Gould and ORS v Brown S204/1996 [1997] HCATrans 172 (4 June 1997)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S204 of 1996

B e t w e e n -

VANDA RUSSELL GOULD, VANDA GOULD, RUSSELL GOULD, MALCOLM BEARD, RICHARD GEERSEN, JOSEPH SHLEGERIS, GREGORY RALPH, JOHN READ,

NEIL IRVING, JOHN LEAVER,

NIGEL STOKES, CONTINENTAL VENTURE CAPITAL LIMITED,

CVC INVESTMENTS PTY LIMITED, GOULD RALPH SERVICES PTY LIMITED and GOULD RALPH AND COMPANY

Appellants

and

MARTIN RUSSELL BROWN in his capacity as liquidator of Amann Aviation Pty Limited (in liquidation)

Respondent

BRENNAN CJ

TOOHEY J

GAUDRON J

McHUGH J

GUMMOW J

KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 4 JUNE 1997, AT 11.10 AM

(Continued from 9/4/97)

Copyright in the High Court of Australia

_____________________

BRENNAN CJ: We can take the appearances as per the Court paper, I take it, Mr Solicitor?

MR KEANE: Yes, your Honour.

BRENNAN CJ: Yes, and counsel have been informed, I take it, that the times which have been allocated will not be changed as a result of our late commencement of the hearing of this matter today.

MR KEANE: Thank you, your Honour.

BRENNAN CJ: Is there any agreement as between the interveners as to the times which are to be taken?

MR KEANE: We have not a formal agreement, but we anticipate we will get through what we have to do in two hours, your Honour.

BRENNAN CJ: Yes, very well, and you are to be the first, Mr Solicitor?

MR KEANE: I have that pleasure, your Honour.

BRENNAN CJ: Yes.

MR KEANE: If it please the Court, when the matter was last before the Court there was some discussion which was perhaps not developed of section 51(xxxix) as a head of Commonwealth power which might support the provisions which authorise the Federal Court to exercise jurisdiction conferred on that court by a law of a State. Those provisions relevantly are sections 56(2) of the Corporations Act 1981 and its more

general analogue section 9(2) of the Jurisdiction of Courts (Cross-vesting) Act. We wish to make some submissions supporting the view that section 51(xxxix) is an available head of power.

Your Honours, section 51(xxxix) of the Constitution empowers the Commonwealth Parliament relevantly to make laws with respect to matters incidental to the execution of the judicial power of the Commonwealth vested in the federal judicature by section 71 of the Constitution and section 71 of the Constitution relevantly vests the judicial power of the Commonwealth in such other, that is to say such federal courts other than the High Court, as the Parliament may create. In Griffin v South Australia [1924] HCA 40; (1924) 35 CLR 200, a copy of which we have arranged for your Honours to have, at 205 at about point 2 Sir Isaac Isaacs said in the passage commencing:

The "power vested by this Constitution . . . in the Federal Judicature" (par. xxxix. of sec. 51) includes ex facie whatever original jurisdiction the Federal Judicature possesses either directly under sec. 75 of the Constitution or indirectly by Commonwealth legislation under sec. 70 to sec. 80.

Then if your Honours would read down to the passage, about point 4:

the Commonwealth Parliament has the power of regulating the course of procedure in Federal jurisdiction from its initiation to its end, and the only question - subject to any express restrictions found in the Constitution itself - is how far it has assumed to regulate the subject matter.

It is our submission that section 56(2) of the Corporations Act and section 9(2) of the Jurisdiction of Courts (Cross-vesting) Act are provisions which are apt to facilitate the management of the Federal Court's procedure and its business. Might we pause there before developing that submission to say that we do not apprehend that this submission is foreclosed to us as a matter of authority by the authorities referred to in the appellant's written submissions in reply, particularly the authorities collected in the footnote to paragraph 23 on page 8 of the appellant's written submissions in reply. There it is said, footnote 12, which commences with reference to your Honour's decision in McIntosh v National Bank:

The view has been expressed that the incidental power in s.51(xxxix) of the Constitution would not appear to support a law conferring on a Federal Court power to exercise jurisdiction (whether by transferring the proceedings or deciding them itself) in respect of matters outside Federal jurisdiction.

GUMMOW J: Is there not a case called Willocks v Anderson [1971] HCA 28; 124 CLR 293, which is authority for the proposition that 51(xxxix) does not authorise the making of laws conferring jurisdiction on a Court forming part of the federal judicature?

MR KEANE: Your Honour, the reason we submit that neither these authorities nor that proposition are against us is because - - -

GUMMOW J: You say even though it does not have that scope, it authorises some other sort of jurisdiction, does it? I do not quite follow.

MR KEANE: Your Honour, our point is, those cases are concerned with the conferral of jurisdiction, the conferral of judicial power, jurisdiction by the Commonwealth Parliament, and the question may be whether Chapter III contains the negative implication that was discussed when we were before the Court last time. If Chapter III does not deny the possibility of the conferral by the States of jurisdiction then, in our submission, section 51(xxxix), which operates on the presupposition of jurisdiction conferred, may support an authorisation by the Commonwealth of the exercise of that jurisdiction conferred elsewhere by the Federal Court where to do so is incidental to the discharge of its business.

We recognise that we still have the Chapter III issue to deal with, and that will be addressed. The submission we are making presupposes, as Sir Garfield Barwick said section 51(xxxix) does - and his Honour's observations in this regard are in Philip Morris v Adam P. Brown Male Fashions, which is one of the other authorities referred to in footnote 12.

GUMMOW J: That applies Willocks v Anderson. That is what Sir Garfield was referring to.

MR KEANE: Quite. In Philip Morris (1981) 148 CLR 457 at 477, the first full paragraph on the page, his Honour affirmed that:

in my opinion, the authority to grant appropriate remedies is not included in the accrued federal jurisdiction. Section 51(xxxix) of the Constitution is an appropriate source of legislative power to grant such authority. Section 32 of the Judiciary Act is, in my opinion, an exercise of that constitutional power. Section 51(xxxix) is not, in my opinion, a source of substantive legislative power but only of adjective power. It presupposes jurisdiction that supplements its existence by the grant of power to give remedies appropriate to the exercise of the substantive jurisdiction. That jurisdiction in the case of the Court comes directly from the Constitution.

We accept that, with respect. We do not submit that section 51(xxxix) itself supports a conferral of jurisdiction but rather we submit it supports the authority granted to the Court, to use the words of the Constitution, "in the execution" of federal jurisdiction of power granted aliunde.

TOOHEY J: What do you identify as the power vested by the Constitution in the Parliament?

MR KEANE: Section 71, your Honour, and the Federal Court Acts and the substantive legislation which vests in the Federal Court jurisdiction which, as we know as a matter of history, carried with it accrued jurisdiction which gave rise to the problems of jurisdictional tugs of war and what was sometimes characterised as jurisdictional creep on the part of the Federal Court.

TOOHEY J: But is that not moving away a bit from the language of (xxxix) which requires you to identify a power vested by the Constitution?

MR KEANE: Your Honour, in relation to that we say that, as Sir Isaac Isaacs said in Griffin, that is directly, or indirectly by the Constitution - section 71 itself vests in Federal Courts other than the High Court to be created by the Parliament that jurisdiction. The question then is whether provisions which facilitate, for example, the transfer by the Federal Court of a matter or a proceeding which to speak broadly in the interests of justice, might be better dealt with in another court, the grant of jurisdiction to effect that transfer and so to manage the Federal Court's business in an efficient way is, in our submission, not a disproportionate exercise of that power.

May we just mention, before we pass from our learned friend's outline, paragraph 23, the first case that is cited there, McIntosh v National Australia Bank (1988) 80 ALR 47. Can we simply mention - and, with respect, we would adopt this - that, as your Honour Justice Gummow observed in that case at page 49, particularly at line 20, in order to transfer proceedings there must be jurisdiction in respect of the proceedings. Our point is that section 4 of the general Cross-Vesting Acts confers that jurisdiction. Section 9(2) authorises its exercise by the Federal Court and couples it with the provisions of section 5(2).

In the case of the Corporations Act, section 56 of the Corporations Act is linked with section 53(2) of the Corporations Act which facilitates the exercise of the discretion to transfer that language, where it appears to the Court to be in the interests of justice to do so, is important because it is that particular measure which does, in our submission, facilitate the exercise by the Federal Court of its jurisdiction. The execution of a judicial power conferred on it by the Constitution, by the Federal Court Act and by those federal statutes which explicitly confer jurisdiction, we say explicitly confer jurisdiction to distinguish it from the accrued jurisdiction which it picks up because of the wide notion of "matter".

To seek to put in more concrete terms why we say that authorising the Federal Court to exercise a State jurisdiction facilitates the execution by the Federal Court of a judicial power vested in it pursuant to the Constitution, it is perhaps useful to recall the problems which arise for the Federal Court in the exercise of its explicit jurisdiction and the jurisdiction called the "accrued jurisdiction" which adheres to it.

Your Honours, in cases involving the assertion of both federal and State claims, before this legislation - before these schemes the Federal Court was obliged to investigate and to establish whether the case fell within the court's explicit jurisdiction or its accrued jurisdiction. The exercise of the accrued jurisdiction was said to be discretionary rather than mandatory, and one is reminded of your Honour Justice McHugh's observation on the last occasion that Julius v The Bishop of Oxford stands for the proposition that jurisdiction, once conferred, is to be exercised. The accrued jurisdiction was said by this Court to be in a different category. It was a jurisdiction which it was for the discretion of the Court to exercise.

BRENNAN CJ: What case was that?

MR KEANE: Your Honour, that is Stack v Coast Securities, and I am coming to it. The exercise of the accrued jurisdiction was discretionary, and it was for the Federal Court to determine how that discretion should be exercised in particular cases and, where one had, as in Stack v Coast Securities, the unedifying and perhaps - well, certainly the sterile, and perhaps unedifying type of jurisdiction between Supreme and Federal Courts, ultimately it fell to this Court to resolve the conflict. If we can take your Honours to Stack v Coast Securities (1983-1984) 154 CLR 261, and if we might take your Honours first to the joint judgment of Justice Mason and your Honour Justice Brennan and Justice Deane on page 294. At page 294, in the paragraph which begins at about point 5 on the page:

In this, as in other cases, the recurrent problem is to identify what it is that falls within the Federal Court's accrued jurisdiction. The majority judgment in Fencott v. Muller provides this assistance in reaching an answer:

"What is and what is not part of the one controversy depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationships. The scope of a controversy which constitutes a matter is not ascertained merely by reference to the proceedings which a party may institute, but may be illuminated by the conduct of those proceedings and especially by the pleadings in which the issues in controversy are defined and the claims for relief are set out. But in the end, it is a matter of impression and of practical judgment whether a non-federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter."

Barwick C.J. in Philip Morris had expressed a similar idea, stating that the exercise of the accrued jurisdiction "is discretionary and not mandatory".

That is the passage I had in mind in answering your Honour the Chief Justice.

GUMMOW J: But are you saying, Mr Solicitor, that consistently with this the exercise of the accrued jurisdiction could have been made mandatory by legislation under a law under 51(xxxix)? Otherwise I do not quite see what it has got to do with anything.

MR KEANE: What it has to do with is to identify the recurrent problem, the circumstance that the Federal Court was confronted with the necessity of coming to a view as a matter of impression and practical judgment, whether non-federal and federal claims were joined within the ambit of one controversy, and then exercising a discretion, as appears at the bottom of page 294 to allow the non-federal claims to be determined in a State court, and as they say in the first paragraph on page 295:

It is for the Federal court to determine how the discretion should be exercised in the present cases.

Then there is some discussion as to how the discretion is to be exercised. If we can ask your Honours to go then to page 297, in the last paragraph on the page the resolution of whether particular issues should be resolved in the Federal Court or State Supreme Courts would, in the ultimate, fall to be decided by this Court as appears in the passage that commences on the last paragraph on page 297 and concludes at page 298:

Usually a discretionary judgment of this kind is to be made by a judge of the Federal Court or a judge of the Supreme court within the confines of the particular proceeding which is before him.

The final passage to which we wish to refer in Stack v Coast Securities, and perhaps in response to your Honour Justice Gummow's question, the observations by Justice Murphy at page 299 in the second-last paragraph on that page, beginning at about point 7:

Parliament has largely left this area open -

that is, how to decide who should decide -

Parliament has largely left this area open, so that the law is to a large extent decisional, and consists of the adoption of common law rules of federal judicial power. The primary goal, therefore, is the adoption of rules which facilitate the operation of the federal judicial system, and a secondary goal -

that is the decisional rules of the common law of the federal judicial power:

and a secondary goal is the avoidance of unnecessary conflicts with the State system.

There may be a fortress Chapter III but even a fortress has neighbours and it needs rules of engagement and disengagement:

In the absence of any statutory expression or necessary implication, this will best be achieved by treating the Federal Court's accrued jurisdiction as non-exclusive, and as jurisdiction which the court may, but need not, exercise.

In our respectful submission, if, as his Honour Justice Murphy identifies, there is a need for rules of engagement or disengagement, if they were rules that are able to be developed by judicial system incidental to the execution of a judicial power then, in our respectful submission, it is equally open for those rules to be supplied by statute. We submit that section 51(xxxix) supports statutory rules which address the problems thrown up in the course of the execution of a judicial power of the Commonwealth by the Federal Court, and these rules both facilitate the operation of the federal judicial system and avoid unnecessary conflicts between the federal judicial system and the State judicial system.

May we say these rules assist the Federal Court in a number of ways. Firstly, where it was previously or where it would otherwise be necessary for the Federal Court to come to a conclusion, as your Honour Justice Gummow considered you had to do in McIntosh's Case, at a preliminary stage rather than have the question of uncertainty stamp the proceedings until they were finally determined, where it is necessary for the Federal Court to come to a conclusion as to whether a claim based on federal law was properly a matter pending in the Federal Court, a substantial aspect of which was founded on federal law, as to which see the passage from Fencott v Muller which we cited earlier, the Federal Court now under this dispensation no longer needs to pursue that investigation at the preliminary stage to reach a conclusion involving matters of impression and judgment as to whether the case before it is founded in this substantial aspect upon federal law.

The court is authorised, where it appears that the interests of justice require sending a case with a colourable federal basis to another court, the court is given the jurisdiction and is authorised to exercise the jurisdiction to send it elsewhere. Under the cross- vesting arrangements the court is relieved of the necessity of coming to a conclusion as to whether the proceedings are in truth properly before it. Where it appears to the judge that justice requires a case which has some colourable connection with the federal jurisdiction but its substantial basis is in State law, the case may be transferred without further investigation.

GUMMOW J: It is not quite as comfortable as that, Mr Solicitor, because the State law, as this State law here arguably - Mr Douglas says it does - the State law here might involve the exercise of jurisdiction which undoubtedly could be exercised by a Supreme Court but which, if it were a federal law, would involve the exercise of non-judicial power. Now, in this very case there was that debate.

MR KEANE: Your Honour, that is a problem specific to the Corporations Act.

GUMMOW J: Well, that is what we are trying to work out.

MR KEANE: Your Honour, we are also concerned with the general scheme.

GUMMOW J: You might be.

MR KEANE: Your Honour, the case is, as appears from page 295 of the appeal book, where the general scheme provisions are in issue as well.

GUMMOW J: There are certain sections that are said to be valid or invalid.

MR KEANE: As to the point your Honour makes, we recognise that it is not quite as comfortable with the Corporations Act, the submission is not quite as comfortable there, because the provision - - -

GUMMOW J: There is just another interface, that is all.

MR KEANE: - - - is made more generally. We accept that, but the question then is whether the making of general provision in anticipation of the kinds of problems, to address the potential for those problems in a way which is qualified by provisions which authorise the transfer of proceedings which other courts have jurisdiction to deal with and which, as the Corporations Law says, where it appears to the Federal Court judge in the interests of justice are required to be tried elsewhere, then there is a simple, quick mechanism for the court to do that. Now, one assumes that if someone says that it should be dealt with elsewhere, that would be raised before the court. Where it is not, that discretion does not arise to be exercised.

GUMMOW J: But, Mr Solicitor, on your submissions do you accept that if 596A and 596B at least in some of their operations are inquisitorial in nature that they cannot be picked up or, rather, picked up is not the word, injected into the Federal Court structure?

MR KEANE: Your Honour, I think that particular question will be addressed by others, but if I might say in relation to that a more general answer to the kind of problem your Honour raises rather than specifically in relation to 596. Where the power comes not from the exercise of the Commonwealth Parliament to vest judicial power in the Commonwealth, where the power is a power that comes from outside, the circumstance that it is a different power does not mean that it is inconsistent with the structure erected by Chapter III.

In other words, if there are elements of the conferred jurisdiction, the non-Commonwealth conferred jurisdiction, which are not strictly characterisable as judicial power, that, in our respectful submission, does not mean that the conferral cannot work or that an authority to exercise the federal jurisdiction or the accrued jurisdiction cannot work so long as it facilitates rather than is inconsistent with the execution by the Federal Court of the judicial power of the Commonwealth.

BRENNAN CJ: So the implicit limitation which was found in Boilermakers can be outflanked by the vesting of State jurisdiction?

MR KEANE: Your Honour, Boilermakers and Judiciary and Navigation Act, that line of authority - and, indeed, Philip Morris - are all cases concerned, as indeed, in our respectful submission, are the provisions of Chapter III, with the conferral by the Commonwealth of the judicial power of the Commonwealth. True it is that those provisions do not contemplate a conferral of jurisdiction aliunde, but neither do they negative the possibility, in our respectful submission; they simply do not deal with it.

BRENNAN CJ: That may be so, but the point of my question was that Chapter III was regarded as precluding the vesting in Federal Courts of non-judicial power. Your submission is that, although that is the limitation on the vesting of federal judicial power, it does not affect the vesting of State non-judicial power in Federal Courts.

MR KEANE: That is so, your Honour.

BRENNAN CJ: That seems to be a somewhat radical transformation of the isolation of the federal judiciary from the exercise of powers that are non-judicial.

MR KEANE: Your Honour, as we say, one can propose a fortress Chapter III, but as we say, with respect, even fortresses have neighbours; they need rules of engagement and disengagement. That has become apparent in the course of the execution of the judicial power of the Commonwealth. The boundaries of engagement and disengagement have come into play and the Parliament has authorised certain measures to address that. The Parliament of the Commonwealth has not vested non-judicial power. Parliaments to whom Chapter III does not speak, in our respectful submission, have vested power which the Commonwealth authorises the Court to exercise. It would be true to say that if that were inconsistent with the execution by Federal Courts of the judicial power of the Commonwealth, it would fail because of Chapter III. Our point is simply this: to say that it is a different power is not to conclude that it is inconsistent.

BRENNAN CJ: That might be perhaps the important question because, although analogies are perhaps inappropriate, even castles have moats.

MR KEANE: Yes, your Honour, and they have gates and garbage chutes..

BRENNAN CJ: Gates can be pulled up.

MR KEANE: Quite, your Honour, but one should not be astute to set them in splendid isolation.

GUMMOW J: The gate here, Mr Solicitor, in a way is section 73. Would you say that a State legislature could invest appellate jurisdiction in the Federal Court from a decision of a State inferior court?

MR KEANE: No, we would not, your Honour.

GUMMOW J: Why?

MR KEANE: We would not apprehend that we would need to say so to support our argument and we would have difficulty in seeing how that could be characterised as facilitating the exercise by the Federal Court of the judicial power of the Commonwealth vested in it.

GUMMOW J: It would be inconsistent with the scheme of section 73, would it not?

MR KEANE: Yes, it would. To say that, in our respectful submission, is not to identify an answer to our contentions.

GUMMOW J: What happens in this case? The New South Wales Corporations Law, section 42, talks about jurisdiction being conferred on the Federal Court:

with respect to civil matters arising under the Corporations Law of New South Wales.

MR KEANE: Yes, your Honour, but what there is not - - -

GUMMOW J: Is that original and appellate jurisdiction?

MR KEANE: It is, and the idea is that, once you are in that stream, you stay there. You do not sort of come back and forth.

GUMMOW J: It is no good talking about streams. Ordinarily if one confers jurisdiction with respect to a matter, that is it; there is no appeal. You have to find some further conferral of appellate jurisdiction. Grierson v The King said that a long while ago about criminal appeals, remember?

MR KEANE: Yes.

GUMMOW J: What is the source of the authority of the Federal Court to entertain an appeal from a decision of itself in relation to a State Corporations Law matter?

MR KEANE: Your Honour, it is the grant of jurisdiction, wholesale grant of jurisdiction in the provisions, to the effect that any appeals will proceed in that hierarchy. The difference between that and the case that your Honour put to me is that your Honour put to me a case where there is a grant of an appellate jurisdiction which by definition really has nothing to do with all the problems that Stack v Coast Securities was concerned about, the kind of potential problems that have to be addressed by judges of the Federal Court at the preliminary stage before there is even a trial.

GUMMOW J: This seems to outflank the role of the Supreme Courts of the States in relation to this Court under section 73.

MR KEANE: No, your Honour. The role of this Court - and we accept that it is not open to deny an appeal to this Court in so far as the statutes might seek to deny appeals from decisions to transfer and so forth.

GUMMOW J: Yes, I know but - - -

MR KEANE: That cannot preclude an appeal to this Court, but to say that is not to say that it cannot preclude an appeal to the Federal Court.

GUMMOW J: We are not - still at issue though. Suppose on its true construction section 42 simply confers original jurisdiction on the Federal Court. Could that be valid for the State law to do that?

MR KEANE: In our respectful submission, it could.

GUMMOW J: How would that square with section 73? You would have State jurisdiction diverted into the Federal Court with a brick wall. On the other side of the brick wall, if things had stayed as they ordinarily are, there would be the State Supreme Court and this Court under section 73.

MR KEANE: But I take it from the question that your Honour put to me that the appellate jurisdiction remains in the States and is not conferred. If that were to be the case, then it would be a different scheme than the scheme which we have.

GUMMOW J: I am just trying to work out if it would be valid, that is all. Assume on its construction section 42(3) simply confers original jurisdiction. Where is the appellate jurisdiction and is there any?

MR KEANE: Your Honour, in that event there would probably need to be some machinery to affirm the continued availability of an appeal in the State system.

GUMMOW J: Yes, so you could have an appeal from the Federal Court to a State Supreme Court, the Court of Appeal.

MR KEANE: And because that does seem undesirable one does not do that. One goes up the hierarchy in which jurisdiction is exercised.

GUMMOW J: What then is the source of the further appeal from the Full Court of the Federal Court to this Court? How does that happen?

MR KEANE: We accept - - -

GUMMOW J: Does this all flow under the State Act?

MR KEANE: We accept that section 73 would ensure that there was always an appeal that lies to this Court and that no legislation could deny it.

GUMMOW J: So, section 73 is talking about the Federal Court having taken on this form of jurisdiction from the State law.

MR KEANE: Section 73 is ensuring that an appeal to this Court cannot be denied. I do not know that I can take it any further, your Honour.

If we are correct in the view we urge on the Court that one should question the availability of section 51(xxxix) on the basis that one is concerned with the broad question of whether it facilitates the execution of the judicial power vested in Federal Courts, having regard to the problems which they meet in practice, and the problems which they potentially meet, if we are correct in that then it has some implications for the first limb of the appellant's argument. That was concerned with the absence of power in the States because of the provisions of section 5 of the Colonial Laws Validity Act.

BRENNAN CJ: Mr Solicitor, if your argument is right then it does not need State legislative power to effect this result. It can be effected by federal legislative power, is that correct?

MR KEANE: No, your Honour, it would need the exercise of State legislative power to give the Federal Court, to confer the jurisdiction - - -

BRENNAN CJ: Why?

MR KEANE: Because even in order to exercise a power to transfer proceedings it is necessary that that jurisdiction be there, as Justice Gummow pointed out in McIntosh's Case. If jurisdiction is not conferred in respect of proceedings which, though there may be a colourable federal aspect to them, there is no basis other than a basis in State law, then there would not be jurisdiction to transfer, even.

BRENNAN CJ: Why does not the federal legislative power extend to vesting such jurisdiction in the Federal Court, whether State or federal, as is conducive to the easy exercise of its functions and the elimination of the Stack v Coast Securities problem?

MR KEANE: Your Honour, the only answer I can give to that is, apart from accepting the implication that it could have all been done by the Commonwealth itself, in any event, and the doubt over that because of Chapter III because it would involve the conferral of something which was not properly characterised as adjective, but the actual grant of a substantive jurisdiction, apart from that caveat, perhaps it could have. It would have just been less attractive as a co-operative exercise by the federation and its constituents.

BRENNAN CJ: This proposition would have surprised many of your predecessors as Solicitor-General, I think, Mr Solicitor.

MR KEANE: And, your Honour, we put it with those caveats that there may have, indeed, been an inhibition on the Commonwealth because of the possibility that it would be argued that there is somewhere in there the necessity to have a substantive jurisdiction over State matters.

BRENNAN CJ: Perhaps the inhibition or qualification flows by way of expressio unius from Chapter III; namely, that the Commonwealth can invest only federal jurisdiction.

MR KEANE: And, your Honour, to the extent that that is so, and to the extent that the issue was one of vesting substantive jurisdiction to aid another substantive jurisdiction, and that is what the States have done, we submit effectively, there being no expressio alterius directed to the conferral of State powers by State legislatures.

BRENNAN CJ: Now, can we just take your proposition that this is, as it were, incidental, or conducive to the exercise of federal jurisdiction? Is that a correct analysis of the vesting of jurisdiction in a court in order that it can avoid the making of decisions which relate to its jurisdiction?

MR KEANE: In order that it can avoid coming to a final view as to whether a matter is truly a matter which is created by or supported by federal law and federal law alone, or federal law substantially, what the Federal Court is authorised to do is to act on the basis of a view which is not a conclusion; that where it appears to the court that the interests of justice require a transfer, it may transfer, and it is given jurisdiction - jurisdiction which is State jurisdiction - to support that transfer.

In our respectful submission, it is not necessary to support the laws of the scheme under section 51(xxxix); that the court should always, in every case, be exercising its federal jurisdiction to the ultimate by deciding the cases that are pending before it - - -

BRENNAN CJ: No, the proposition though is that it is much more convenient to do it this way. Now, one can accept that. But the fact that something is more convenient, does that mean that it is incidental to or conducive to the exercise of specific federal jurisdiction? It just does not seem to me to follow.

MR KEANE: Your Honour, it can be. If one takes the view that 51(xxxix) requires it be incidental to the exercise of jurisdiction in a specific case, then Stack v Coast Securities give examples to support the proposition that it can be. We would also submit though that 51(xxxix) is not focused when it speaks of laws:

incidental to the execution of any power.....in the Federal Judicature -

is not focused on the specific exercise in specific cases, but has a broader focus which, in the words of Sir Isaac Isaacs, is concerned with the regulation of procedure as a general matter.

TOOHEY J: But you still have to tie it to a power vested by the Constitution.

MR KEANE: Yes, that is true.

TOOHEY J: The way you put it a moment ago seemed rather free ranging.

MR KEANE: Well, we would say a broad view, your Honour, rather than free ranging, perhaps.

TOOHEY J: I prefer my choice.

MR KEANE: But what your Honour says is correct, and the issue whether jurisdiction vested in the Federal Court by laws made by the Parliament under the Constitution can be said to be vested by the Constitution is, I think, the point your Honour is putting to us.

TOOHEY J: Yes.

MR KEANE: In our respectful submission, our answer to your Honour on that lies in the dicta of Sir Isaac Isaacs which we gave your Honour earlier and which we submit is correct as a matter of construction the Constitution because section 51 itself vests in the High Court, or such other Federal Courts as the Parliament creates. So that, there is a vesting by the Constitution in those other Federal Courts, as Parliament creates them, so that, to that extent, 51(xxxix) has a somewhat ambulatory operation.

Now, your Honours, the observations of Sir Isaac Isaacs have been referred to subsequently in Philip Morris which we referred to earlier. They are mentioned without endorsement or dissent, one might say, by Justice Aickin. That is in 148 CLR 457 in the passage at 534 at about point 7, but in our respectful submission his Honour's view of it is correct, with respect - - -

McHUGH J: It was a dissenting judgment, was it not?

MR KEANE: Yes, it was in the case, but I think Sir Harry Gibbs referred to the issue, did not decide it either way, but did not dissent from the view that Justice Isaacs had expressed and, as we submit, that view is correct having regard to the text of section 71.

TOOHEY J: Except that you would have to read in the words into Justice Aickin's judgment "applies not only to the judicial power of the Commonwealth".

MR KEANE: I am sorry, I did not - - -

TOOHEY J: Well, the language applies not only to judicial power but it is the judicial power of the Commonwealth that we are talking about at all times if we are talking about section 71 and although it speaks of other federal courts as the Parliament creates, it is still courts that are created in the exercise of judicial power of the Commonwealth.

MR KEANE: Quite, your Honour.

GUMMOW J: And one has to read the bottom of 534, does one not, of Justice Aickin's judgment and over to 535?

MR KEANE: Yes, and that is correct, with respect. As Justice Toohey observed, these dicta are dealing with the issue of conferral of jurisdiction by the Commonwealth. In so far as we are referring to them to show the subsequent fate of the view of Sir Isaac Isaacs in relation to the scope of the incidental power, then we recognise that that is not an answer to the Chapter III problem and we have made our submissions about that.

GUMMOW J: One of the decisions that his Honour refers to at the top of 535 is Collins v Charles Marshall. That is authority for the proposition, is it not, that the Commonwealth Parliament could not invest in the old Arbitration Court power to entertain appeals from a State inferior court in a matter of State jurisdiction?

MR KEANE: I am sorry, I cannot assist your Honour with that. On the footing that that is so, it is still a question, your Honour - - -

GUMMOW J: His Honour was entirely - oblivious is not quite the word - to the State dimension of things.

MR KEANE: Your Honour, we would submit that it is not foreclosing that issue and we would submit his Honour is not addressing that and that Charles Marshall and the proposition that your Honour derives from Charles Marshall is a proposition which is concerned with Chapter III and the exercise by the Commonwealth Parliament of a conferral of jurisdiction, judicial power of the Commonwealth. Your Honours, those are our submissions.

BRENNAN CJ: Thank you, Mr Solicitor. Mr Solicitor for Victoria.

MR GRAHAM: If the Court pleases, in the interests of brevity may I adopt as part of our oral argument the written submissions provided to the Court prior to the previous hearing. We only desire to expand upon a few points in those written submissions and to add some additional observations concerning matters which have arisen in the course of argument. May I take the Court to paragraph 5 of our written submission. That is directed to an argument which was placed, it seemed, at the forefront of the appellants' submissions to this Court originally, the contention being that it lay beyond the power of a State Parliament to invest jurisdiction in the court created by another legislature or belonging to another political entity.

The point that we make in paragraph 5 is that it is open to a State Parliament to invest jurisdiction in a court not belonging to its own hierarchy of courts. This Court so held in relation to Queensland legislation giving jurisdiction to the Privy Council in The Commonwealth v Queensland 134 CLR 299, the relevant passages in the judgment of Justice Gibbs as he then was at pages 310 to 312. His judgment had been agreed with by the Chief Justice and Justices Stephen and Mason. The same proposition was adopted by Mr Justice Isaacs much earlier in The Commonwealth v Kreglinger and Fernau in 37 CLR at 393.

It is perhaps worth noting that in that passage Sir Isaac Isaacs referred to the provision of section 218 of the former Supreme Court Act of Victoria which granted a right of appeal to the Privy Council. Victorian provisions, interestingly, had been enacted in 1852 prior to the enactment of the Colonial Laws Validity Act. Nevertheless, the validity of provisions such as the Victorian provisions has never been doubted. So that the proposition is that it is open to the Parliament of a State, or indeed of a colony, to confer jurisdiction upon a court other than a court of its own creation. So that we submit that there is no impediment so far as the States are concerned in enacting provisions such as section 42(3) of the Corporations Act of the States or of sections 4(1) and (2) of the Jurisdiction of Courts (Cross-Vesting) Act. The real question is whether it is possible for the Federal Court to be the recipient of the grant of the jurisdiction.

If I can then turn to what we say in paragraphs 7, 8 and 9 of our written submissions. The Court will recall that at the earlier hearing questions arose as to why the power of the States to confer jurisdiction upon Federal Courts and the power of Federal Courts to exercise jurisdiction so conferred should be confined to matters within the judicial power or which involved matters which were not judicial or not matters in the technical sense of that term as used in Chapter III. If I can just remind the Court, that was raised at pages 67, 114 and 131 at the previous hearing and it arose again this morning.

Perhaps contrary to what my learned friend the Solicitor-General for Queensland has said, we would submit that a court established under Chapter III by the Commonwealth Parliament cannot be invested with any non-judicial power or with jurisdiction in relation to what I will call a non-matter, whether in the exercise by the Commonwealth Parliament of its powers under section 51 or section 122. Thus it would not be open to the Commonwealth Parliament, in our submission, to confer a non-judicial power upon a Federal Court in relation to a Territory matter or in relation, for example, to an appeal or a matter arising in the Republic of Nauru. Likewise, we would submit, it would not be open to the Commonwealth Parliament to allow a court created by it under Chapter III to exercise a non-judicial power or a power relating to a non-matter. That would, in our submission, disturb the fabric of Chapter III to an extent which is not permissible.

In this connection we would refer the Court to the decision in Kable v Director of Public Prosecutions [1996] HCA 24; 70 ALJR 814. If it is correct, as the Court there held that a State court invested with federal jurisdiction cannot exercise functions incompatible with the exercise by the State court of federal jurisdiction, it would follow that a court established under Chapter III by the Commonwealth Parliament invested with federal jurisdiction could not have a non- judicial power conferred upon it from any source. That, of course, creates problems in relation to the provisions of section 596A and section 596B of the Corporations Law, to which I will come in a moment.

Can I turn thirdly, to the matter which was raised by the appellant in the course of argument and which is dealt with in their written submissions in reply, namely the contention that section 7 of the Corporations Act of New South Wales involves an impermissible delegation by the State Parliament of its legislative powers. The matter is dealt with in paragraphs 13 to 16 of the appellants' submissions in reply. We submit that a provision such as section 7, which appears in all of the State Corporation Acts does not involve any delegation of legislative power. All it does is to operate referentially so as to adopt as part of the law of the particular State, the laws of another jurisdiction as they are enforced from time to time. It remains open to the Parliaments of each of the States to legislate so as to prevent any part of its Corporations Act from operating or continuing to operate as part of the laws of New South Wales, including the provisions of the Commonwealth Corporations Act which are picked up by section 7.

We would submit that it would clearly have been open to the Parliament of a State to have legislated so as to enable its executive to adopt by regulation from time to time, any changes which were made to the Commonwealth Act so as to incorporate those amendments into the laws of the State, in this case, New South Wales. No one, in our submission, would suggest that that involved an unauthorised delegation of legislative power. Indeed, we have observed that that was precisely the method that was adopted under the pre-existing regime, under the Companies Acts.

We pause to dwell on this point, if the Court pleases, because it has implications in relation to other legislation. It has the capacity to call into question the validity of important Commonwealth legislation. The obvious example which comes to mind is section 4 of the Commonwealth Places (Application of Laws) Act 1970 , but perhaps less familiarly, provisions of the Crimes at Sea Act 1979 of the Commonwealth, particularly section 6,8, 9 and 11, which make State laws applicable in off-shore waters.

Finally on this topic, may I add to something that my learned friend, the Solicitor for the Commonwealth said at page 120 of the transcript. My learned friend there referred to the Native Title Act 1903 Case [1995] HCA 47; 183 CLR 373, particularly referring to a passage in the joint judgment at page 487. Could I add to that reference two further references which support the validity of legislation of the kind presently under consideration. Firstly, The Commonwealth v The District Court of the Metropolitan District of New South Wales [1954] HCA 13; 90 CLR 13 and Hooper v Hooper [1955] HCA 15; 91 CLR 529 at pages 536 to 537. If I may remind the Court, The Commonwealth v The District Court was concerned with the provisions of section 39(2) of the Judiciary Act which, of course, has an ambulatory operation, but the Court, at page 22 expressly stated that the section does not delegate any power to the States to invest a court with federal jurisdiction. We would submit that that argument lately raised by the appellants should be rejected.

May I then move to make some observations concerning the power of the Commonwealth Parliament to create courts and to confer or invest jurisdiction in courts so created. As we read the provisions of Chapter III, the power of the Commonwealth Parliament to create a Federal Court is to be found in section 71 and by force of section 71 the court, once created, has vested in it the judicial power of the Commonwealth, though, of course, within the limits of the jurisdiction which may be conferred by the Act which creates the court or subsequently confers jurisdiction.

Just for the sake of completeness, because the Court may be concerned about this general topic of the Commonwealth's powers under Chapter III, could I add three further references which may be of assistance. The first is R v The Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett [1945] HCA 50; 70 CLR 141 in the judgments of Sir John Latham at pages 150 to 155 and of Sir Owen Dixon at pages 164 to 169. Those passages are directed to the powers of the Commonwealth Parliament to establish courts and to define jurisdiction.

The other two cases are, firstly, Collins v Charles Marshall [1955] HCA 44; 92 CLR 529, to which your Honour Justice Gummow referred a short time ago, and the relevant passages are in the joint judgment of the Chief Justice and Justices McTiernan, Williams, Webb, Fullagar and Kitto at page 539 and in the separate judgment of Mr Justice Taylor at pages 560 to 563. The remaining case, your Honours, is Cockle v Isaksen [1957] HCA 85; 99 CLR 155 and the relevant passage is at pages 162 to 165.

If I can then turn to the second-last matter to which I address submissions. At the earlier hearing there was discussion, as there was indeed this morning, concerning the restrictions in the cross-vesting legislation and in the Corporations Law relating to appeals and that matter arose at page 149 and again at pages 159 and 177. If I could just identify the provisions dealing with appeals in the legislation. In the Jurisdiction of Courts (Cross-vesting) Acts the relevant provisions in the State Acts are section 7 and section 13 and in the Commonwealth Act conveniently again at sections 7 and 13.

The relevant provisions relating to appeals in the Corporations Acts are in the State Acts sections 43 and 49 and in the Commonwealth Act at sections 52 and 58. If I can just say a word about section 13 of the State Cross-vesting Acts and section 49 of the State Corporations Acts. Reference was made to these provisions in a general way by my learned friend, the Solicitor for Queensland. If I can just draw the Court's attention to section 13 of the State Cross- vesting Acts. It provides:

An appeal does not lie from a decision of a court -

(a) in relation to the transfer or removal of a proceeding under this Act; or

(b) as to which rules of evidence and procedure are to be applied pursuant to section 11(1).

The only point that we desire to make there is that we would not contend that that provision impeded or precluded an appeal in relation to the identified matters directly to this Court subject to the grant of, of course, special leave.

It is interesting to note that that point was settled by this Court in Peterswald v Bartley [1904] HCA 21; 1 CLR 497, particularly at page 499, part of the decision which has withstood challenge over the years. The Court may recall that the provision in the New South Wales legislation there in question was that the decision in the Supreme Court should be final and without appeal, and counsel rather boldly suggested that that precluded an appeal to this Court and that was summarily rejected unanimously by their Honours comprising the Court. Thus, we would accept that provisions such as section 13 should be interpreted only as precluding appeals within the State hierarchy, and should not be construed as an attempt to preclude an appeal to this Court.

Finally, if the Court pleases, may I say something about sections 596A and 596B of the Corporations Law. The process of reading down these provisions was raised at the earlier hearing, at pages 180 to 190. Now, the reading down process, as was indicated at that stage of the argument, involves first the application of section 15A of the Commonwealth Acts Interpretation Act 1901 to section 56(2) of the Commonwealth Corporations Act provision enabling the receipt of State-conferred jurisdiction. That was, I think, put forward - it may, in fact, have been put forward by your Honour the Chief Justice, but certainly was the position which was adopted in argument, and we would accept that.

Perhaps reference should be made also to section 10 of the State Corporations Act, which is a somewhat unusual provision. I think your Honour the Chief Justice may have drawn attention to the possible difficulty of this section. Perhaps if I can just read it:

Subject to Part 1.2 of the Corporations Law of the New South Wales, the Acts Interpretation Act of the Commonwealth as in force at the commencement of section 8 of the Corporations Act 1987 , applies as a law of New South Wales in relation to the Corporations Law, and the Corporations Regulations, of New South Wales and any instrument made, granted or issued under that Law or those Regulations (other than application orders under section 111A of that Law) and so applies as if that Law were an Act of the Commonwealth and those Regulations or instruments were regulations or instruments made under such an Act.

And the operation of the State Interpretation Act is excluded. Now, the legislative technique here, of course, was to introduce into each State's Corporations Law the Commonwealth Acts Interpretation Act 1989 as a sort of glossary, to be used for the interpretation of the State Corporations Law uniformly. There is a difficulty, however, in calling section 10 in aid to support a reading down of a State provision, such as those which confer jurisdiction upon the Federal Court - section 42(3) - because section 15A is directed to the legislative powers of the Commonwealth, rather than of the State.

What we would say is that section 10 of the Corporations Law needs to be read so as to treat the reference to the legislative powers of the Commonwealth as being, by adaptation, a reference to the legislative powers of a particular State. Now, the Commonwealth has undertaken the task of an analysis of the reading down process which might be required of section 596A and 596B so as not to treat them as conferring any judicial power upon the Federal Court. That is a somewhat detailed analysis, and what I would seek the Court's permission to do is to present that analysis in writing to the Court, which I have here, and to adopt it as part of our submissions, but not to take up the Court's time with the exercise of reading down, which would take rather more time than is available.

BRENNAN CJ: Yes. Thank you, Mr Solicitor.

MR GRAHAM: If the Court pleases, those are the submissions that we desire to put to the Court.

BRENNAN CJ: Mr Solicitor for Western Australia.

MR MEADOWS: May it please the Court, there are three areas that I wish to address. First of all we would refer to our written submissions and rely on them. I propose, as I said, to refer only to three other matters which relate to what we have said in our written submissions. The first point that we would make is that we accept the appellants' contention that as at 1900 section 5 of the Colonial Laws Validity Act reflected what was then the legislative capacity of colonial Parliaments in relation to the establishment of courts and the administration of justice.

However, the limitation which that Act reflected was not a limitation as to the capacity of colonial Parliaments to confer jurisdiction on courts established by another polity, rather it was a limitation confining the operation of those laws within the territorial jurisdiction of the enacting legislature. So, for example, jurisdiction could have been conferred by the Victorian Parliament on a court established by the Parliament of New South Wales, provided the jurisdiction was exercised by that court in Victoria, and if I could refer to our submissions at page 2 and in particular footnote 3. We would accept that the power to make provision for the administration of justice is limited by the term "therein", which clearly refers back to the phrase "within its jurisdiction" so that the law must make provision for the administration of justice within territorial jurisdiction.

However, since 1900, of course, the limitation on legislating with extraterritorial effect has changed, and if one looks at cases, beginning with Croft v Dunphy (1933) AC 156, Union Steamship v King [1988] HCA 55; 166 CLR 1, particularly at pages 10 to 11, and Pearce v Florenca [1976] HCA 26; 135 CLR 507 at 514- 516, it is now apparent that the States can legislate extraterritorially, and in the context of this case to confer jurisdiction on the Court of another polity.

The second point that we wish to make is in respect of the distinction between federal and State jurisdiction. We would say it is important to recognise that the distinction between State and federal jurisdiction relates not to the legislation which is to be considered in the exercise of that jurisdiction but rather the source of the authority to adjudicate. This we set out, with greater particularity, at paragraph 14 of our submissions.

So, what we say is that there are no subject matters or legal questions which do not have the potential to be resolved in the exercise of federal jurisdiction. In limiting the matters which may be the subject of federal jurisdiction section 75 to 77 limit only the authority of the Commonwealth Parliament to confer jurisdiction on various State and Federal Courts. Those sections do not limit the subject matters with which Federal Courts may deal to matters arising under federal law, nor do they prevent the Commonwealth from conferring jurisdiction on a Federal Court to determine matters arising under State law.

BRENNAN CJ: Are you saying that federal jurisdiction is a concept which is wider than that which is covered by Chapter III?

MR MEADOWS: No, we are not, your Honour, because we are limiting ourselves to jurisdiction conferred under sections 75 to 77; but once you have jurisdiction conferred under those sections there is no reason why a court exercising that jurisdiction cannot determine matters under State law if it arises in the proceedings, and not just in respect of accrued jurisdiction but in respect of matters where jurisdiction has been conferred under those sections.

BRENNAN CJ: I thought you opened this part of your submission by saying that there is no subject matter which is incapable of being dealt with under or in federal jurisdiction.

MR MEADOWS: If a court is exercising federal jurisdiction, yes.

BRENNAN CJ: I am not sure that I understand the full purport of that.

MR MEADOWS: Once the court is invested with federal jurisdiction in respect of a matter - - -

BRENNAN CJ: Once it is, then it can range over whatever is necessary for the determination of controversy.

MR MEADOWS: Even if the law applicable is only State law.

BRENNAN CJ: Yes, I see.

MR MEADOWS: For example, the Commonwealth could confer on the Federal Court a general jurisdiction as to all matters between States or residents of different States. Some jurisdiction of that nature has in fact been conferred on the Federal Court in cases of remitter from the High Court under section 44 where, if you have an action between residents of States commenced in the High Court, it might be a simple contract case involving State law only but it can be resolved in the exercise of federal jurisdiction. If I could just refer briefly to the State Bank of New South Wales v Commonwealth Savings Bank of Australia [1984] HCA 41; 154 CLR 579. So we would say that in that context there is no incongruence in State Parliaments being able to confer State jurisdiction on Federal Courts which the Commonwealth Parliament cannot.

KIRBY J: Do you accept that it must be within the context of a matter?

MR MEADOWS: Yes, we do, your Honour. The other matter which we seek to address in some - - -

GUMMOW J: That would not save these sections, would it?

MR MEADOWS: I am only making that as an observation, your Honour, not with particular reference to these sections. The other matter which I wish to deal with relates to the application of section 51(xxxviii), a matter which we deal with in some detail in our submissions in paragraphs 21 to 23. The appellants have conceded in argument that section 51(xxxviii) could be used as a vehicle to cross- vest jurisdiction. If I could refer to what was said by counsel for the appellants at pages 7 and 11 of the transcript in that regard.

We would submit that the power of the Commonwealth Parliament to sanction or authorise the States conferring State jurisdiction on Federal Courts in the present case can be seen to arise under section 51(xxxviii) and that, while the legislation does not expressly refer to the reliance on that provision, it is clear from the terms of the cross-vesting legislation and the corporations legislation which establish these co-operative legislative schemes that the State Parliaments have concurred in the enactment of the Commonwealth provisions sanctioning the exercise of State jurisdiction by Federal Courts.

What we say is that the establishment of an inter-colonial court exercising the jurisdiction of colonial Supreme Courts throughout the Australian colonies is something which prior to Federation could only have been done by the Imperial Parliament. There are a number of examples of inter-colonial courts having been established both by Imperial Act and by Orders in Council. If I draw your Honours' attention to footnotes 40 and 41 on page 12 of our submissions, there are examples set out there. In particular, could I direct the Court's attention to Roberts-Wray's text, Commonwealth and Colonial Law, at pages 219 to 224.

BRENNAN CJ: How does this submission sit with section 128? If what you are saying is right and if it is correct to say, contrary to your argument, that the Constitution does not contemplate this exercise to be undertaken otherwise than under 51(xxxviii), how can it be that 51(xxxviii) can be invoked to produce a situation which the Constitution itself would not have produced, consistently with - - -

MR MEADOWS: Our short answer to that, of course, is that Chapter III does not preclude the investing - - -

BRENNAN CJ: I appreciate that, but if that goes against you.

MR MEADOWS: If one goes to what was said by this Court in - - -

BRENNAN CJ: I mean, if your argument is right, this Constitution can be amended, can it not, under section 51(xxxviii)?

MR MEADOWS: It can.

BRENNAN CJ: And not under 128 at all?

MR MEADOWS: Obviously it can under 128 as well, but there is no reason why power cannot be conferred on the Commonwealth and thereby altering the Constitution, the relationship between the States and Commonwealth in terms of power under section 51(xxxviii). That was expressly contemplated by the founders when they were drafting the Constitution. This is clear from the judgment of this Court in Port MacDonnell Professional Fishermen's Association v South Australia [1989] HCA 49; 168 CLR 340 and in particular - and these passages have already been read to the Court - where at page 377 the Court recited various passages from the Convention Debates in Sydney in 1891 and if I could take your Honours to page 378, at the top of the page the Court said:

In other words, the primary subject to which par. (xxxviii) was addressed was the perceived need to ensure that legislative powers necessary for the purposes of the new nation could be exercised locally notwithstanding that, prior to federation, they were beyond the competence of local legislatures. In that context, there is no valid reason why the words "within the Commonwealth" should be given a more constrictive operation than that which flows from their ordinary grammatical construction.

Further down at about point 6:

Shortly stated, the effect of s. 51(xxxviii) is to empower the Commonwealth Parliament to make laws with respect to the local exercise of any legislative power which, before federation, could not be exercised by the legislatures of the former Australian colonies.

So section 51(xxxviii) can add to or alter powers which are currently contained in the Constitution.

BRENNAN CJ: Or any provision of the Constitution.

MR MEADOWS: Yes, your Honour. Now, as we point out in our submissions - - -

McHUGH J: Except it is a power conferred subject to the Constitution. Section 51(xxxviii) is subject to the Constitution.

MR MEADOWS: Yes, quite so, your Honour, and that is why perhaps section 51(xxxviii) could not be used to empower the Commonwealth Parliament to directly vest State jurisdiction in the Federal Court because that would infringe Chapter III, but it does not, we would say, prevent the Commonwealth sanctioning a State conferring that jurisdiction. One of the things that is important to recognise here - and we set this out in paragraph 22 of our submissions - is that so far as the Australian colonies are concerned the establishment of an inter-colonial court could only have been achieved by the Parliament and not by Order-in-Council and that is because, following the grant of representative institutions to the Australian colonies, the Crown was precluded from using its legislative prerogative powers and also an Order-in-Council could not have been made under the British Settlements Act as the Australian colonies were not British settlements for the purposes of that Act.

So, we have a situation, we would submit, where as at 1900 the colonial legislatures could not have made laws with extraterritorial effect, and this would have prevented them from establishing an inter- colonial court themselves. As we say, the limits on the capacity of the colonial Parliaments to establish courts was reflected in section 5 of the Colonial Courts Validity Act. So, we would say that for the Australian colonies, only the legislature of the United Kingdom could have established an inter-colonial court with limited jurisdiction such as the Federal Court has. For example, it could have established an inter-colonial court where disputes between the residents of different colonies could have been adjudicated.

Having done that - established that court - it would then have been up to the self-governing legislatures of the colonies to decide whether they would confer jurisdiction on this inter-colonial court in respect of those matters. Because of the capacity of the colonies to self-govern, it would not have been open to the Imperial Parliament to have imposed that on the colonies, but the colonies themselves could have conferred jurisdiction on that court. But that would have required the sanction of the Imperial Parliament, the creator of the court.

Now, we say that the Commonwealth's sanctioning of the conferral by the States of jurisdiction on the Federal Court is directly analogous to that situation and that, therefore, this exercise can be seen and supported as an exercise conducted under section 51(xxxviii). To put it shortly, this is something which, prior to Federation, only the Imperial Parliament could have done - that is, sanction the conferral of jurisdiction on an inter-colonial court - and that, therefore, it is something which the Commonwealth can do, the States having the capacity to vest jurisdiction in the courts of another polity. If it please the Court, they are our submissions.

BRENNAN CJ: Thank you, Mr Solicitor. Mr Solicitor for South Australia.

MR SELWAY: If it please the Court, we rely upon our written submissions, and if I could draw the Court's particular attention to paragraph (1) and (1)(a), South Australia and Tasmania do not accept that this legislation can be supported under section 51(xxxviii) of the Constitution. We do accept that section 51(xxxviii), if it had been used, could have achieved this effect. But we do not say that this legislation involved the relevant steps under 51(xxxviii).

Your Honours, these sorts of co-operative arrangements seemed to be reasonably commonplace in respect of executive power. In respect of the Corporations Law, for example, section 31 and 37 of the State Acts, section 46 of the Commonwealth Act and section 11 of the Australian Securities Commission Act of the Commonwealth make provision for the cross-vesting, if you like, of executive powers. A similar example can be found in the competition area, and so far as South Australia is concerned, sections 25 and 27 of the Competition Policy Reform (South Australia) Act 1996 to be read with section 150F of the Trade Practices Act 1900 gives a cross-vesting scheme for executive power under that scheme. More generally, section 80 of the Public Service Act of the Commonwealth - - -

BRENNAN CJ: Do we need to worry about the executive schemes?

MR SELWAY: The point we wish to make, your Honour, is that there is only one issue here and, with respect, it is not all that clear from some of the submissions that have been put and some of the argument. The only issue here, in our submission, is the inferences to be drawn from Chapter III. The question of whether this matter is incidental if it was considered in respect of executive power, we say it clearly would be. The nature of co-operative federalism would be enough of an answer to justify these sorts of arrangements in respect of executive power. The issue then, we say, is what implications, in particular what negative implications, arise in respect of judicial power?

BRENNAN CJ: Those are matters which perhaps you might develop at a quarter past 2.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.18 PM:

BRENNAN CJ: Yes, Mr Solicitor for South Australia.

MR SELWAY: If it please the Court, immediately before lunch I put the submission that there were a number of examples where this sort of co-operative arrangement had been entered into in respect of executive power and had submitted that in respect to the executive power, the Commonwealth could support its consent on the basis of the incidental power. That is to say, the Commonwealth's capacity to create and maintain an executive office necessarily carries with it, as an incident of that, the capacity of the Commonwealth to consent to that Commonwealth executive officer performing a State function under State legislation in respect of a co-operative scheme.

Our submission is that the only feature that can distinguish that arrangement for executive officers from the one in respect of the exercise of judicial power is any implication arising from Chapter III. So viewed, we say the essential issue here is whether there is any reason why Boilermakers should not be extended, if you like, to preclude either a State conferring jurisdiction on a federal court, or the Commonwealth consenting to such conferral.

What we say is that any Boilermakers implication has to be considered in the context that Australia has, under the Constitution, an integrated court system. That, we say, is a necessary consequence of the decision of your Honours Justices Gaudron, McHugh and Gummow in Kable. Your Honour Justice McHugh, for example, at 138 ALR 619 made the point that the Constitution intended that:

Australia should have an integrated system of State and federal courts administering a single body of common law -

That was in the context of the situation pre the abolition of Privy Council appeals, but we would say now that those appeals have been abolished the system remains an integrated court system.

What we say is that the Boilermakers implication must be understood in the context of that integrated court system. So understood, we say that there is no implication, and can be none, that the States cannot confer jurisdiction on Federal Courts, or the Commonwealth cannot consent to such a conferral, because those two steps achieve the constitutional purpose, and the constitutional objective of an integrated court system, rather than denying it. In that sense, what we say is that Boilermakers does not need to be extended the next step. The next step, which we say would diminish the nature of that integrated court system, need not be taken.

Of course, that does not mean that there are no limitations upon what jurisdiction can be conferred. In particular, for the reasons given in Kable, the implication identified by this Court in Grollo and in Wilson must apply. In that regard, we would adopt paragraphs 16 and 17 of Western Australia's submissions. But what we say is that there is no limitation on the basis that only the Commonwealth Parliament can confer any jurisdiction on Federal Courts; that that implication, if that is the implication to be derived from Boilermakers, is inconsistent with what we say is the implication identified by at least three of your Honours in Kable.

Your Honours, in respect of the corporation scheme, the Commonwealth is not limited in its legislative power to the incidental power. It can also rely upon the corporations power and the territories power. In that regard, we adopt paragraphs 3.2 to 3.4 of New South Wales' written submissions. We would also adopt the submissions of Victoria, New South Wales, and of the Commonwealth on the question of whether the New South Wales Parliament has abdicated its powers.

Your Honours, subject to any matters your Honours wish to raise with me, those are the submissions for South Australia and Tasmania.

BRENNAN CJ: Thank you, Mr Solicitor.

MR SELWAY: If it please the Court.

BRENNAN CJ: Mr Spigelman.

MR SPIGELMAN: Your Honours, Mr Keane addressed the Court primarily on the express incidental power in section 51(xxxix). We would propose to primarily address ourselves to the power to create courts which is found in section 71. Much of his analysis I adopt without repeating it. It would apply in the same way, namely, we say, all of what he said as to the incidence of the incidental power in section 51(xxxix) also applied to what we say is the implied power in 71 is an implied power to create a court. Could I just give your Honours a reference to Boilermakers 94 CLR 282 at about point 2 that section 71:

contains, in the words `such other federal courts as the Parliament creates,' the implied grant of power to create Courts other than the High Court -

putting aside territory courts -

There is no other grant of that power -

that it is to be implied in 71. That we say is a crucial distinction and we will come to it in a moment between the position of this Court and any other federal court. This Court is created by the Constitution. Other federal courts are created by the Parliament. Our primary submission is that it is an essential incident of the power to create to determine what the court will do. The Constitution creates this Court and establishes in section 73, 75 and 76 what this Court will do. It is inherent in the power to create which is to be found in section 71 that the Commonwealth Parliament can decide what its creations will do. This, of course, is subject to the introductory words - and I have to address them - of 71 itself, namely, the vesting of "The judicial power of the Commonwealth" are the opening words and also to the construction of 75 and 76 by reason of the opening words of 77 as words of whether or not that creates States exhaustively what can be vested in a federal court.

Now, our primary submission is as I understood Mr Keane's primary submission to be and that is that the Act in question here, in particular 56(2) of the Commonwealth Act, does in fact exercise a power that is incidental to the investing of federal jurisdiction in the Federal Court, as we put it in paragraph 3.2 of our written submissions, that it is incidental to the exercise of federal jurisdiction for the Commonwealth to consent to its courts exercising such additional jurisdiction as will ensure that the operation of those courts is not bedevilled by arid technical arguments as to whether or not there is federal jurisdiction. All that Mr Keane said about accrued jurisdiction and his reliance on cases like Stack v Coast Securities apply here.

Your Honour the Chief Justice asked him why would that not empower the Commonwealth to directly grant such jurisdiction because it is incidental to the power that the Commonwealth has. We say not without the consent of the States by reason of something like the Melbourne Corporation doctrine. It is a slight adaptation of it. That is why it would not extend to the Commonwealth - - -

BRENNAN CJ: How like the Melbourne Corporation doctrine is it?

MR SPIGELMAN: We say that the imposition on Federal Courts of State jurisdiction without the consent of the States would interfere with a basic power of the States in its capacity as a separate polity.

BRENNAN CJ: It does not interfere with that power; it does not interfere with the capacity to dispose of litigation.

MR SPIGELMAN: Yes, it does by taking it away from their own courts without their consent.

BRENNAN CJ: It does not take it away; it just vests it in the Federal Court.

MR SPIGELMAN: Yes.

BRENNAN CJ: It is concurrent.

MR SPIGELMAN: It vests their jurisdiction in a court which is other than a court of their creation without their consent.

BRENNAN CJ: That is right.

MR SPIGELMAN: We say that is too much of an interference with the existence of a separate polity constituted by the States in the federal system. As your Honours are aware, there are a handful of cases in which that line has been crossed and we submit this would be such a crossing if there were an attempt to do it without the consent of the States. The incidental power in this case is of course similar to that that the Court found in Duncan, and that was that the Commonwealth could create a Commonwealth tribunal with a capacity to receive jurisdiction from someone else. We say so here that is the nature of the scheme.

The opening words of section 71, namely "The judicial power of the Commonwealth shall be vested", may or may not be words of limitation. If they are words of limitation, then what I have just said holds, namely, if it is incidental to granting a federal jurisdiction, pure and simple, to give it the capacity to receive non-federal jurisdiction in circumstances where that renders the exercise of federal jurisdiction more efficacious, then that is consistent with the opening words of section 71 being words of limitation.

GUMMOW J: What is the federal jurisdiction in this case that is rendered more efficacious? There is not any. That is the whole problem.

MR SPIGELMAN: Sorry. That depends on alternative - there is the territories power and it is not federal jurisdiction in that sense. It is plenary, namely - I am coming to that in a moment when I discuss the territories - - -

GUMMOW J: No, one had the Federal Court sitting there and on the face of it, it seemed to be in receipt of federal jurisdiction under the original Corporations Law.

MR SPIGELMAN: That is right.

GUMMOW J: That did not come to effective fruition because of the Court's decision; that is how it was seen. So there was no federal jurisdiction. This is a means of giving another jurisdiction, not incidental to the federal jurisdiction, but by reason of the absence of federal jurisdiction

MR SPIGELMAN: Let us put a case with which your Honour is familiar. The - - -

GUMMOW J: I am just worried about these sections, that is all.

MR SPIGELMAN: Yes. The case with which your Honour is very familiar, the NRMA Case, where there was an action under section 52 of the Trade Practices Act and a parallel action under - it was almost the same provision under the Corporations Law. It rendered more efficacious the handling of the jurisdiction under the Trade Practices Act by your Honour to be able to deal with both matters together and without any argument as to accrued jurisdiction or anything like that. I am not looking at the winding up petition per se, though unquestionably that could also be accompanied by other causes of action. In the Corporations Law itself there are overlaps with other causes of action of which the Trade Practices Act is an example.

It is in that respect we say that by reason of the fact that the Constitution creates this Court, we say the Parliament - that there is a difference between the applications of section 75 and 76 to this Court, in the sense that we do not argue that they are not exhaustive of the original jurisdiction but that they are not exhaustive of the jurisdiction of other courts notwithstanding the opening words of section 77, namely those words which pick up 75 and 76.

With respect to any of the matters mentioned in the last two sections the Parliament may make law -

We say these should be construed in accordance with the current doctrine of the Court as to the scope and application of the statutory construction principle of expressio unius. Your Honours are well aware of it; all of your Honours have considered it in recent years in a number of cases, and they are restrictive. It is a - I think of PMT Partners[1995] HCA 36; , 184 CLR 301, Wentworth v NSW Bar Association [1992] HCA 24; 176 CLR 239. In the first case your Honours Justices Toohey and Gummow considered it at page 320. Your Honours the Chief Justice and Justices Gaudron and McHugh at page 311; in the second case, in a joint judgment of four of your Honours at page 250.

Particularly, is the Constitution - that particular doctrine of statutory construction is to be applied with particular care in the context of a Constitution. Your Honour Justice McHugh in McGinty, of course, emphasised that this was a statute we are construing, but in the Constitution such references as Russell v Russell [1976] HCA 23; 134 CLR 495 at 539 and a line of other cases indicate that one should take particular care to read down a power by reference to other powers, and the power I am talking about here is the power to create a court, which is found in section 71. One should not read that down by reference to other provisions. Other cases in this line are Re F [1986] HCA 41; 161 CLR 376 at 387; P v P [1994] HCA 20; 181 CLR 583 at 600.

In that respect, what are the opening words of section 7 directed at? We submit they are directed at ensuring that there is no doubt that the matters in section 75 and perhaps section 76 can be invested in a court other than the High Court. If section 77(i) did not exist, it would be strongly arguable that section 75, in which the Constitution itself invested jurisdiction in this Court - not Parliament under section 76, but the Constitution - would be strongly arguable that no other federal court could exercise that jurisdiction. Without those words, namely, expressly stating that section 75 was a matter about which the Parliament could make laws defining the jurisdiction of a court other than this Court, at least section 75 and probably, but with less force, section 76, could be seen to be the areas of jurisdiction not permissible to be invested in a court other than this Court. That, we say, explains why this had to be said, at least with respect to section 75.

I acknowledge section 76 is weaker in that respect, but where the Constitution, itself, has provided jurisdiction, there is a strong argument that no other court could have that jurisdiction, and section 77 put that beyond doubt that another court could have that jurisdiction.

Similarly, with respect to placitum 77(iii) invests - why was it necessary to make express provision for this, your Honours have had circulated additional authorities by us, and I hope your Honours have that. It is a document headed "Further Authorities for the Attorney- General for New South Wales (Intervening)". Could I just take your Honours briefly to the first section of that, under "Commonwealth Power". The reason why it was important to have 77(iii) is because it appeared, or at least was uncertain what the American position was at that time.

In Quick and Garran, at page 803, which we attach, it was clearly stated that the Americans had no ability to invest State courts with that jurisdiction. And in the Convention Debates, at page 348, in Melbourne, Mr Wise, I think, said:

This gets rid of the doubt that was raised in the United States.

That is at point 9 on the first column of the attachment. So, there was either a doubt or a certainty about what the American position was and, as Quick and Garran put it, 77(iii) put it beyond doubt in Australia. The position in American at that time was Prigg v Pennsylvania, to which we give the reference - was against the proposition that there could be any such vesting of federal jurisdiction in a State court. That was not really eventually overruled until Testa v Katt, although the process had started by Claflin v Houseman. And in Felton v Mulligan, at page 393, Justice Windeyer dealt with this matter.

BRENNAN CJ: What is the reference to Felton v Mulligan?

MR SPIGELMAN: It is on that list; [1971] HCA 39; 124 CLR 367, at 393. Now, that is why 77, we say, was expressed in the way it was. 75 and 76 is exhaustive of this Court's jurisdiction because the Constitution creates this Court. 77 should not be construed so as to make 75 and 76 exhaustive of another court's jurisdiction for the reasons we have referred to.

One matter that has been mentioned both on the last occasion and today as to what are the limits on the scope of what the States can vest in a federal court - is it limited to questions of judicial power? During the course of argument this morning, your Honour Justice Gummow suggested, well, how can that be relevant to this case? That assumes away, we would submit, the argument on 596A and 596B that others have put, and it has been put that that does not vest other than judicial power as a matter of construction, that is all related to a process supervised by the Court. Or, alternatively, it has been put that it should be read down.

So, we say it is still relevant for those of us like New South Wales, who submit contrary to Queensland that, in fact, there are limitations on what the State can convey, and we say where does one get that? We say one gets it from section 71 itself. Section 71 occurs in a context of clear separation of powers - the structure - section 1, legislative power; section 61, executive power; section 71, judicial power - and it commences with the words "The judicial power of the Commonwealth." We say that one can infer from that structure and those words that this power that I am relying on here, namely, implied power to create a court, is subject to a restriction as to judicial power.

It may also be subject to a restriction as to matters - that comes from 75 and 76 - if there is in truth, as some have said, a difference between matters and judicial power, that "matters" is narrower than "judicial power". However, we would remind your Honours of what Chief Justice Griffith said in Huddart Parker v Moorehead [1909] HCA 36; 8 CLR 330 at 357 where he defined judicial power - and this has frequently been quoted with approval. He defined judicial power as "the power to decide controversies". That of course uses the American word for "matters", or one of them, "cases and controversies". It may be if that is the definition of "judicial power", that there is not a lot of difference between "judicial power" and "matters", although there are a number of references in the judgments which suggest that "judicial power" is broader than "matters". So, in our submission, there is a restriction of the character that a number of us have put as to what can be invested and it will prevent the Federal Court exercising something other than judicial power.

Finally, your Honour Justice Gummow this morning and Justice McHugh on the last occasion made a reference to section 73, suggesting that there was an implication there that the structure of the appellate jurisdiction was such as to argue against this third category, namely a category of State jurisdiction, if I could refer to it as such. Your Honours, we say that is not so. I take your Honours to section 73(ii). It is not the case that this section distinguishes between courts exercising federal jurisdiction on the one hand and the Supreme Court on the other. In order to say there was an inconsistency of the character both your Honours referred to, one would have to have a distinction of that character. There is a threefold distinction in this. It says:

Of any other federal court -

that is other than the High Court -

or court exercising federal jurisdiction; or of the Supreme Court -

This does not assume that the Federal Court only exercises federal jurisdiction; it does not assume that. It does not say, for example, "any other" - - -

GUMMOW J: Does not Collins v Charles Marshall say just that?

MR SPIGELMAN: We submit it does not. I do not have it with me, your Honour. It does not use the words which appear in 71. If one looks at 71:

in such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction.

The second "other" is not present in 73(ii). It does not say, "any other federal court or other court exercising federal jurisdiction". I am not saying that is going to determine anything, but the construction for which we contend we submit is open, namely this, that there is no inconsistency between the proposition that a Federal Court can apply this kind of State jurisdiction, to use the shorthand, and the provisions of section 73.

McHUGH J: Is not the drafting history of 77 against your argument? Originally clause 77 was clause 76. Instead of:

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

it was within the limits of the judicial power the Parliament may from time to time define the jurisdiction to be exercised by the Federal Courts. They went out of their way to ensure that defining the jurisdiction be "with respect to the matters mentioned in the last two sections".

If they had done it the formal way, then I may have had no argument, I think. In any event, your Honour, I do not think I can assist you. I am not aware of the reasons why the change was made. No doubt there was some reasons given and I do not think I can speculate on my feet, or should speculate on my feet what that might have been. We would submit - - -

McHUGH J: I think one of the reasons was that there was a concern that if you spoke about investing judicial power then once you invested it you invested the whole of the judicial power and you could not cut it back in any way. So I think - - -

MR SPIGELMAN: That would not be relevant, we would submit, to the contention that we are now making.

McHUGH J: But then to ensure that they are only invested with respect to matters they adopted the form in 77.

MR SPIGELMAN: We submit that that restriction exists anyway, inter alia, by reason of the fact that the power that I rely upon is in Chapter III, namely the power I am primarily focusing on is the power to create a court, which is in 71. That would be read down, we submit, by the introductory words of 71, which have the same kind of thrust as your Honour has just put to me, and may also be read down by the other provisions, particularly in Chapter III. They are - - -

McHUGH J: I thought you were arguing - perhaps I misunderstood your argument - but you are arguing that because of section 71 federal courts can be created with non-federal jurisdiction.

MR SPIGELMAN: As an incident of the power to create a court, the Commonwealth Parliament can consent to a court exercising such jurisdiction.

McHUGH J: It cannot invest it itself?

MR SPIGELMAN: That is not our submission but I dealt with - there is a step which I admit has got a certain logical force to it to say, "If it is an incident of the power that the Commonwealth Parliament has, why can't it do it itself?" We submit that that is confined by the whole structure of the Constitution in terms of the creation of States, not just by Article III. Given that, if that is not right, then there may be no stopping point that I can point to. I think Mr Keane made some submissions on this matter but he did not make that Melbourne Corporation-type submission.

Your Honours, could I just carry on - I am aware of the time. He made a reference to the territories power. We adopt what was said by the respondent in that respect. We would emphasise that one of the principal objectives of the cross-vesting scheme was - and I quote from the explanatory memorandum:

to enhance the national nature -

of the laws. That is found in paragraph 5, appeal book 45, paragraph 54 to 55 appeal book 62. We reiterate, the territory has a direct interest in the existence of national laws. May I say obviously in this respect I am addressing only the companies law scheme and not in any respect relevant to the general scheme. To ensure that there is a single national corporations law which is administered both by the executive and the judiciary in a single integrated scheme is a matter which is a law for the government of the territories. The best example of that is, of course, the significance of the economic integration of Australia, which this Court emphasised in Capital Duplicators [No 1] as one of the objectives of the Constitution.

- It is very common, for example, in a winding-up situation to have a parent or a subsidiary which is incorporated, for example, in the ACT, and yet other companies are spread quite widely. In the days of stamp duty specials to Canberra it was very frequent to have companies incorporated in the ACT and some of them have grown into the country's largest corporations since that time. So that kind of economic integration indicates why a national law which is both administered and the subject of judicial decision in an integrated manner is a matter for proper decision as a government of the law of the territory.

We also relied in the alternative on the corporations power. We appreciate that section 3 and the long title of the Commonwealth Corporations Act refers to a law for the government of the ACT. Obviously that uses the words of section 122, but we submit if we are wrong and the territories power does not suffice to support section 56(2), then it was the intention of the Parliament to adopt what other support it can, including the corporations power. So we put corporations power in a sense in an alternative to the territories power, that if it was not the territories power directly then it was the intention of the Commonwealth when making a law with respect to the government of the ACT to invoke such other powers as were available to it and relevantly of the corporations power.

Section 7 of the New South Wales Act has been attacked as an impermissible delegation. Could I go back to the document I mentioned earlier, which was our additional authorities. Native Title Act Case and Hooper v Hooper have now been mentioned by a number of counsel. In addition to that we would point out that the identical issue has in fact arisen with respect to Commonwealth legislation for Commonwealth places and that is the third reference on the list. It is the Full Court of South Australia R v Holmes 93 CLR 425 at pages 406 to 7 and 411 to 412 and the validity of the Commonwealth Places (Application of Laws) Act was unanimously upheld, even though it had this ambulatory connotation, and in that case a number of US authorities are referred to and we would submit that they are to the same effect.

Additionally, the same point has been argued and similarly rejected in the Supreme Court of Canada and that is Coughlin v Ontario Highway Transport Board (1968) SCR 569. Now, similar issues do arise under section 64 and 79 of the Judiciary Act and this Court has found that 64 is certainly valid in a context in which it is said:

The section is ambulatory, and is therefore capable of applying rights resulting from changes made to State legislation after s. 64 was enacted.

That is a quote from the last authority there, Evans Deakin Industries [1986] HCA 51; 161 CLR 254 at 263. Finally on this point, paragraph 16 of the appellant's submissions in reply say that it is not clear that Native Title Act and Hooper applied to amendments made from time to time. We say that is wrong. That is exactly the facts of Hooper. Look at 537 where the court makes reference to the ambulatory nature of the power. Finally, your Honours, there is the question of State power, the Western Australian submission that there is an absence of power to pass extraterritorial laws. Finally, that some cases suggested that until Croft v Dunphy in 1933.

In Union Steamship Company v King 166 CLR 12 point 5 this Court said: that the High Court confirmed that the State always had power, and I emphasise that - had power - to pass extraterritorial laws; namely, that the earlier authorities, whatever they said at 1900 were wrong and were always wrong. On that basis there are other reasons why there is State power but we do not add anything further to our written submissions in that regard. If the Court pleases.

BRENNAN CJ: Thank you, Mr Spigelman. Mr Douglas.

MR DOUGLAS: If the Court pleases. We have already had the opportunity of putting a number of submissions in writing in reply and to that extent we do not need to repeat them orally. There are a few matters which have arisen this morning. As we would see it, Mr Spigeman's argument ignores the preparatory words of section 77 of the Constitution with respect to any of the matters mentioned in the last two sections. The argument seems to assume that either the power under section 77(i) is one to make laws defining the jurisdiction of any federal court generally, without reference to the subject matters in sections 75 and 76, or that alternatively, the power is one to make such laws dependent upon the consent of the States.

As we would see it, the intermediate position is one which has no sanction in the Constitution at all, and the idea that the jurisdiction of a federal court, other than a High Court, could effectively be the jurisdiction of a court of Kings Bench was something which was dealt with very early in the jurisprudence of this Court. I think in the Tramways Case [No 1] Mr Justice Isaacs said something about that, and that was in relation to the High Court, but certainly, as we would see it, it would be equally referable to any other federal court established under section 71.

The difficulty with the argument raised by the learned Solicitor- General for Queensland is that it assumes that Boilermakers can be outflanked by investing State judicial and non-judicial power in the Federal Court. We would rely, in this context, upon what was said in Marbury v Madison in relation to the power of Congress to invest additional, original jurisdiction in the Supreme Court of the United States. On that occasion Chief Justice Marshall said that "Affirmative words - - -

BRENNAN CJ: What is the reference, Mr Douglas?

MR DOUGLAS: The reference is [1803] USSC 16; [1803] 5 US 137 at 174 where it was said that:

Affirmative words are often, in their operation, negative of other objects than those affirmed; and in this case, a negative or exclusive sense must be given to them, or they have no operation at all.

We would rely upon what is said there in a very similar context to support our argument as to what the proper interpretation is of Chapter III of the Constitution, and in particular, of sections 76 and 77.

GUMMOW J: What page in Marbury v Madison?

MR DOUGLAS: At page 174, your Honour.

GUMMOW J: Thank you.

MR DOUGLAS: At the foot of the second column on the right-hand side, in the report which I have.

BRENNAN CJ: The only page we do not seem to have.

GUMMOW J: The pagination is different.

MR DOUGLAS: Sorry, the pagination is different; it depends upon whether you have Cranch or the United States Reports. I think in the United States reports it might be on page 171 but if you follow - - -

McHUGH J: No, page 173, I think.

MR DOUGLAS: The passage I referred to is between the marker 174 and 175 on a report which I have which I think is the Supreme Court Reports - it is Cranch, is it? I have Cranch. It is on page 171 of Cranch but I think it is between 174 and 175 of the US reports.

McHUGH J: That is right.

MR DOUGLAS: A number of the arguments also ignore the decision of Collins v Charles Marshall [1955] HCA 44; 92 CLR 529 where the relevant provision was held invalid on the ground that it conferred an appellate jurisdiction on the Court of Conciliation and Arbitration from State courts exercising State jurisdiction, and also on the ground that the jurisdiction conferred did not fall within section 77(i) of the Constitution.

So, we wish to say no more about those matters. The question of severance has been raised, and the learned Solicitor-General for Victoria made some submissions in relation to that. We have addressed the question in paragraph 17 and following of our written submissions. It seems to us that, on a proper construction of the relevant provisions, section 15A of the Acts Interpretation Act of the Commonwealth, as applied by section 10 of the State Act, only applies to the provisions of a corporations law; that is, what is contained in section 82 of the Corporations Act, which is injected into New South Wales law by section 7 of the Corporations (New South Wales) Act .

All of the submissions against us seem to assume that you commence the task of severance at sections 596A and 596B of that law, and apply section 15A of the Acts Interpretation Act 1988 as injected into New South Wales law by section 10 of the State Act. As we would see it, one has to deal at the level of section 7 firstly, and determine whether any part of the law injected into New South Wales law by section 7 is invalid. Now, it may be that that inquiry is not necessary because of the words of section 7 which say:

The Corporations Law set out in section 82 of the Corporations Act as in force for the time being -

(a) applies as a law of New South Wales -

So, pre-existing questions of invalidity, such as the validity of a law as a law for the government of a Territory may not be engaged, you may be just dealing with the law as set out, regardless of its validity. If you get beyond that hurdle, you really then have to come to section 42, and in section 42 and each of its subsections it purports to confer jurisdiction in civil matters, which is defined as being distinct from criminal matters in a number of courts, including the Federal Court, but also including the Supreme Court of New South Wales, the Supreme Court of the other States and, I think, the Family Court.

We would say that at that level you do not look at section 15A of the Acts Interpretation Act as applied to New South Wales law by section 10 of the New South Wales Act but, rather, you look to section 31 of the Interpretation Act of New South Wales and see whether, in fact, section 42, and in particular 42(3), is a valid law. Now, it refers to civil matters in a way which is indistinguishable from the civil matters in respect of which jurisdiction is conferred upon courts such as the other State courts and the Family Court.

We would say that there is no implication that one can see in that section which would enable you to delineate on one side of a line, and on the other, which civil matters are intended to survive constitutional challenge such as this. So that, if, in fact, we are correct in arguments, the whole of subsection 42(3) falls and you never get to the stage of actually trying to put a blue pencil through 596A and 596B.

Another matter has been raised in relation to the constitutional validity of section 7 of the Corporations (New South Wales) Act pursuant to the supplementary section 78B notice which we served during the course of the previous hearing. It is not strictly speaking a matter of delegation because it is not a situation in which there is a delegate in the same way as there was in the Capital Distributors Case. It is more akin to the situation which was analysed in Hooper v Hooper and in the District Court case.

It is distinguishable from both of those cases, and if in fact what is done here can be validly done, as we would see it, it is a step beyond the decisions of Hooper and The Commonwealth v The District Court, because what happened in Hooper was that a right was given under federal law to exercise rights which already existed under State laws but which may not have been able to be accessed by the person who was resident in a State for a particular period of time. It was not a situation in which you had one Parliament effectively saying, "Our laws shall be what the Parliament of another State says it shall be", or, "Our laws shall be what the Commonwealth Parliament says it should be."

It was a situation in which you were given a right, under federal law, to have access to rights which existed under State law in circumstances where you may not otherwise have had those rights. Certainly it made it a matter of federal law but it is a distinguishable situation. As we would see it, it is also distinguishable from The Commonwealth v The District Court Case, because that was a case involving section 39 of the Judiciary Act. It concerned the jurisdictional limits which existed from time to time in the District Court and someone boldly argued that the relevant jurisdictional limit should be [sterling]200 and not [sterling]1,000. That is not, as we would see it, a strictly analogous situation. When one reads the reasoning of that decision, as we would see it, it does not provide a sanction for what is being done here. We would see the case as involving the Commonwealth Places (Application of Law) Act, as being in precisely the same context.

The learned Solicitor-General for Western Australia, in relation to our argument about the constitutional powers of the States, sought to suggest that the limitations in section 5 should be read territorially. If one were to give it the interpretation which he suggests it would seem to us that his submission necessarily leads to a situation that the New South Wales Parliament could make laws conferring jurisdiction upon the Federal Court everywhere but in New South Wales. That would not appear to us to be the correct interpretation to place upon it, and we would revert to the arguments which we have made in-chief in relation to that matter.

The Commonwealth and the States seek to support this scheme as one which can be supported by reference to the other elements in the co- operative scheme. The challenge which we make here is to the validity of subsection 42(3) of the New South Wales Act and subsection 56(2) of the Commonwealth Act. But if in fact reliance is going to be placed upon the scheme as a whole, other sections come into play in order to determine whether in fact those sections are valid too. Reference has been made to a number of these in argument but we would just like to collect them, if we could.

One of those is subsection 42(2) of the various States Acts, which purports to affect the limits of jurisdiction of a Supreme Courts to the other States. Subsection 43(2) of the various State Acts seeks to restrict appeal from the Federal Court exercising a jurisdiction purported to be conferred on a Federal Court by subsection 42(3) of the various State Acts, and subsection 42(1) of the various State Acts with respect to the conferral of jurisdiction on the Supreme Court of the Australian Capital Territory would also, as we would see it, be invalid if we are correct in the argument which we ran about the limits which exist upon State constitutional powers. Alternatively, viewed as part of a co-operative scheme subsection 42(1) is invalid because there is no requirement to exercise for jurisdiction which invoked.

May I apologise for not having a copy of it and I could provide a copy in due course, but I will direct the Court's attention to section 48A(3) of the Australian Capital Territory (Self-Government) Act which provides that:

The Supreme Court is not bound to exercise any powers where it has concurrent jurisdiction with another court or tribunal.

Those are the submissions which we would wish to make in reply in addition to the submissions which we have put in writing, if it please the Court.

BRENNAN CJ: Yes, thank you, Mr Douglas.

MR DOUGLAS: One matter which has been drawn to my attention. I understand that if we want a special order for costs against the interveners we had to make an application in relation to that. I think Mr Robb may join me in such an application. The submissions which he made and which we have made would not have taken more than a day and the matter has become a three-day matter as a consequence of intervention and we would seek that a special order be made in relation to the costs of that intervention.

BRENNAN CJ: If you should succeed.

MR DOUGLAS: If we should succeed, if it please the Court.

BRENNAN CJ: What do you say about that, Mr Robb?

MR ROBB: We make application to your Honour.

BRENNAN CJ: We should hear from the interveners as to what they have to say about it. First of all the Commonwealth.

MR DOUGLAS: Your Honour, could I just correct one thing I said?

BRENNAN CJ: Yes.

MR DOUGLAS: Irrespective of whether we succeed, your Honour. I understand the section gives power for such an order to be made irrespective of success and as we would see it the hearing has been elongated by intervention. It is a matter of considerable public importance and it is a case which would impose considerable costs upon private litigants, especially when one considers that it has gone for three days when it could have finished within a day were it not for intervention.

TOOHEY J: Is it the costs incurred by reason of the intervention and the prolongation of the hearing?

MR DOUGLAS: I think that is a reasonable request to make.

TOOHEY J: As you expressed it, Mr Douglas, it rather sounded like costs at large.

MR DOUGLAS: I had in mind that in any event a special order be made for costs for two days of the hearing in favour of the appellants and the respondent on the broad view that otherwise it was a one-day matter.

BRENNAN CJ: So that if you should succeed then you would have an order for costs in relation to one day against Mr Robb and then an order for costs in relation to two days as against the interveners?

MR DOUGLAS: Or alternatively we could have an order for the whole of the costs against Mr Robb and then Mr Robb would be entitled to - in a Bullock order sense, be entitled to recover the whole of those costs against the interveners.

BRENNAN CJ: Yes.

KIRBY J: If you succeed, leave aside the cost question, what orders can be made disposing of the proceedings? Are they made clear in your written submissions?

MR DOUGLAS: I believe that has been made clear in my written submissions.

KIRBY J: Because presumably the Federal Court, on your submission, having no jurisdiction in the matter could not be returned to them?

MR DOUGLAS: Yes, that is our submission.

KIRBY J: Why would one send the matter back to a court that has no jurisdiction?

MR DOUGLAS: I have a lot of sympathy for that view. It is just that I think early in this appeal - - -

KIRBY J: What order do you actually seek?

MR DOUGLAS: It is in the written submissions and I just do not have them here at the moment, your Honour.

KIRBY J: Is that posited on an assumption that the matter can go back to the Federal Court?

MR DOUGLAS: The question does arise as to whether we not being the company can set aside the liquidation of the company but of course, if the Court never - - -

GUMMOW J: The Full Court of the Federal Court was seized of some questions on the special case. They were answered one way. You want them answered the other way.

MR DOUGLAS: That is as we see it, your Honour.

GUMMOW J: That is it.

MR DOUGLAS: Yes.

TOOHEY J: Well, is it? If you look at page 295, you do, I think, in one of your answers use the expression "matter remitted to the Federal Court".

MR DOUGLAS: I did correct that orally.

TOOHEY J: Did you?

MR DOUGLAS: I think Mr Spigelman in his submissions expressed some views about it. Essentially what Justice Gummow has said is correct, and that is that we would wish to have the matter remitted back to the Federal Court. Then the question as to - - -

GUMMOW J: We are not remitting anything; we will just be allowing the appeal.

MR DOUGLAS: I am just answering the question. Then another question would arise, I would imagine: if the order for liquidation of the company was made without jurisdiction, whether that order could be set aside. Then there are a number of summonses which have been issued to us and a different situation arises there because we are the party who has been summonsed in the liquidation and - - -

KIRBY J: But all that is incidental to the alleged conferral of jurisdiction on the Federal Court, is it not?

MR DOUGLAS: It is, yes.

KIRBY J: I just think it seems to be intellectually odd to send a matter back to a court which, if held, has no jurisdiction.

MR DOUGLAS: Well, it is a matter for the Court ultimately, I think.

KIRBY J: Yes, but we have got to have submissions from the parties.

BRENNAN CJ: But those applications are not before us, are they?

MR DOUGLAS: They are not, your Honour.

BRENNAN CJ: The only matter that is before us is the appeal from the answers to the questions that have been given.

MR DOUGLAS: That is right, your Honour.

BRENNAN CJ: So, having disposed of that, we are functus officio.

MR DOUGLAS: Yes, your Honour.

TOOHEY J: And you would be content simply with answers.

MR DOUGLAS: Yes, your Honour.

TOOHEY J: And, apart from costs, nothing else.

MR DOUGLAS: That is correct, your Honour.

BRENNAN CJ: Mr Burmester.

MR BURMESTER: Your Honour, the Court does clearly have power under section 78(2) of the Judiciary Act to make such order as it thinks fit in the case of intervention by the Attorney-General of the Commonwealth, or of the States, but in our submission such an order would not be appropriate. In the normal course, the Commonwealth does not seek to pursue costs in interventions, whichever the form of result, and we would say that in this case there is no particular circumstances which would warrant a departure from that normal practice.

BRENNAN CJ: Even though the Commonwealth, as it were, took up the running as a respondent?

MR BURMESTER: Well, your Honour, I am not sure about that. I think the respondent made substantive arguments in this matter on their own account, and the States and the Commonwealth made their own arguments.

BRENNAN CJ: Yes, very well. Mr Solicitor for Queensland?

MR KEANE: Your Honours, in terms of approach to the issue as a matter of policy, we adopt what was said by our learned friends, the Commonwealth, in relation to this application. In addition, we would mention that we - and, with respect, the other States - are in a somewhat different position in that we did not involve ourselves as a respondent. We are, to that extent, slightly different, and there is a difference in the time that was involved as well.

BRENNAN CJ: Yes. Mr Solicitor for Victoria?

MR GRAHAM: If the Court pleases, we would oppose any order for costs being made against any of the intervening States. The intervention by the States has not prolonged this case beyond half a day and the total duration of the case being not three days but two and a half. We would also submit that the arguments of the Commonwealth and of the respondents tended to cover, as it were, the whole of the ground which needed to be covered to support the orders of the Full Federal Court and did not overlap, but it would be unrealistic to say that the respondent would have taken only the time that the respondent took if the Commonwealth had not appeared. So we would submit that if any order for costs was to be made against an intervener it would be against the Commonwealth but not against the States. If the Court pleases.

BRENNAN CJ: Thank you, Mr Solicitor. The Solicitor for Western Australia.

MR MEADOWS: If it please the Court, I would adopt what my learned friend, the Solicitor-General for Victoria, has had to say.

BRENNAN CJ: The Solicitor for South Australia.

MR SELWAY: Your Honour, we too would adopt what my learned friend, Mr Solicitor for Victoria, says. In our submission the discretion the Court has about ordering costs against interveners is related to the role of the Court in respect of invalidity of statutes in particular where the Court has its own responsibility, if you like, which I think your Honour the Chief Justice identified in Gerhardy v Brown and later in South Australia v Tanner. In that regard, what we would say is one of the questions for the Court is whether the Court has in any way been assisted by the submissions by the interveners or not. If the Court has been assisted, that is a relevant matter to be taken into account. If the Court is of the view that the interveners have wasted the Court's time, that, on the other hand, is also a relevant matter to be taken into account. If it please the Court.

BRENNAN CJ: Thank you. Mr Katz.

MR KATZ: If your Honours please, I adopt the submissions of my learned friend, Mr Graham, the Solicitor-General for Victoria.

BRENNAN CJ: Do you have anything to add, Mr Robb, towards this issue?

MR ROBB: No, your Honour.

BRENNAN CJ: Is it a matter of indifference to you, if matters should fall out that way, as to whether the order is in the form of a Bullock order, as it were?

MR ROBB: The States and the Commonwealth should be good for the money, your Honour, so it is - - -

GAUDRON J: Yes, but you want more than a Bullock order, do you not? You want some part of your costs, in any event.

BRENNAN CJ: Yes.

MR ROBB: Yes, we want mutatis mutandis the same order as the appellant seeks. I am just not sure what all of the permutations would be, but we submit that in the order of two days have been collectively taken up by the interveners. May it please the Court.

BRENNAN CJ: Very well. The Court will consider its decision in this matter.

AT 3.18 PM THE MATTER WAS ADJOURNED