in play.  One would think those federal concerns were weaker with respect to a law authorising service outside Australia, an area of a validly and obvious Commonwealth concern.  These are the service within Australia.  So, we respectfully embrace or agree with your Honour Justice Gageler’s question to my friend, to the effect that it would be an “odd” scheme to expressly authorise the Commonwealth to facilitate State judicial power within Australia – to use the phrase from Lipohar, to act “in aid of the functions – of the States” within the Commonwealth, but not outside it.  That, we submit, is the short answer to the whole case. 

Given that short answer, I will endeavour to be brief in my oral submissions.  They will be structured as follows.  First, I will say something very brief about the stringency of the test for recognising novel constitutional implications from the structure of the Constitution; second, briefly, why Chapter III does not support the alleged implication; third, brief remarks about 51(xxiv); and finally – but only if the Court wishes to hear oral argument on the question – the notice of contention, in which case, Mr Lim will address that.  But, unless the Court specifically wants to hear from us on that point, we are content to rely upon our written submissions in support of the notice of contention.

As to the first of those matters, the criteria for recognising a novel implication, the Court has explained many times that it will recognise a non‑textual implication only if it is:

logically or practically necessary for the preservation of the integrity of –

the constitutional structure.  That language, originally, is of Chief Justice Mason in ACTV on page 135, but it has often been applied, recently by both your Honours, Justice Gageler and Justice Gordon, in Burns v Corbett.  Your Honours have the citation and these pinpoints in paragraph 3 of our oral outline.

Even when an implication does satisfy that logical or practical necessity test, it will be recognised only so far as is necessary to give effect to the textual or structural features which are said to support it.  Your Honours, in a unanimous judgment of the entire Court, then composed of five justices in Gerner, addressed or summarised the applicable principles in a way that I invite your Honours to turn to.  It is volume 3, tab 15, Gerner v Victoria (2020) 270 CLR 412. In the joint judgment of the entire Court in paragraph 14 on page 422, your Honour said:

the question is not, “what is required by federation”.  It is now well settled that what the Constitution implies depends on “what . . . the terms and structure of the Constitution prohibit, authorise or require”

A few lines down, your Honours say the implication will be recognised:

Only to the extent that the text and structure . . . establish it –

And then, over the page, addressing the reasoning in Leeth of Justices Deane and Toohey, where their Honours have recognised an implication in relation to a quality, they had suggested, as you see four or five lines down, that:

“specific provisions of the Constitution which reflect or implement some underlying doctrine or principle are properly to be seen as a manifestation of it and not as a basis for denying its existence by . . . inappropriate rule of expressio unius”. This approach . . . did not find favour with the majority . . . Nor . . . did it command the support of a majority in any subsequent decision . . . It is not difficult to understand why. To seek to discern, by a process of induction from the presence in the Constitution of specific express restrictions . . . the existence of a broader limit . . . is distinctly inconsistent with the orthodox approach –

Here, we submit, our friends are attempting something even more ambitious because they are not taking from a set of identified restrictions and seeking to generalise a broader restriction, they are taking from a series of identified powers seeking to identify an implicit negative from those powers, and then seeking to generalise a broader constitutional restriction.  It is, in our submission, therefore, an even stronger case of a departure from the orthodox approach to the recognition of an implication.

In our submission, our friends’ argument falls well short – to return to the language of paragraph 14 – of establishing that by implication, the Constitution prohibits a law that is otherwise admittedly a law with respect to external affairs from extending the scope or reach of State judicial power.  That is what our friends need your Honours to accept, that there might be different issues – and your Honour Justice Edelman asked a question about reciprocity.

There might be different issues that would be raised by Commonwealth law restricting the exercise of State judicial power, because that might take you into a Melbourne Corporation universe, depending on the extent of the restriction.  But here, your Honours are concerned only with an extension or facilitation of the exercise of State judicial power of the exact kind that was upheld in Flaherty, save that it operates in a different territorial area.  But, in both cases, your Honours are concerned with provisions that allow the service of State process that could not otherwise have been served to be validly served by reason of a Commonwealth law and there is, in our submission, no ‑ ‑ ‑

EDELMAN J:   I am not sure that Melbourne Corporation would not extend, in some circumstances, to an extension, as opposed to a restriction of State power.  But it may be that the implication that is sought by the appellants is a form of a Melbourne Corporation – or expanded Melbourne Corporation type of implication.

MR DONAGHUE:   Well, an extension – one can imagine a swamping‑type argument that might be said to give rise to a Melbourne Corporation argument, but, in my submission, we are nowhere near that here.  Our friends ran and failed on Melbourne Corporation below and have not renewed it in this case.  So, our submission is that what your Honours are being asked to do – not expressly, but by inference – is to find a new implication that adds a new layer on top of something that Melbourne Corporation does not prohibit.  You could do that only if the Constitution requires that conclusion, and in light of the specific provisions I am about to come to, in our submission, it clearly does not.

GORDON J:   When you say “specific provisions”, you mean within the Constitution ‑ ‑ ‑

MR DONAGHUE:   I do.

GORDON J:   ‑ ‑ ‑ or do you mean within the Trans-Tasman Act as well?

MR DONAGHUE:   No, your Honour.  Sorry, I was unclear.  I mean within the Constitution.  So, I mean 77(ii), 77(iii), and 51(xxiv).  As to the support that Chapter III is said to provide to the implication, as your Honours know, Chapter III has been held to make exclusive provision concerning the judicial power of the Commonwealth, but it has never been said – and nor could it be – that it makes exclusive provision, with respect, to the judicial power of the States.  It touches on that topic only briefly and lightly.

That matters because in the famous passage in Boilermakers that I will not take your Honours to, but we have given the pinpoint in paragraph 4 of our outline, it is made clear that the basis for the negative implications that arise from Chapter III is the exclusivity of Chapter III on the topic of the judicial power of the Commonwealth, so that in the absence of any equivalent exclusivity, with respect to the judicial power of the States, one cannot adopt the same form of reasoning to find a negative abstraction from Commonwealth power.  One sees, instead, merely silence from which you can infer nothing other than that Chapter III is concerned with a different topic, save to the specific extent that the Constitution demonstrates otherwise.

The main provision that our friends rely on in that respect, as your Honours have heard, is 77(ii).  Could I invite your Honours to turn up 77(ii) which, in its terms, is a provision that concerns the judicial power of the States only – and Mr Hutley made this point – in its intersection with federal jurisdiction.  So, 77(ii) is the power to define:

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 –

So, we are concerned with jurisdiction that:

belongs to or is invested in the courts of the States –

but only to the extent that overlapping jurisdiction has been conferred upon a federal court. Your Honours see the most obvious manifestation of that in section 39(1) of the Judiciary Act. Section 39(1) of the Judiciary Act excludes state jurisdiction, but only with respect to jurisdiction that this Court actually has, not jurisdiction that it could potentially have. You see that from the opening of section 39(1) – so that 39(1) does not exclude all state judicial power under 76(ii) of the Constitution because this Court has no general jurisdiction under 76(ii).  The exclusion of State jurisdiction in relation to 76(ii) matters depends upon 39(ii), which is the general investment – and that then operates by reason of 109 to exclude State judicial power.

So, 77(ii) in its terms and as implemented in legislation – sections 38 and 39(1) of the Judiciary Act – only concerns situations where federal jurisdiction has actually been invested.  In that situation, it operates expressly to make clear that the Commonwealth can take away jurisdiction that State courts otherwise had – jurisdiction that belonged to them – including jurisdiction that they had pre‑federation and their manifestation as colonial courts.

In our submission, it is entirely unsurprising that the Commonwealth would deal expressly with that topic because, had it not done so, one can see clearly the foundation for a Melbourne Corporation risk for the proposition that the Commonwealth is in power to confer federal jurisdiction but it must operate in parallel with the existing state jurisdiction.  What 77(ii) does is make clear that notwithstanding that this is something that the State Supreme Courts had the power to do before, it can be taken away.  So, it precludes a Melbourne Corporation‑type argument that might otherwise have had some strength.

But there is, in our submission, no warrant for treating 77(ii) as saying anything at all about the scope or reach of State judicial power, even in situations where there is no overlap with federal jurisdiction such as this case, it just does not address that.  Chapter III does not address that topic and, in our submission, that has two consequences.  One is the Commonwealth cannot look to Chapter III to find the source of authority to enact a provision like sections 9 and 10 of the Trans‑Tasman Act, because it is not concerned with the topic that is covered by Chapter III.  But, equally, if we have a head of power somewhere else in the Constitution, such as the external affairs power in 51(xxix), there is no warrant for treating Chapter III as abstracting from that topic, because Chapter III is just not speaking to it.

EDELMAN J:   Your assumption being that there is no State power in relation to these facts because Schedule 6 would not apply.

MR DONAGHUE:   Yes, we argued the contrary at first instance, and your Honours looked this morning at what happened there.  We chose, as a party intervening primarily on the constitutional point, not to push an argument that the parties were not advancing.  So, yes, I do make that assumption.

There are two cases that support the idea that Chapter III is not an exhaustive statement of – sorry, that Chapter III does not prevent the Commonwealth relying upon other heads of power to effect the exercise of State judicial power.  Mr Hutley has mentioned one of them, Campbell v Metway, a case where the Bankruptcy Act actually stopped State proceedings in State jurisdiction in their tracks in circumstances where that had an obvious connection to the bankruptcy topic.

The other case is R v Reid, which I do not think I need to take your Honours to. It is [1999] 2 VR 605, volume 8, tab 39. It is a case about the Foreign Evidence Act. The provision in question was supported by the external affairs power. It was argued that the Commonwealth could not effect the rules of evidence applying in a State court by relying on any power outside of Chapter III and the Victorian Court of Appeal unanimously held, particularly at paragraphs 125 and 130, that none of the cases support the proposition that the Commonwealth cannot rely upon section 51 to effect State judicial power. That argument was rejected in terms.

As to the relevance to this case of 51(xxiv), our friends framed their novel implication in a way that accepts that 51(xxiv) must be recognised as an exception to it, meaning that they accept that relying on that power, the Commonwealth Parliament can alter the scope or reach of State judicial power.  And, in effect, they say, as they said below, well, setting that aside, the Commonwealth cannot alter the scope or reach of State judicial power.  But as Chief Justice Bell pointed out, one cannot really deal with it as simply as that.  You cannot just set aside a provision that points against the existence of the implication that is asserted, because the provision does tend to illustrate, rather powerfully, that facilitation of the exercise of State judicial process is something that the Constitution actually envisages, rather than impliedly prevents.

So, in our submission, accepting – going back to Gerner – that the implication has to be one logically or practically required, having regard to the text or structure of the Constitution, the text here very powerfully includes 51(xxiv) and, by reason of it, a recognition of the permissibility of supplementation of State judicial power of the kind here in question.  If we were here concerned with a Commonwealth law that was actually investing jurisdiction – and Mr Walker accepts that sections 9 and 10 do not do that – then different issues would arise because it is difficult to see conceptually how the Commonwealth could ever invest State jurisdiction in a State court.  I do not advance the proposition that it could do so, but your Honours do not need to grapple with the issues that would there arise.  It would seem logical that once one is dealing with the provision that is actually investing State judicial power, that would seem to engage 76(ii) and therefore the jurisdiction invested would be federal.

But because no one is alleging that is what happened by reason of sections 9 and 10, we are instead concerned only with whether Commonwealth law can extend the territorial reach of subject matter jurisdiction that owes its existence to the States.  So, the authority to decide comes from the State, the topics which can be the subject of that authority to decide come from the State, but the territorial reach is extended by the Commonwealth. 

That is Flaherty v Girgis, in our submission.  I will not take your Honours back to the key passages because you have seen them all, but the passage in particular in the middle of 596 describes what was done pursuant to the SEPA provisions there in issue as authorising the service of State process that:

might otherwise be legally ineffective.

So, the premise is that State judicial power could not effectively have been exercised but for the SEPA – the Commonwealth Act – provisions.  The Commonwealth Act provisions changed the legal position by allowing State judicial power to be exercised in circumstances where it could not otherwise have occurred.  As Justices Gaudron, Gummow and Hayne put it in Lipohar put it at paragraph 69, it:

operates “in aid of the functions of the States –

In our submission, the separation between territorial jurisdiction and subject matter jurisdiction that was recognised in Flaherty v Girgis applies equally whether the service is within Australia or outside of Australia.  That case really governs in explaining why what happened here is permissible unless something can be done pursuant to 51(xxiv) that cannot be done pursuant to any other head of power, bearing in mind that our friends expressly disavow the notion that 51(xxiv) abstracts from the other heads of power. 

The only other thing that I would seek to add on this point – and in fact, I think, my second last point – is that while it is obviously true that, ordinarily, service of process is necessary in order to produce a binding exercise of judicial power, that is not universally true.  To give your Honours a familiar example, the class action jurisdiction is the jurisdiction in which many people who may ultimately be bound by an exercise of judicial power might not have been served.  True, alternative procedures will be followed to give them notice or that are directed to giving notice of the procedure – and I believe that there are similar things happening in the native title jurisdiction – and those notice requirements are explicable and understandable by reason of the fact that it is an essential character of a court that it acts in a way that is procedurally fair, that it seeks to provide people who will be affected by the orders of the court with notice. 

KIEFEL CJ:   But they also have the effect of binding them to the decision of the court, do not they?

MR DONAGHUE:   They do.  That, your Honour, is my point.  Because, service, while it might be the ordinary way that you give that notice and that results in a binding order, is not the exclusive way, and that, rather, tends to suggest that service cannot have the essential or exclusive role in the exercise of judicial power that our friends seek to attribute to it.

GORDON J:   The most obvious one is ex parte applications and the grant of injunction in the exercise of the ex parte jurisdiction.  To suggest they are not binding would be an odd result.

MR DONAGHUE:   It would, your Honour, and we embrace that.  I think we gave the example in writing.  So, service, yes, often, is important as an antecedent to the existence of a binding judicial decision, but it is not an inherent part of it, and that, also, rather points against the necessary implications our friends propose.

Your Honours, you will have seen that we have filed a notice of contention.  It is in the core appeal book at 199 to 201.  The argument raised in the notice of contention would only be reached if your Honours reject the submissions that we have just made, and that Mr Hutley has made.  We advanced the same argument in both the Courts below, and neither Court reached the outcome because the primary argument was accepted.  In our submission, the same should follow here.  So, your Honours are, in my respectful submission, unlikely to reach the point, but if you do reach it, we have addressed it in paragraphs 47 to 57 of our written outline.  But, having said that, if your Honours would be assisted by our oral argument on the point or have questions about the argument, Mr Lim is prepared and ready to present the argument on that point.

Unless your Honours seek to hear it, we rely on our written submissions.

KIEFEL CJ:   Yes, thank you, Mr Solicitor.

MR DONAGHUE:   Thank you, your Honour.

KIEFEL CJ:  Anything by way of reply, Mr Walker?

MR WALKER:   Not very much at all, your Honours.  In relation to the significance of extraterritorial service and its connection with or contribution to the binding force, there are, of course, exceptions, but they tend rather to prove the rule, such as ex parte proceedings – that is, in the absence of another party – but also applications that only ever have one party.  The basic rule is still that which Laurie v Carroll exemplifies, which at least two sets of the reasons, maybe all the reasons in Flaherty v Girgis, use as a foundation for the analysis.

We should have drawn to attention, and I do now, the discussion by Mr Justice Brennan at page 600 of 162 CLR and the condensed historical setting at federation that his Honour there sets out in the paragraph commencing, “The legislature of each of the Australian colonies”.  In particular, that is a passage – I will not read it – but that is a passage which perhaps explains the pointed concern of 51(xxiv) with the service and execution of process throughout the Commonwealth, that what used to be called foreign law districts appertaining to each of the several States was no longer going to have anything like the full consequence of that character, by reason of Commonwealth laws doing what it, as Mr Justice Brennan there explains, was regarded as beyond the capacity, individually, of those States.  That is the first thing.

With respect to the reference to 51(xvii), “bankruptcy”, Campbell v Metway, that is as we have suggested in paragraph 19 of our written submissions in‑chief, alongside matters such as the Foreign Evidence Act.  That is the capacity directly to effect an outcome or inefficacy of proceedings, including by staying them or by, for example, regulating in such a way as to render inadmissible critical evidence.  Those are matters which – to repeat a phrase we have written – have to do with the adjectival aspects of jurisdiction which, in our submission, are to be distinguished from the fundamental questions concerning reach of territorial jurisdiction, reach of personal jurisdiction.  I do not want to repeat what we have said in‑chief about that.

Next, no, we do not seek to collapse jurisdiction in all the relevant senses that have been raised in this case into one bucket.  We most certainly do embrace the distinction carefully and, so far as we can see, uncontroversially at the Bar table drawn in Flaherty v Girgis. That, of course, is a reason why the words “subject to this Constitution” at the top of section 51 do not have the perverse effect that our success in arguing for a negative implication would destroy 51(xxiv) in its evident intent. Section 51(xxiv) is concerned not with substantive or subject matter jurisdiction but, as to the service aspect of it, with respect to so‑called territorial or personal jurisdiction. As has been pointed out, that is emphatically not the subject matter of 77(iii) which, in particular, provides the negative implication of which Chief Justice Gleeson was speaking.

May it please the Court.

KIEFEL CJ:   The Court reserves its decision in this matter and adjourns to 9.45 am tomorrow.

AT 12.35 PM THE MATTER WAS ADJOURNED