The Secretary, Department of Social Security v Lee S211/1996 [1997] HCATrans 299 (24 September 1997)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S211 of 1996

B e t w e e n -

SECRETARY, DEPARTMENT OF SOCIAL SECURITY

Appellant

and

PATTI-MAE LEE

Respondent

BRENNAN CJ

TOOHEY J

GAUDRON J

McHUGH J

GUMMOW J

KIRBY J

HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 24 SEPTEMBER 1997, AT 10.17 AM

Copyright in the High Court of Australia

MR J.J. SPIGELMAN, QC: If the Court pleases, I appear with MR S.J. GAGELER for the appellant. (instructed by the Australian Government Solicitor)

MR D.F. JACKSON, QC: If the Court pleases, I appear with my learned friend, MR M.B. SMITH, for the respondent. (instructed by the Welfare Rights Centre)

Your Honour, may I mention two matters. One is that, as your Honours will have seen from our written submissions in paragraph 1(e), we seek leave to file out of time a notice of contention on one point. I understand there is no objection to our doing so.

MR SPIGELMAN: That is so, your Honour.

BRENNAN CJ: There will be leave to file the notice of contention out of time, Mr Jackson.

MR JACKSON: Thank you, your Honours. The second matter is that, again as your Honours will have seen from our written submissions, one of our arguments is that special leave should be rescinded. I am happy to deal with that either now or later during our argument, whichever the Court prefers.

BRENNAN CJ: Is there any agreement between counsel as to the order in which that should be dealt with?

MR JACKSON: No, your Honour.

BRENNAN CJ: We will hear you now on that point, Mr Jackson.

MR JACKSON: Your Honours, our submission that special leave should be rescinded is based on the propositions that, first, the case is no longer a suitable vehicle for the resolution of the issue of principle under section 8 of the Acts Interpretation Act 1991 which is said to arise and, secondly and a related matter, that the issue is now, for practical purposes, academic.

Your Honours, may I seek to develop that. I need to refer briefly, but it will take me just a moment or two, to the four forms in which the relevant provisions of the Social Security Act have had in the period with which the case is concerned. The last of those four forms had not been enacted at the time when the special leave application was heard. Could I take your Honours first to the Social Security Act. I think the form your Honours will have is reprinted as of 2 April 1993. The relevant parts of the Act are the parts of Chapters 5 and 6.

That form, your Honours, is the form for which we contend in the proceedings. Now, it deals with the position immediately prior to the coming into operation of the second of the Acts, and that is the 1993 amending Act, which is, if I can give your Honours the number, No 121 of 1993. Now, in the first form before the 1993 amending Act the Act had some relevant features. May I come to the 1993 Act in just a moment. If I could deal with the Act prior to that, the Act, first of all, was divided structurally into chapters and the chapters were then divided into parts.

This case involves, on the one hand, the last part of Chapter 5, that is Part 5.4. It is the part entitled "Non-Recovery of Debts", and your Honours will see that it refers in section 1237, to the Secretary, in subsection (1), being able:

to decide to waive the Commonwealth's right to recover from a person the whole or a part of a debt.

Your Honours, one goes from that to Chapter 6, and your Honours will see Chapter 6 headed "Review of Decisions" and, your Honours, principally Part 6.1, "Internal Review", is involved in the present case.

Your Honours, if one goes then back to Part 5.4, in it is pre-1993 form it was, as indeed it remains, part of Chapter 5, that chapter dealing with overpayments and debt recovery. Your Honours will see that, just staying with Part 5.4 in that form for a moment, it had three provisions, the operative ones being sections 1236 and 1237. Section 1236 dealt with writing off a debt. The Court is no longer concerned with that issue. It arose in the courts and tribunals below. But so far as the present proceedings are concerned, the crucial provision is section 1237, the power to decide to waive the Commonwealth's right to recover debts.

Now, your Honours, the review procedures of Chapter 6 establish, if I could just put it very shortly, these procedures. First, a person affected by a decision not to waive, that is, a decision under section 1237, had a right to have that decision reviewed by an authorised review officer. That was dealt with by section 1240(3). That related back to section 1240(1)(a). That officer had the powers set out in section 1243 and had to give reasons and findings. That is in section 1244(1)(d).

Your Honours, that is Part 6.1. Part 6.2 then gave a person dissatisfied a right to have the issue reviewed by another tribunal, the Social Services Appeals Tribunal. Your Honours, I will not go to the detail of that. I would refer particularly, however, to section 1247(1). Then, from Part 6.2 there was a right to go to the Administrative Appeals Tribunal. That is dealt with in Part 6.4, especially section 1283(1). Your Honours, I am sorry to have taken a moment doing that, but those provisions are the ones which we in the case contend were the ones applicable, and - - -

TOOHEY J: Could I just interrupt you, Mr Jackson. You start with section 1237 which relates to the power of the Secretary.

MR JACKSON: Yes.

TOOHEY J: Then you take us to 1240(3), which speaks of a review by the Secretary or an "authorised review officer".

MR JACKSON: Your Honour, could I say that the powers of the Secretary under 1237 are powers capable of delegation to officers. They were in fact delegated, relevantly in this case, and so one goes from - one reads, in effect, in 1237 "officer" and then there is an "authorised review officer".

TOOHEY J: Authorised review officer, yes, thank you.

MR JACKSON: Yes, in 1240. Your Honours, could I just say that central, of course, is 1237 in Part 5.4, and its meaning had been interpreted by the Full Court of the Federal Court in Riddell v Department of Social Security [1993] FCA 261; (1993) 42 FCR 443. Your Honours, I do not need to take your Honours to the detail of the case, but may I just say what it decided. The Full Court in that case held ultra vires section 1237(2) some directions given by the Minister which did two things. One of those was to limit the class of cases in which waiver might take place and the other was to indicate the class of cases in which waiver must take place.

Now, and fundamentally the reasoning of the Court in that case, was that the directions were ultra vires because they purported the limit, the ambit of the discretion conferred by section 1237(1). Now, your Honours, that decision gave rise to the 1993 amendment and those amendments are to be found in Act No 121 of 1993. Your Honours will see that that Act, the page numbered 99 at the top of the page in the copy that I have, inserted as section 87 of that Act a new section. It repeals section 1237 and it inserted a new 1236A and a new - - -

BRENNAN CJ: Just a moment, section 87 did you say?

MR JACKSON: I am sorry, your Honour. It is section 87 - - -

BRENNAN CJ: Towards the end of the Act.

MR JACKSON: It is in Part 2, your Honour, and a division - - -

KIRBY J: Page 2551 of our document.

MR JACKSON: I am sorry, your Honour. I thought your Honours had similar documents similar to mine.

KIRBY J: Page 2550.

MR JACKSON: Yes, thank you, your Honour. Your Honours, what your Honours will see is that 1237 was repealed, three new provisions were put in: 1236A and then 1237 and 1237A. Now, as we would understand the positions, your Honours, the contention of the Commonwealth is that the new 1236A, because of the use of the words "whenever incurred" applies to the present case.

Your Honours, the second aspect of their case, again, as we understand it, is that the new sections 1237 and 1237A mean that the Secretary has no residual discretion, he or she can only decide to waive when the circumstances set out in one of the succeeding subsections is made out.

Your Honours, the second of those - that is, the "no residual" discretion - is the important one. That provision itself, however, had been amended in 1995. If I could just pause to say, your Honours, the contest between the parties essentially is, on our side, does the pre-1993 law apply; the other side, the law as amended in 1993. But the law has been twice amended since then. The first is in 1995, where the amendments were Act No. 143 of 1995. The relevant provisions of that Act are in Schedule 3, and there is an operating provision in the principal Act - I am sorry, I should not say the principal Act - in the covering parts of the Act, section 2(4) says that Schedule 3 commenced on 1 January last year.

If your Honours go then to Schedule 3, what one sees is, in clause 1 of it, that section 1236A is repealed and there is a new section saying that it applies to:

(a) debts arising on or after 1 January 1996; and

(b) the amounts of debts arising before 1 January 1996 that were outstanding at the start of that day.

Now, your Honours, one goes on to look to the various provisions to which 1236A applies, and you will see that it lists the succeeding provisions, including section 1237(1), and that section 1237(1) limits the Secretary's powers. There is also, however, a section 1237AAD, which gives the Secretary a power to waive the right to recover in, if I could put it shortly, were the discretionary circumstances. Your Honours, a question was whether those amendments apply to the present case, or whether the effect of section 8 of the Acts Interpretation Act 1996 is to keep the earlier law applicable.

MR JACKSON: Your Honours, could I just say however, that those provisions - - -

BRENNAN CJ: Could I just interrupt you for a moment?

MR JACKSON: Yes, your Honour.

BRENNAN CJ: If this Act were applicable would your client fail?

MR JACKSON: Your Honour, we would then have to rely on the AAD provision, the discretion to which I just referred.

KIRBY J: Is that so, or is it not the essence of your claim that you have an accrued right which has survived. What has taken that right away?

MR JACKSON: Your Honour, I am sorry. His Honour the Chief Justice's question was, I think, prefaced by the observation "if this applied to us". Your Honours, there is the anterior question whether it applies.

BRENNAN CJ: Yes, quite.

MR JACKSON: If it does, then we fall within AAD.

BRENNAN CJ: AAD?

MR JACKSON: Yes, now your Honours - - -

BRENNAN CJ: And does that offer you some hope?

MR JACKSON: Yes, your Honour. But, your Honour, could I just say two things about it. The first is this; that my reason for referring to it in this point is twofold. One is to say that the effect of these provisions is to sweep away many cases of course because, except for cases in the review pipeline, as it were, they would all be covered by 1236A(1)(b). That is the first thing, your Honour.

The second thing we would seek to say about it is that the remaining cases are ones to which the amendment which took place or came into effect after the Court heard the special leave application would be applicable. Now, your Honours, they are ones where the relevant law was Act No 84 of 1996, the short title of that, the right description of it is the Social Security Legislation Amendment (Budget and Other Measures) Act .

KIRBY J: Could I just ask you, so that I will get it clear in my mind - I have not had the pleasure of reading the statutory provisions before today - why would not the Court proceed to here determine the point that is the subject of special leave that has been granted and then, if you were to lose that, you would still have your rights under 1237A? Why would that not follow from the working of the legislation?

MR JACKSON: Because, your Honour, what would happen, in effect today week, is that in respect of cases like this and other undecided cases, the law itself will change so that we will have to go under the provision to which I just referred. It will not be a case of there being an option one way or the other.

KIRBY J: Has Parliament expressly overridden the right that you are arguing before this Court and succeeded below as, as it were, being preserved and belongs to you?

MR JACKSON: Well, your Honour, the provision to which I am about to refer says:

Despite section 8 of the Acts Interpretation Act -

and, your Honours, what I was going to say was this: that Act is one which your Honours will see from the terms of section 2(6) of it commences on 1 October, which I think is next Wednesday. Your Honours, it says that Schedule 18 and Part 4 of Schedule 21 - and if your Honours go to Schedule 21 which is the relevant part, you will see that one has in paragraph (4) of clause 105, it says:

Despite section 8 of the Acts Interpretation Act, if a legal proceeding or an application for review of a decision:

(a) relates to, or otherwise involves, a provision of..... 5.4 of this Act; and

(b) is not finally determined before 1 October 1997;

the proceeding -

that is the legal proceeding -

or application -

that is the application for review -

must, if continued, be determined as if it had been instituted on -

if I could put in the words "1 October" -

and this Act, as amended by Schedule 18 to the amending Act, applies to proceeding or application accordingly.

Now, your Honours, what that means, in our submission, is this, that the current waiver provisions of the Social Security Act are given retrospective effect in all review and legal proceedings which are still in being and, your Honours, what your Honours will see is that if it be assumed, first of all, that the Court does not accept the appellant's arguments and dismisses the appeal and if the Court does so before 1 October, the result would be that the order of the Federal Court which your Honours will see at page 166 means that the case goes back to the AAT but the proceedings, needless to say, your Honours, will not be heard and determined by the AAT in a week, one would expect, and the Act in its present form would then apply to the application for review, that is, the section AAD applies, to put it shortly.

Your Honours, if the appeal to this Court would otherwise be successful, but if the Court were to give its decision on or after next Wednesday, the Court itself, in our submission, would have to apply the new provisions and that would mean that the Court's order would have to be to remit the matter to the AAT for further hearing, because the result of the - in the application of the law as amended by that provision, the result of that would be, your Honours, that the Secretary had been given back, if it was taken away, a broad discretion and, your Honours, that discretion would be one that the Court itself, no doubt, would not seek to exercise, but it would be something that would have to be dealt with in the proceedings in the courts and tribunals below.

McHUGH J: I am sorry, are you saying that in the exercise of its appellate jurisdiction this Court would be bound to apply 105?

MR JACKSON: Yes, your Honour.

McHUGH J: Would that not raise an important constitutional question under Chapter III?

MR JACKSON: Your Honour, all that has happened really is that what is sought to be done, I suppose, is to apply a provision to determine what the law should be in relation to the provision. Perhaps I am putting that badly - what the law should be.

BRENNAN CJ: When you say that the Court would be bound to apply the latest amendment, that, with respect, cannot be accurate, can it? I mean, this Court's function is to say whether or not the Full Federal Court gave the decision which it ought to have given.

MR JACKSON: Yes, your Honour.

BRENNAN CJ: So that is the question for our determination.

MR JACKSON: Yes, your Honour, I accept that. However, in dealing with what is to happen in the matter, the Court then has to make some order in relation to it. At the time when the Court would come to make the order - and I am assuming it took place not today but after 1 October - in deciding what order to make, the Court would be in a position that it would need, in our submission, to take into account the operation of clause 4 and the operation of clause 4 would be that the proceeding would continue, would be one to be treated as one to which the Act would apply.

I am not suggesting, your Honours, that the Court itself would enter upon any discussion of the matter but what I am saying is that when the Court was dealing with the order that had to be made in it, the Court would have to recognise, in our submission, that the proceedings were not one that would be resolved simply by saying that the order of the Full Court of the Federal Court should be set aside, because what would happen would be that there would be an application treated by the Act as one made on 1 October and one where there was a discretion to be dealt with by the tribunals below.

TOOHEY J: And that is premised on the appeal succeeding?

MR JACKSON: Yes, your Honour. If the appeal fails, the situation would be that the order of the Full Court of the Federal Court would stand. That order, as your Honours will see from the page to which I made reference before, is an order which requires that the matter be heard by the Administrative Appeals Tribunal. Perhaps I can take your Honours to that order. It is page 166.

McHUGH J: So your argument is that, irrespective of what this Court does, the rights of these parties is going to be determined by what is now clause 105?

MR JACKSON: Yes, your Honour, in consequence of that, which puts the situation back to one where there is a discretion in the relevant bodies. The point I was also going to make about it was that in terms of this case having a general application, the number of cases that - it is difficult to see really that, apart from an atypical case, any cases could be after 1 October ones that would not be dealt with by a different legislation from that which gave rise to the present - - -

McHUGH J: That may be so in relation to cases under the Social Security Act. May not the decision in this Court be relevant to determining whether an application for the excise of an administrative discretion bears the status of an acquired or accrued right for the purposes of section 8(c) of the Acts and Interpretation Act?

MR JACKSON: Your Honour, that is an issue, of course, that already has been decided by the Court; that is another question, whether the Court seeks to re-enter Esber. That is a matter that has already been decided, in our submission, and - - -

KIRBY J: Is the point that you are raising, may I ask, a point of discretion on the issue of the revocation of special leave, or is it a more fundamental point, that if this case were decided after 1 October that there would be no matter?

MR JACKSON: Your Honour, I do not think I can take it as far as the latter. It is a situation where, in our submission, as the law stands today, it is unchanged, in operative terms, from that which applied at the time when special leave was granted. What I am seeking to say, however, is that by the time the matter comes to be decided, in the ordinary course of events, the orders that will be made by the Court will be ones having the same effect, whatever the result is, and that if one had a situation like that it may not be strictly academic but it is one where it is not an appropriate case, in our submission, for the Court to enter upon an issue which in the end is one that will be overtaken by the course of events.

TOOHEY J: The point of difference - let me see if I understand it correctly, Mr Jackson - is that if the appeal succeeds then consequential orders made by the Court would involve the matter going back to the tribunal.

MR JACKSON: Yes.

TOOHEY J: If the appeal fails, then the order made by the Full Court would have the same consequences.

MR JACKSON: Yes.

McHUGH J: And there are costs undertakings being given that preserve the costs in the court below, and they are paying your costs here, are they not?

MR JACKSON: Yes, your Honour.

BRENNAN CJ: Is this the problem though, Mr Jackson, although if this Court were to allow the appeal it would then nonetheless be constrained to make an order in the same terms as that set out at page 166? The grounds on which that order would be based would be different from the grounds on which the order at 166 was based.

MR JACKSON: I accept that, your Honour.

BRENNAN CJ: Does that raise the problem of Uren's Case in the Privy Council?

MR JACKSON: Your Honour, there are decisions of this Court - I am afraid I just cannot put a name to one for the moment, but there are certainly decisions of this Court in which it has been held there is an ability to appeal to this Court and for this Court to decide, on a basis - in order to uphold the judgment on a basis different from that - - -

BRENNAN CJ: Yes.

MR JACKSON: I am sorry, your Honour, I am putting that badly. One can appeal, in effect, against a particular strand of reasoning in some circumstances. Your Honour, I accept that. What I am seeking to say is that in the present case what one really does have is a situation where the particular case is one that is about to become, we would submit, academic. Your Honours, it is always tempting, of course, if there is a vehicle in which to decide an issue, for the Court to go on to hear it. In the present case this is one where really all one has is a case that will be resolved in, for practical purposes, the same way, whatever happens to it, and it really just becomes an occasion for the Court to visit a point of law having no practical application to the present case. That is something which, in our submission, the Court should be very hesitant to do.

BRENNAN CJ: So whichever way it ends up the tribunal to which the matter must inevitably be remitted will have to decide the case in accordance with Act No 84 of 1996.

MR JACKSON: Yes. Your Honours, those are our submissions on that point.

BRENNAN CJ: Yes, Mr Spigelman.

MR SPIGELMAN: Your Honours, the issue of principle that arises in the proceedings arises not as to whether or not Esber should be overruled, so much as to what extent Esber, in fact, goes. So, in order to assess whether this is a proper vehicle, it is important to understand the precise nature of the issue of principle before the Court.

McHUGH J: We may not be giving you an advisory opinion, but we will be getting as close to it as you could practically get, would it not?

MR SPIGELMAN: If the Court pleases, no.

McHUGH J: The proceeding is going to be futile.

MR SPIGELMAN: No. Can I come to that after I identify what the issue of principle is. There are three possibilities as to whether, in a statutory context, an acquired right has been vested in the sense that section 8(c) of the Interpretation Act provides. The first possibility is that the statutory decision has to, in fact, be made, that was your Honour the Chief Justice's position in dissenting Esber.

The second position is, if there is a non-discretionary statutory decision, although the decision has not been made, it must be made in a particular way on certain conditions being satisfied.

KIRBY J: But that is only in this particular field of statute. I, myself, had a case where Esber was being challenged in the industrial sphere. So, that will come up at some time but this statute has only dealt with it in the particular context of social security.

MR SPIGELMAN: The question of discretionary and non-discretionary is a matter of much broader application. For example, it arises in the immigration area and others. Could I just finish. There are three categories. The first is, the decision has to be made. If it is not made, there is no vested right for purposes of section 8(c) and that was the position that your Honour the Chief Justice took.

The second position is the position of whether or not it applies only to a non-discretionary statutory decision, namely, a decision that has to be made in a particular way if and when certain conditions are established, including conditions established to the satisfaction of a decision maker.

The third position is that it does not matter whether it is a discretionary or non-discretionary decision. If the process of decision making has been set in train, there is an acquired right.

Now, the issue before the Court, the issue of principle before the Court is whether or not Esber is, in fact, in category 2 or 3. The Full Court in this case decided by a 2:1 majority that it was in category 3, and the discretionary decision that has been set in train, it does not matter, that is an acquired right.

We submit that, in fact, properly understood Esber is in category 2, namely, a non-discretionary decision. That is how the matter has been considered by another Full Court in a case we have given your Honours a reference to, Dai Xing Yao in the immigration area. Another Full Court has cast doubt on this decision, referred to this decision, and said that this decision did not take into account the critical distinction between discretionary and non-discretionary decisions.

So, what you have before the Court is two Full Courts of the Federal Court disagreeing with each other. In the normal course of events, that would be enough to grant special leave, let alone - --

TOOHEY J: Except that you seek to extract those general principles from the realities of the case at hand.

MR SPIGELMAN: That is so, your Honour, and the question is whether or not this is still a proper vehicle for deciding those issues, and we submit it is still a proper vehicle. The question or the character I have identified as to whether or not Esber is, in effect, distinguishable - there is reasoning in Esber that goes beyond what is necessary for the decision in the sense that the reasoning does not confine itself to non-discretionary decisions. However, the Court relies upon, and quotes with approval, other judgments and, in particular, a judgment of the New South Wales Court of Appeal in a case of The New South Wales Aboriginal Land Council in which that court, for the first time, we believe, made a decision that said the test was not test 1, as your Honour the Chief Justice applied in Esber, but, in fact, test 2, namely, a non-discretionary decision is such as the mere process of instituting the decision-making process would create a vested right for purposes of 8(c).

McHUGH J: Yes, but this may be a suitable vehicle in the sense that you are using it, but the fact is that our decision cannot touch the rights of these parties.

MR SPIGELMAN: That is not so. Can I take your Honour to that? My friend submits that this Court will make a decision of the character that remits - if the appeal is dismissed, or if special leave is withdrawn, the effect is the same; the order of the Federal Court stays, the matter is remitted to the tribunal to be determined in accordance with the new provision and, in his case, the relevant section is 1237AAD. The order of the Federal Court already remits the matter to the tribunal. It is true that the tribunal will now apply a different test to that which it would have applied if the matter had been decided prior to 1 October, but whether special leave is withdrawn, or the appeal is dismissed, as one would expect, the consequences are the same.

If, however, the appeal is allowed, there is no occasion on which this Court will order the matter to be remitted to the tribunal. If the appeal is allowed, the order of the Federal Court will be set aside. The only extant order will be that of the Administrative Appeal Tribunal, which dismisses the proceedings. The decision - the actual order of the tribunal - appears at appeal book 66.

BRENNAN CJ: But that leaves out of account the appeal that was instituted from the order at 66 to the Full Federal Court and leaves that proceeding undetermined.

MR SPIGELMAN: No. Well, we would submit that once the order of the Full Court is set aside, then the effect is that the order of the Administrative Appeal Tribunal remains.

BRENNAN CJ: That is not right.

McHUGH J: That is not our practice at all. We always make an order as to how the appeal to the Full Court should be dealt with. We would either order that the appeal to that court be allowed or dismissed, as the case may be.

BRENNAN CJ: Yes.

MR SPIGELMAN: That is the only circumstance in which my friend - if there were such an order, then it may be that an order of that character would be appropriate.

BRENNAN CJ: Let it be assumed that such an order would be made because, unless such an order is made, we have not discharged our constitutional function. We then have a pending appeal from the AAT to the Full Federal Court.

MR SPIGELMAN: No. Your Honours would dismiss that appeal as well or set it aside. May I say this, one of my friends critical points in his argument, and I did not think it received any support from the Bench, but it was that this Court would in some way be bound by section 105. Could I just take your Honours to it, and the reason that we would submit that both the appeal to the Court, and the appeal - - -

BRENNAN CJ: Just let me interrupt you for a moment. Let it be assumed that this Court will address the question of what order the Full Court of the Federal Court ought to have made at the time that it made it on the appeal from the AAT. In those circumstances, what order would you be contending for?

MR SPIGELMAN: This Court would dismiss that appeal. It would order that that appeal be dismissed, not that the matter be remitted and the reason for that is - can I take your Honours to 105(4)?

GAUDRON J: You are going to have to tell me where to find it.

MR SPIGELMAN: I am sorry. This is in the Social Security (Budget and Other Measures) Legislation Amendment Act 1966 . At the bottom right hand corner there is a page 199, it is in Part 4.

McHUGH J: That is your description, I thought you were referring to a page but apparently you are referring to a subsection.

MR SPIGELMAN: Yes. Section 105(4) which is the, despite section 8 of the Acts Interpretation Act 1901 , "a legal proceeding or an application for review of a decision", we say that the word "legal proceeding" there does not apply to an appeal. It cannot apply to an appeal to this Court by reason of section 73 of the Constitution. My friend did make the submission that if this Court gave reasons after 1 October 1966, it would have to, in some way, apply the new provision. That is not so. We submit that this Court - the appellate jurisdiction of this Court is an appeal, in the strict sense.

We submit that the words "legal proceeding" there extend to an appeal, not only to this Court - sorry, do not apply to an appeal to this Court, and, similarly, though not necessarily for the same constitutional reasons but, as a matter of construction, do not apply to an appeal to the Federal Court.

TOOHEY J: Is that expression given a meaning anywhere either in this Act or in the substantive Act?

MR SPIGELMAN: No, as far as I know, no. The reason it does not is because it cannot apply to this Court for constitutional reasons and should be construed accordingly, but it does not apply to any appeal.

KIRBY J: Does that raise a constitutional question on which notice must be given?

MR SPIGELMAN: No notice has been given, your Honour. I do not think it does, the way I am putting it; namely, I am putting it as a question of statutory construction.

GUMMOW J: "Legal proceeding" comes out of section 8 of the Acts Interpretation Act, that use of that expression.

MR SPIGELMAN: It may, your Honour. It occurs in a different context, "investigation, legal proceeding or remedy" and (e) refers to "investigation, legal proceeding or remedy" as well. It occurs in a different context. This one says "legal proceeding or application for review".

GUMMOW J: It does say "Despite section 8".

MR SPIGELMAN: That is so, your Honour, but in any event our basic submission as to why my friend's point is not good in terms of futility, we do not think it raises a constitutional issue the way I am putting it, but your Honour may be right, in one sense it may, but - - -

BRENNAN CJ: But it must, must it not? It must. Either this Court in obedience to clause 105(4) applies the Act of 1996 as the relevant law for the purpose of determining the appeal or it does not because its constitutional appellate jurisdiction precludes it from doing so.

MR SPIGELMAN: That would be true if one reaches that point. The point we have reached is an anterior point, namely, what is the position with respect to the Federal Court? That is not a constitutional issue. When I say the point we have reached, the point we have reached at this moment in terms of whether special leave should be rescinded now. The point we have reached does raise a point of statutory construction in terms of what the position is with respect to the appeal to the Federal Court and it does not raise a constitutional issue, so your Honours could deal with the special leave issue. How the proceedings should be disposed of if we are successful in this submission may give rise to the point that your Honour has just put to me.

BRENNAN CJ: If the jurisdiction of this Court is to determine whether the Federal Court's decision was right or wrong, we have a choice - that is not quite the right phrase -two frames of reference present themselves. One is the law as existing at the time of the Federal Court's decision. The other is the law proscribed by clause 105(4). Now, in the choice between those two, does the constitutional jurisdiction determine the answer?

MR SPIGELMAN: It may, but it does not determine the special leave question, if your Honour pleases, namely, the special leave question will be determined on the basis of whether or not this legal proceeding extends to the appeal to the Federal Court but, in any event, as one of your Honours pointed out, there have been no 78B notices and if we go past that at this stage it may be that the matter will not proceed today for the reason your Honour just put to me.

KIRBY J: Presumably the reason for the grant of special leave was your signalling your desire to challenge Esber.

MR SPIGELMAN: Challenge or distinguish.

KIRBY J: And that is a challenge that will not disappear because the Court knows of cases that are in the pipeline where that issue will be raised. The question is, is this case, where the ultimate rights of the parties are going to be determined according to the supervening legislation, really an appropriate vehicle?

MR SPIGELMAN: The case to which your Honour is referring I think is an industrial case from Melbourne. That, we do not believe, is alive any more. The particular one that has come to this Court and gone back is not alive any more, but your Honour is quite right: sooner or later the point will come here. But the particular vehicle your Honour has in mind is probably no longer - - -

KIRBY J: But if ultimately down the track the rights of these parties are going to be determined by the new legislation, then really we are not doing anything terribly important or useful and this certainly would not seem to be then an appropriate case to reconsider Esber.

MR SPIGELMAN: Your Honour, our basic submission is, if we win, there is no occasion to remit the matter at all and accordingly - - -

KIRBY J: I think that defies my understanding of the Constitution but certainly the practice of the Court and of all appellate courts. You do not just set aside an order. You make an order disposing of the proceeding before you.

McHUGH J: Could I add that it seems to me there may be some special complications in this Court. If the appeal is allowed, that would be the first order: appeal to this Court allowed. Then we have to deal with the appeal to the Full Court which is set out at page 112 and, although prima facie one would think that the order would be that the appeal would be dismissed, that may not necessarily be the case because of order 2 of the tribunal which is set out at page 66.

MR SPIGELMAN: I am sorry, that is a matter that is not before the Court any more. Section 1236 is a question with respect to writing off as distinct from waiver.

McHUGH J: Right.

MR SPIGELMAN: That is alive and is no longer the subject of an appeal to this Court, so that part of - - -

McHUGH J: So 2 and 3 do not apply?

MR SPIGELMAN: That part of the AAT decision is now extant and is no longer - 2 and 3 - if I could just - 2 and 3 is the decision that is still alive, not to waive - - -

McHUGH J: That is right, yes.

TOOHEY J: Not to waive?

MR SPIGELMAN: Not to waive, as distinct from write off. That is order 1 of the tribunal's decision. Order 2 is setting aside order 1 of the tribunal which is the order which we would seek to restore, so we have to set aside that. Order 3 is consequential on order 2. The cross-appeal being dismissed would stand. The cross-appeal was the appeal from order 2 and we no longer seek an order - - -

TOOHEY J: But is that right, Mr Spigelman? I thought the cross-appeal was in relation to the decision not to write off.

MR SPIGELMAN: Yes, that is no longer before this Court, so we have given up our - order 4 of the Full Court would stand.

TOOHEY J: Yes, I see.

MR SPIGELMAN: The issue of waiver has not been pursued to this Court.

BRENNAN CJ: The issue of writing off.

MR SPIGELMAN: The decision to write off has not been pursued to this Court, so order 4 would stand.

McHUGH J: What about the orders on page 66? We would have to deal with those as well.

MR SPIGELMAN: Once one sets aside - order 2 of the Full Court set aside order 1. If one sets aside order 2 in the Full Court, order 1 stands and 1, 2 and 3 stand, so our position is that - - -

McHUGH J: You mean the orders at 66 stand?

MR SPIGELMAN: All of them.

McHUGH J: Yes, but then - - -

MR SPIGELMAN: If we win this appeal.

McHUGH J: That is right, but then the matter just goes back to be dealt with in accordance with 1237AAD.

MR SPIGELMAN: No, it does not, no, because order 1 affirms the decision not to waive. It goes back to be decided in accordance with 1236 which is not the waiver decision but the write off of decision. I am sorry, the write off decision has, in fact, been subsequently dealt with. If one goes to 96, and that deals with the write off decision and that stands and there is no current appeal from it. There was to the Full Court but there is not to this Court.

BRENNAN CJ: So we are concerned only with order 1 on page 66?

MR SPIGELMAN: That is so.

BRENNAN CJ: And order 2 on page 166?

MR SPIGELMAN: Yes, I am sorry for not having done that with the precision that the Court deserves but that would be our position. It would be both orders 1 and 2 on 166 because order 1 is the - - -

BRENNAN CJ: Yes.

GUMMOW J: The orders on 96 were consequent upon the implementation of order 3 on 66? That is what happened.

MR SPIGELMAN: Yes. That issue, as it were, has gone away as far as this Court was concerned. If your Honours please, they are our submissions on the revocation of special leave issue.

KIRBY J: May I just ask in relation to costs in the Full Federal Court? What was the position in relation to costs in that court as distinct from here?

MR SPIGELMAN: Your Honour, costs have been preserved in terms of the special leave application.

KIRBY J: Did they not run on the outcome of the proceedings in that court?

MR SPIGELMAN: We paid in the Full Court, as the order makes clear, and the undertakings given on the special leave application were that not only would we not disturb that but we would pay here too.

TOOHEY J: If you are right and the matter does not require an order of this Court that directly or indirectly remits the matter to the tribunal, and if the order on page 66, order 1, the affirmation, stands, where does the respondent then stand in relation to making further application by reason of the new proceedings?

MR SPIGELMAN: There is no provision for that; namely if the respondent's rights were determined properly in accordance with the law then extant, this Court affirming that the original decision was right - - -

TOOHEY J: Yes. I am looking really at the practicalities of it now, not the terms of the order. Would the respondent then be precluded from invoking the special circumstances provision that had come into force since?

MR SPIGELMAN: Yes, as every other applicant who had their matter decided in accordance with the regime also did not have the particular special circumstance provision here. There was another provision within which they argued; but nothing like - not in those terms.

GAUDRON J: But does that not depend on whether or not the matter is now finally determined? It seems to me, if you take the view that the matter is not finally determined, because the matter is before this Court, which seems to be the obvious and ordinary way in which to apply section 105(4), then she must get her hearing under whatever is the provision with the multiple number of As to which we were earlier referred.

McHUGH J: She has had her appeal determined, properly.

MR SPIGELMAN: Your Honour, our position - I will be repeating myself - despite the words "finally determined", "legal proceedings", we say, do not extend to an appeal.

GAUDRON J: I know you say it but why do the words not bear their ordinary meaning? Why is the matter simply not finally determined by reason of the fact that it is presently before this Court, other than by reason of the constitutional invalidity of them?

MR SPIGELMAN: On the basis that one reads it down in accordance with 15A of the Interpretation Act, in order to be constitutionally valid we would submit that that means that the word "legal proceeding" means the final determination at first instance, and that that is the final - - -

GAUDRON J: That is right, on the basis that one reads it down. You are inviting us into a constitutional case - - -

MR SPIGELMAN: That is the next point.

GAUDRON J: - - - to determine whether or not these proceedings have been finally determined.

MR SPIGELMAN: I appreciate that, if we reach that stage, we may not be dealing with the matter this morning.

GAUDRON J: Well, we must reach that stage, must we not? I mean, must the question be whether the proceedings have been finally determined be determined to decide what order should be made? I mean, if it transpires that this Court has to proceed by reference to 105(4) to determine whether or not the proceedings are finally determined, and it decides that they have not been, simply because there is an appeal on foot here, which may say nothing about - I mean, there are several ways in which you might read that down - the order has to be that it goes back to the tribunal.

MR SPIGELMAN: That would be a matter for further argument assuming - we would say that that is not the matter that is determinative of the question of whether special leave is revoked, but it is a question of what the Court will do immediately - - -

GAUDRON J: But does it not go to your suggestion that the proper order to be made is that the appeal to the Federal Court be dismissed? I am suggesting to you, on one view of 105(4), there can be no order that the appeal to the Federal Court be dismissed.

MR SPIGELMAN: And that would be a matter for argument and, because of the absence of 78B notices, for another day.

BRENNAN CJ: Now, that was what I was going to ask you. If it appears necessary for the determination of Mr Jackson's application that we should consider whether on the broadest reading of 105(4) its provisions are inconsistent with the appellate jurisdiction of this Court, what do you suggest should be the course to be followed and, in particular, which of the two courses that seem to be available is preferable, namely, rescind special leave because really we will be a long time getting to the Esber point or, alternatively, do not rescind special leave, give 78B notices and let it be relisted in due course?

MR SPIGELMAN: Well, of course, what we would wish to avoid is the special leave matter be relisted. Your Honour prefaced those remarks by suggesting that if it proved necessary in order to determine that application, I thought, to do so. May I say that because of the discretionary nature of special leave and, no doubt, its revocation, it would be unlikely that your Honours would find it necessary to do so. It would be sufficient for your Honours to regard the possibility of that occurring as a matter to be taken into account. On the question of necessity, I might need to take some instructions on the matter, but could I just do that before - - -

BRENNAN CJ: Yes.

We would not wish to argue a constitutional issue on the special leave application, so that if the Court found itself in a position where it was necessary to take that into account, then we would have nothing to say on the submission. Our basic submission is that your Honours would not get to the point of necessity on the special leave question. It would, however, arise, given the way my friend has advanced his case to your Honours and he has put that this Court must apply if it determines the matter after 1 October, then it would, however, arise in this Court in the substitutive argument.

GAUDRON J: There may be one basis on which it does not arise at all. That is to say, one might take the view that if the Full Court order stands as at 1 October - and the probabilities are that it will, given the complications that have now emerged - then the matter has not finally been determined.

MR SPIGELMAN: But that is the question - - -

GAUDRON J: But that is without a constitutional question arising; that is a plain matter of construction. It not having then been decided, regardless of what any court says or does, it is for the matter to be determined, if necessary, back at the level of the department by reference to the new law, again without any constitutional question ever intruding.

MR SPIGELMAN: But at that stage one still has the appeal to this Court.

GAUDRON J: What I am putting to you is that on one view of 105(4) the only purpose - it does not matter. It does not matter; it simply does not matter. What this Court decided on any issue would not matter simply because of the order of the Full Court standing as at 1 October.

MR SPIGELMAN: We would submit that the only reason why the matter had not been finally determined as at 1 October was because of the outstanding appeal to this Court.

GAUDRON J: No, it would be because the order - that would not matter. There is nothing in 105(4) about outstanding appeals to the High Court.

MR SPIGELMAN: Yes, I appreciate - - -

GAUDRON J: In fact, it is not the fact that there is an outstanding appeal that brings it into play in the way I have suggested; it is the fact that the order of the Full Court stands as at 1 October.

MR SPIGELMAN: Yes, that is so, your Honour, and we accept that if we lose the appeal or if special leave is withdrawn, when the matter goes back it will be dealt with under the new regime.

GAUDRON J: I am suggesting to you without the constitutional issue ever arising.

MR SPIGELMAN: Yes, if - - -

GAUDRON J: On the plain and ordinary meaning of the words, and even if an order is made by this Court dismissing the appeal to the Full Court, the effect of section 105(4) is that it was not finally determined at 1 October and must be dealt with.

MR SPIGELMAN: It may not be, but there is then no application before anybody, in the sense that it has been finally determined and prior to 1 October by the AAT.

GAUDRON J: That depends on what it means.

MR SPIGELMAN: If we win the appeal and the order of the Full Court is dismissed, then it has been finally determined by the AAT.

GAUDRON J: But not - - -

MR SPIGELMAN: If your Honour pleases.

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

MR JACKSON: Your Honours, may I just say two things. The first is that after 1 October the position of course is, as your Honour Justice Gaudron has said, assuming that the order of the Full Court has not at that point been set aside, that one has a situation where that order is one which would require the Administrative Appeals Tribunal to deal with the matter on a basis different from the basis on which it did in fact deal with it.

At that point of course, the operation of the provisions of clause 105(4) means that the review in the courts and tribunals below has to be on the new basis. If one puts oneself ahead a week, as it were, and asks is this a case in which the issue to be sought that was the subject of the ground of special leave is one that comes at that point before the Court, the Court would not, in our submission, at that point grant special leave because all that there would be would be a case where the law at the time of the original decision was one that was held by the Full Court to confer a discretion. There is now a statutory discretion which makes it clear that, whilst it might be slightly different, there is in fact another discretion. The issue has indeed a further academic phase.

Your Honours, the second thing I was going to say is that, assuming for the moment that what the Court is doing is to decide whether the decision made by the Full Court of the Federal Court was correct when made, that would have the result that the Court would express that view. But the Court's powers in relation to actual disposition of the appeal once it has arrived at that conclusion are dealt with by section 37 of the Judiciary Act. What it provides, if I could put it shortly, is that the Court in the exercise of its appellate jurisdiction may affirm, reverse or modify the judgment appealed from and give such judgment as ought to have been given in the first instance and remit the cause to the court from which the appeal was brought for the execution of the judgment of the High Court.

Your Honours, if the position is that at the end of the hearing of the appeal the Court is of the view that the appeal should be allowed, the terms of section 37, in our submission, permit the Court to recognise the fact that the law has changed in the interim and to make an order that the matter be remitted to the Federal Court to be dealt with there according to the law that is then applicable to it.

BRENNAN CJ: But the powers conferred by section 37 are powers which are to be exercised in exercise of the jurisdiction conferred by section 73 of the Constitution. In your submission, in determining what order should be made under section 37, what law should be applied by this Court in determining whether the court below was right or wrong?

MR JACKSON: The Court, in our submission, does two things. The first is that the Court does, as your Honour was putting to my learned friend earlier, decide whether the order of the court appealed from was correct at the time when it was made. Perhaps I should say was wrong at the time it was made. But, your Honour, having done that, that decision then produces a number of orders. Now, one order would be that the appeal should be allowed. The second order - --

BRENNAN CJ: The appeal to this Court should be allowed?

MR JACKSON: The Appeal to this Court, yes, your Honour. So, the appeal to this Court would be allowed, and the judgment of the Full Court of the Federal Court set aside. But, your Honour, the question is whether that exhausts the powers of the Court relevantly and, in our submission, it does not, because what section 73 is seeking to do is to allow the Court to deal with appeals. But what section 73 does not exclude is the possibility that, in the disposition of the appeal, there may have been changes in the law which do not affect how this Court decides the substance of the appeal, but do affect the orders that it is appropriate to make in consequence of it. Now, your Honour, I appreciate that is - - -

GUMMOW J: Well, an injunction would be an example.

MR JACKSON: Yes, your Honour. And, your Honours, it would be a great restriction, with respect, on the Court's powers, and a self-imposed one, if the Court were to take that view. It is one thing to say one cannot have - for example, Mickelberg - fresh evidence being adduced in the court; it is another thing to say that the Court looks at the law in determining the appeal as at the time when the court below heard it. But in terms of what the Court does with the appeal at the end of the case, your Honours, having applied those two criteria, there is nothing, in our submission, in the concepts involved in section 73 that would reduce the Court's powers to the extent contemplated - what your Honour posited to me.

BRENNAN CJ: Well, it would not be reducing it perhaps so much as giving a very free-wheeling effect to the words "in the exercise of its appellate jurisdiction" in section 37.

MR JACKSON: Your Honour, the question and the answer are, in a sense, the same, of course. But unless there were good reason to take the view that the Court should adopt the more restrictive - if I can put it that way - view of its own powers, then the Court, in our submission, should not do it.

BRENNAN CJ: The Court will adjourn in order to consider the course that it should take.

AT 11.27 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.59 AM:

BRENNAN CJ: Since special leave was granted in this matter to consider the issue of the application of section 8(c) of the Acts Interpretation Act (Cth) the Parliament has enacted the Social Security Legislation Amendment (Budget and Other Measures) Act 1996 which inserts into Schedule 1A of the Social Security Act 1991 the provisions of paragraph (4) of clause 105. The construction and application of that provision is in contest between the parties. One aspect of the dispute relates to the operation of section 73 of the Constitution and section 37 of the Judiciary Act 1903 (Cth) upon paragraph (4) of clause 105. The appellant declines to raise and argue the constitutional question on the respondent's application to revoke the grant of special leave. In those circumstances, the issue for the consideration of which special leave was granted has receded to the point where the matter no longer appears a suitable vehicle for its determination. Accordingly, special leave is revoked.

Mr Jackson, do you have any submission to make as to any particular order as to costs you want, supplementary of the order that was made granting special leave?

MR JACKSON: Yes, your Honour. Would your Honour excuse me just one moment? Your Honour, we have agreed that it is not necessary for me to ask for an order for costs. The Commonwealth will pay them.

BRENNAN CJ: Thank you, Mr Jackson. The Court will adjourn until tomorrow at 10.15 am.

AT 12.01 PM THE MATTER WAS CONCLUDED