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High Court of Australia Transcripts |
Adelaide No A32 of 1999
B e t w e e n -
ANTHONY JOHN SAINT
Applicant
and
ADDSTEAD PTY LTD (IN LIQUIDATION and the companies named in the Schedule annexed to the Amended Notice of Motion and Marked "A"
First Respondents
PETER IVAN MACKS
Second Respondent
DAVID WINSTON SIMMONS, DANIEL LEE FARRUGIA, PETER ANTHONY JOHN HERRIMAN, KEVIN FRANCIS GILCHRIST, STEPHEN JOHN LYONS, STEPHEN GERARD CONNELL, RICHARD NEVILLE McNEIL, DAVID HUDSON PROUDMAN, DAVID GEORGE GASZNER, PAUL GEOFFREY TURNER, JOHN CLARK BRIMACOMBE, DAVID JOHN PURCELL, DAVID JOHN TUCKER, RICHARD DEWELL ROSS-SMITH, DENISE JEAN MORGENTHALER, ANDIE WILLIAM BLAISE NICOLAS, WILLIAM DAVID JENNINGS and THOMSONS SIMMONS HOLDINGS PTY LTD
Third Respondents
THOMSONS BARRISTERS & SOLICITORS
Fourth Respondent
DEPUTY COMMISSIONER OF TAXATION
Fifth Respondent
Office of the Registry
Adelaide No A8 of 2000
B e t w e e n -
ANTHONY FRANCIS JOHNSON, PETER DAMIAN SLATTERY, JOHN STORRIE KEEVES, ROBERT JAMES BAXTER, JOHN DESMOND WARDE, WILLIAM McMILLAN CHRISTIE, DAVID PETER RYDON, CAROLINE RUTH CHRISTIE and GORDON RADFORD
Applicants
and
ADDSTEAD PTY LTD (IN LIQUIDATION and the companies named in the Schedule annexed to the Amended Notice of Motion and Marked "A"
First Respondents
PETER IVAN MACKS
Second Respondent
NIGEL WILLIAM WINTER
Third Respondent
DEPUTY COMMISSIONER OF TAXATION
Fourth Respondent
Applications for removal
GLEESON CJ
KIRBY J
TRANSCRIPT OF PROCEEDINGS
FROM ADELAIDE BY VIDEO LINK TO CANBERRA
ON FRIDAY, 24 MARCH 2000, AT 9.51 AM
Copyright in the High Court of Australia
MR R.J. WHITINGTON, QC: I appear with my learned friend, MR M.F. BLUE, for the first and second respondents. (instructed by Ward & Partners)
MR M.L. ABBOTT, QC: May it please the Court, I appear with my learned friend, MR N.J. ILES, in the first action. (Piper Alderman)
MR R.J. WHITINGTON, QC: I appear with my learned friend, MR M.F. BLUE, for the first and second respondents. (instructed by Ward & Partners)
If added, the Commissioner would not seek to make any submissions in relation to removal. In other words, if removal is refused, our application would become academic except, perhaps, as to costs. The purpose of our application is that if removal is granted, we would then be a party of one type or another on the hearing of the appeal.
GLEESON CJ: Yes, Mr Solicitor. I have some certificates from the Deputy Registrar. In matter No A8 of 2000, the Deputy Registrar certifies that she has been informed by Mr Nigel Winter, the third respondent, that the third respondent does not wish to be represented at the hearing of this matter and will submit to any order of the Court save as to costs.
In matter A32 of 1999, the Deputy Registrar certifies as follows: She has been informed by Piper Alderman, solicitors for the third respondents, save for the twelfth-named and thirteenth-named third respondents, and for the fourth respondent, that those respondents do not wish to be represented at the hearing of this matter and will submit to any order as to costs. She certifies that she has been similarly informed by the twelfth-named third respondent and by the solicitors for the thirteenth-named third respondent.
In relation to the application by the Commissioner of Taxation to be joined as a party to both of these proceedings?
MR BENNETT: Yes, your Honour.
GLEESON CJ: Is that opposed by the other parties.
MR JACKSON: Your Honour, our position is, if I could put it this way, one of neutrality but a slightly aggressive neutrality. What I mean by that is that we leave the matter to the Court but we draw to the attention of the Court the fact that the Commonwealth which, of course, is the Commissioner in the end, is able to intervene as a right under the Judiciary Act in any event.
GLEESON CJ: It is a kind of sullen lack of opposition.
MR JACKSON: Your Honour, that sometimes occurs. One does not have to full of joyous enthusiasm in these matters.
GLEESON CJ: Mr Abbott, what is your attitude?
MR ABBOTT: Our attitude is a bit similar to that of my learned friend. We would describe it as aggressive neutrality. Providing they can show the Court it is necessary, we would not wish to be heard.
GLEESON CJ: Yes, Mr Solicitor, what do you have to say in support of your application? What has Mr Whitington to say about this in Adelaide?
MR WHITINGTON: If the Court pleases, we have no opposition and we are quite passive about the matter.
GLEESON CJ: Thank you, Mr Whitington.
MR BENNETT: Your Honour, the short point is that we ought to have been joined as a party. We were the petitioning creditor in relation to a number of the matters. In each of those matters we were a party to an order which is now sought to be challenged on the basis that there was no jurisdiction to make it. We, as a party, indeed, the party that procured the order, should have been a party and we submit we therefore should be joined now.
KIRBY J: So the fact that the Commonwealth can intervene in the proceedings is really irrelevant if you are entitled to be joined as a party by reason of the original proceedings?
MR BENNETT: Yes, your Honour. The interest also, although, in fact, they would probably - - -
GLEESON CJ: Yes, thank you, Mr Solicitor. It would suit your purposes if we made order in terms of order 1 in the notice of motion in each case?
MR BENNETT: Yes, your Honour, reserving, perhaps, the position as to costs.
GLEESON CJ: In each of these matters the order sought in paragraph 1 of the notice of motion filed on behalf of the Deputy Commissioner of Taxation will be made and the question of costs will be reserved.
MR BENNETT: If the Court pleases.
GLEESON CJ: Now, Mr Jackson.
MR JACKSON: Your Honours, as is apparent from the material, this is an application to remove to the Court the constitutional aspect of the action and, your Honours, what the material demonstrates is this, that 63 of the 64 plaintiff companies were put into liquidation by orders of the Federal Court made in the exercise of jurisdiction purportedly conferred by the cross-vesting legislation. The liquidator claims to be entitled to continue to maintain - I do not use that in any offensive sense - the litigation and to take action on behalf of the companies.
GLEESON CJ: Mr Jackson, in respect of each matter, at what page of the application book do we see the precise orders that you seek?
MR JACKSON: Your Honour, we see that in the amended notice of motion, page 2.
GLEESON CJ: This is matter No A8?
MR JACKSON: Yes, your Honour, page 2, paragraph A.
KIRBY J: Mr Jackson, given that the Court is going to have the issue of principle before it in other proceedings which have been referred into a Full Court, what is the marginal utility of allowing these particular parties to come up and argue a matter which is going to be argued before the Court anyway? Are we now in a position that every litigant who wishes to somehow raise the question of the validity of the Federal Court order and the power of the State Parliaments to enact laws like this all around the nation are going to seek to come along and have their opportunity to be heard and take up a lot of time when the issue of principle is tendered to the Court already?
MR JACKSON: Your Honour, could I say in response to that these things? One of the cases with which the Court is involved, Residual Assco v Spalvins and Others is one which may be decided only on the basis of section 11 of the Act that is in question. I am appearing in the case. I am conscious in saying that, your Honours, that the order that was made does raise questions about the validity of other sections which we seek to impugn in this case. However, the case is capable of being resolved only by reference to one of the sections. That is the first thing.
The other case with which the Court is concerned is one which does not necessarily raise, directly, the validity of these provisions. Why that occurs is because the provisions are relied on in order to seek to maintain orders or the efficacy of orders in practical terms that have already been made in the Federal Court. What I mean by that, your Honours, is that in proceedings which, I think, are prohibition or certiorari, there is an endeavour to quash or prohibit further operation of the decision of the Federal Court.
KIRBY J: This is the one involving Mr Grieve?
MR JACKSON: Yes, your Honour.
KIRBY J: This is coming in respect of the Victorian statute which, I assume, is a complete counterpart to the South Australian statute.
MR JACKSON: I think they are all in the same form, your Honour, yes.
GLEESON CJ: It has been amended, interestingly, to challenge the validity of what is referred to as "the Federal Courts (State Jurisdiction) Act (1999) Victoria and any corresponding legislation said to be of like effect". I hope people who do the saying are more specific.
MR JACKSON: I am sorry, your Honour.
GLEESON CJ: It looks as though it is intended to challenge, and, indeed, the notice of constitutional matter that has issued refers to the legislation of Victoria, New South Wales, Queensland, South Australia, Western Australia and Tasmania.
MR JACKSON: Yes. Your Honour, could I say my understanding of it was that to seek to maintain the efficacy of the order of the Federal Court against a challenge to its original making or continued operation, what was sought to be done was then to say the State enactment has the effect that the order is good, however it now be treated, and that in response to that, one has to challenge the validity of the provisions of the State Acts so that the issue arises there but, of course, the issue could be defeated in the sense of not arising by the case being decided on other grounds altogether.
GLEESON CJ: Mr Jackson, our principal concerns are really practical. I presume that what you are seeking to head for is having this matter removed, a case stated and then listed for hearing at the same time.
MR JACKSON: That would be desirable, yes.
GLEESON CJ: In May, with those other cases.
MR JACKSON: Yes.
GLEESON CJ: We understand that. Two things we need to be satisfied about. The first is that there is some practical purpose to be served by having these additional cases heard at the same time as the other cases and that is what you are on at the moment.
MR JACKSON: Yes.
GLEESON CJ: The second thing we have to be reasonably satisfied about to the extent to which it is possible is that we do not produce the consequence that by listing too many cases for the time that has been made available for those other cases in May, we will not produce the result that argument will be incomplete and we will have to revisit the matter some months later.
MR JACKSON: Yes. Your Honour, could I deal with those two things? As to the first of them, this case raises directly the question of the validity of the enactments. There is no question about that. It raises the issue directly. There was a motion in the action in South Australia in which it was sought to have the action stayed and the question of the efficacy of the Federal Courts (State Jurisdiction) Act is in question there. That is the first thing.
The second thing, your Honours, is that it is sometimes desirable, if I may say so with respect, for the Court to be approaching the question of validity of enactments by reference to a number of actions which expose different possible consequences of the legislation and in relation to that, your Honours, if there are any temporal difficulties that can be adjusted by giving the parties limited time or limited times for oral argument, as happens on some occasions.
GLEESON CJ: And do you tell us that, assuming some discipline of that nature is applied if necessary, we can be reasonably confident of completing the oral argument in all of these matters, even if there is removal of these particular matters?
MR JACKSON: Yes, your Honour. I am appearing for the party challenging in the Residual Assco Case and also in this, I expect, and I would not expect the addition of this to add more than, say, an hour to the oral argument I would seek to advance.
GLEESON CJ: Now, let us see if anybody wants to put a contrary point of view.
MR JACKSON: Your Honour, may I just say one thing before I do that?
GLEESON CJ: Yes.
MR JACKSON: It just relates to one of the things relied upon by the liquidator and that is that the liquidator seeks to rely on the fact of his appointment as such and the fact that has not yet been set aside or otherwise
GLEESON CJ: Yes, thank you. Does anybody wish to put a point of view different from that put by Mr Jackson in relation to the matters that have been indicated as being of a concern to the Court?
KIRBY J: I would like to ask Mr Abbott what is the point of difference between the point that Mr Jackson, for his client, is going to argue and the point that you are going to argue or are they all bound up together in the one matter?
MR ABBOTT: Very little in respect of the matters that my learned friend would agitate and we would seek to agitate. It may be that there would be additional areas to add on to any argument that my learned friend presented but we, really, if we were given, for example, an allocation of time, could share it between us.
GLEESON CJ: In your application book, that is A32 of 1999, what page do we find the orders that you seek?
MR ABBOTT: The amended notice of motion is at page 129 and following.
GLEESON CJ: Thank you.
MR ABBOTT: I do not know whether the Court wishes to hear me on the utility of these proceedings.
GLEESON CJ: Mr Whitington, what have you to say?
MR WHITINGTON: If the Court pleases, we say, with great respect, it would be wrong to remove the Supreme Court applications of which removal is sought because there would be no utility in that. It is correct to say, as Mr Jackson says, that the applications under removal seek to raise directly the constitutional challenge. The difficulty with that in this case is that the case does not, in fact at this stage, involve a question of the interpretation of the Constitution as required by section - - -
GLEESON CJ: By "the case" are you referring both to the matter of Saint and the matter of Johnson?
MR WHITINGTON: Yes, I am. For these purposes they can be treated as identical.
GLEESON CJ: Right.
MR WHITINGTON: There are applications before the Supreme Court in each which are in slightly different terms. The Saint application raises more issues than the Johnson application but that is not material for present purposes.
KIRBY J: But do not the orders that were made following the decision in Re Wakim fall, unless you can breathe some life into them by virtue of the State legislation, and if there is a challenge to the constitutional validity of the State legislation, does that not raise a question arising under the Constitution?
MR WHITINGTON: If the Court pleases, no. We say there is ample authority in this Court that an order of a superior court stands and must be obeyed until quashed or set aside.
KIRBY J: That is a common law principle. Can that stand against the Constitution? That is, itself, a question arising under the Constitution.
MR WHITINGTON: But, with great respect, your Honour, that is not a point that any party has raised in these proceedings. That is not sought to be agitated on any - - -
KIRBY J: Is it not inherent in the challenge to the validity of the State Act that you cannot by a State Act breathe life into something which is constitutionally invalid? That is the question.
MR WHITINGTON: With great respect, that may be a point your Honour takes but it has not been a point taken by any of our opponents below, either on their applications, in the notice of motion before the Court or in any of the arguments filed including the arguments in reply. No one has taken the point that your Honour has put that, for some reason, Wakim does not stand for the proposition that the order is good until set aside under the prerogative writ procedure, certiorari, for instance, if that is available.
In Wakim's Case a majority of Judges held that there would be no extension of time under Order 55 in which to bring an application to quash. The effect of that in Wakim is that the orders there, which were impugned, that is the winding up orders, still stand on the record and have efficacy.
Now, my client the liquidator is in a like position. He stands not on the foundation of the State remedial legislation. He stands on the foundation of a Federal Court order and the only challenge at the moment to the Federal Court order is not the one that your Honour Justice Kirby has foreshadowed. It is a different one. It is a challenge through prerogative writ proceedings in matters A6 and A9 in this Court and we were surprised - - -
GLEESON CJ: They are the matters that are going to come to the Court on 3 April. Is that right?
MR WHITINGTON: We did not know about that, if the Court pleases.
GLEESON CJ: I see.
MR WHITINGTON: So presumably, they are going to come before the Court on an ex parte basis but they will require a factual inquiry. They will require, ultimately, that we be heard on the facts and they will require an inquiry into the facts and, principally, into the issue whether there should be any extension of time in which to bring those proceedings, those proceedings now being some five years or more out of time.
GLEESON CJ: Mr Whitington, I think it might be useful if you could just remind us of the nature of the proceedings in the Supreme Court of South Australia and the stage they have presently reached.
MR WHITINGTON: Your Honour, there are two sets of proceedings but, essentially, they allege that in March 1995 solicitors from the firm Thomsons became involved in a scheme with directors or former directors of companies in the Emanuel Group whereby secret commissions and profits were passed to those directors and, in return, those directors allowed the company to pass over properties under security to the Elders or EFG Group on terms that they would not have otherwise obtained.
GLEESON CJ: Now, the moving party in those proceedings is the liquidator.
MR WHITINGTON: The liquidator is a party and 64 companies in the former Emanuel Group, are other plaintiffs. Sixty three of those companies were put in liquidation by orders of the Federal Court and one other was put into liquidation by a resolution of the shareholders.
GLEESON CJ: So that the only connection between the question of the validity of the cross-vesting legislation and the substance of the proceedings that are on foot in the Supreme Court of South Australia is that somebody is challenging the validity of the appointment of the liquidator, in effect, trying to pull the rug out from under your retainer?
MR WHITINGTON: Exactly, your Honour. The standing of the liquidator to bring the proceedings is in issue. Some of the challenges at times have gone further and challenged the standing of the other plaintiffs to bring the proceedings, but - - -
GLEESON CJ: Is there any challenge to the standing of all plaintiffs, or is this a challenge to the standing of some only of the plaintiffs?
MR WHITINGTON: Your Honour, as I read the papers, originally it commenced as a broad challenge on the standing of all plaintiffs, except for one, being the company put into liquidation by a resolution of creditors, but as these proceedings in the High Court have developed, the challenge has come to focus, as I read it, on the standing of the liquidator.
GLEESON CJ: What proceedings in the High Court?
MR WHITINGTON: The application for removal: the notice of motion, there is an application in support of the notice of motion, and the argument. As I perceive it, the challenge is primarily to the standing of the liquidator, but in any event, it probably - - -
KIRBY J: So, essentially, your contention is that even if a question arising under the Constitution occurs at a later stage, this is premature, that it has not arisen yet?
MR WHITINGTON: Precisely, your Honour, and that is demonstrated by the fact that the applicants in these proceedings have seen the need to commence the prerogative writ proceedings to launch a collateral tap on the liquidator's other basis of standing, namely, the Federal Court order.
GLEESON CJ: But I gather from what you say that the liquidator is only one of a number of plaintiffs?
MR WHITINGTON: He is, yes, but I think the logic of the applicants - if I may respectfully so - is that if the liquidator's standing goes because the winding up orders are quashed, then the companies will no longer be in liquidation. A question will then arise as to their authority to sue. Of course, as the Court - - -
GLEESON CJ: But when you use the expression "the companies", you are referring to some of the corporate plaintiffs, is that right?
MR WHITINGTON: I am referring to 63 of them.
GLEESON CJ: Sixty three of how many?
MR WHITINGTON: Sixty three out of sixty four.
GLEESON CJ: And who is the 64th?
MR WHITINGTON: Emanuel Investments is the 64th and that is the company that was not wound up by order of the court, but rather wound up by special resolution of the creditors.
GLEESON CJ: And Emanuel Investments could continue these proceedings on its own, presumably?
MR WHITINGTON: Yes, except it is put against Emanuel Investments, I think, that it was in some way put into liquidation before the events of March 1995 which are at the heart of the claim against both sets of solicitors and, therefore, if it was the only plaintiff left standing, it would not have a cause of action. Now, we do not accept that, but that is what is put against us. But the Court will bear in mind in cases such as this, it has been the practice of the courts, certainly in England, not to dismiss proceedings for want of standing, but to simply adjourn them on the basis that proceedings instituted by a company, for instance, without proper resolution, can be fortified if the company is able subsequently to obtain proper authority to pursue the proceedings.
KIRBY J: I think you have to be very careful using English authority because they do not have to live, as we do, with a Constitution. The Constitution, it is said, permeates the orders under which the liquidator was made and raises a question of the validity of those orders and, therefore, that is a special problem that we have to solve according to our norms. I do not think you can use English authority here.
MR WHITINGTON: No, I accept your Honour's point. I was addressing English authority in another context. I take your Honour's point. I understand the proposition your Honour Justice Kirby is putting to me. All I can say is that proposition has never been put by any applicant in these proceedings. It has never been suggested - - -
KIRBY J: I am surprised to hear that. It seems to stand out like a sore thumb.
MR WHITINGTON: Well, your Honour might be surprised and I will not indulge the Court in our mental state, but we have not ever come to meet that case because it has never been propounded. The case put against - - -
KIRBY J: Well, your point is that some question may arise under the Constitution later. It does not arise yet and the Court has plenty of other cases in which you can deal with the general constitutional question, and we do not need to add to our burdens by having all of you, helpful though you all would doubtless try to be.
MR WHITINGTON: Precisely, and that this would be no more then in those circumstances than an opinion on a hypothetical matter.
GLEESON CJ: Anything else you want to add, Mr Whitington?
MR WHITINGTON: Would your Honour excuse me for a moment?
GLEESON CJ: Yes.
MR WHITINGTON: My learned junior, who has read the papers in Transworld with greater attention to the detail than I have, informs me that it will raise all of the issues that Mr Jackson has adverted to and, indeed, I think probably the issue that your Honour Justice Kirby has addressed.
KIRBY J: Yes, I sat in that removal and Dr Griffith and Mr Grieve are counsel in that case.
MR WHITINGTON: Yes. I think they are our submissions - - -
KIRBY J: That raises a Victorian statute, but we are told there is no relevant difference from the South Australia Act.
MR WHITINGTON: I think they are identical, your Honour, but in any event, they are not materially different. They are our submissions, if the Court pleases.
GLEESON CJ: Yes, thank you, Mr Whitington. Yes, Mr Solicitor.
MR BENNETT: Your Honour, we do not make any submissions as to what course the Court should take in this matter, but there is one thing I do wish to say by way of assisting the Court in view of the way the argument has gone and that is simply to remind the Court that there is one additional feature in this case which may not arise in the other cases listed in May, and that is that 16 of the 63 winding up orders came to this Court and were ultimately affirmed by this Court on appeal. So there is the further complexity of how a want of jurisdiction in the Federal Court is affected by an appeal being heard and dismissed by this Court prior to the - - -
KIRBY J: But no point was raised before this Court relating to the constitutional issue which is now presented.
MR BENNETT: No, your Honour.
KIRBY J: And, therefore, this Court has not passed upon that point.
MR BENNETT: No, it has not your Honour.
KIRBY J: You are suggesting there may be some additional or special constitutional life breathed into the orders by reason of the fact that they are affirmed in this Court.
MR BENNETT: There may be, your Honour, I do not put anything about that at this stage. It is another aspect of the case.
KIRBY J: But how in principle can a common law doctrine about the status of the orders of superior courts, including this Court, stand against the Constitution if, in fact, the Constitution speaks clearly on a matter and says they are invalid?
MR BENNETT: Many things can, your Honour. In Metwally [No 2] a procedural objection prevailed against a constitutional argument. A constitutional argument, at the end of the day, is only a matter of law. The Constitution is part of the law of the land and it must be applied along with other principles of law. But, your Honour, I do not want to get into the argument on the merits of that at the moment.
KIRBY J: Do you agree that this point has not been raised in the pleadings in these proceedings?
MR BENNETT: I am sorry, your Honour, the - - -?
KIRBY J: This is the point of the invalidating effect of the Re Wakim Case upon the orders appointing the liquidator and the orders which are said to attach to the State statute.
MR BENNETT: In one sense, it is implicit, your Honour, but we have not gone through and checked for that purpose.
GLEESON CJ: Yes, thank you, Mr Solicitor. Yes, Mr Jackson.
MR JACKSON: Your Honours, may I say these things. The first thing is that it is right in one sense to say that these proceedings do not say specifically the appointment of the liquidator is challenged. That is because the other proceedings which are listed for 3 April are the prerogative writ proceedings in which that challenge is made. Now, your Honours, it is right to say - - -
GLEESON CJ: Is this, in substance, a challenge to a retainer?
MR JACKSON: Well, not really, your Honour. It is in part, I suppose. But, your Honour, one does come to a situation where you have - - -
GLEESON CJ: Well, it is because you are saying that Mr Whitington's instructing solicitors, who are purporting to instruct him on behalf of the company, have no authority to do so because the person who is purporting to give them their instructions is a stranger.
MR JACKSON: Well, your Honour, one can call it a challenge to standing if one likes, but really it goes a little beyond that in the sense that the basis of it is that the liquidator has no involvement in relation to the companies at all. His claim is to hold an office and the office is one which, if we are correct, he does not validly hold. Now, your Honour, one can call it standing if one likes, but that is to give a challenge to the retainer but that gives that term when one comes to a constitutional area a rather larger ambit than perhaps previously has been had.
GLEESON CJ: There are well-established procedures for mounting a challenge to a retainer.
MR JACKSON: Well, your Honour, we have in this case sought to have the proceedings stayed with the constitutional basis for the stay being set out, and, your Honours, a perfectly legitimate way of attacking is by the procedure that we have adopted, and that is to come to the Court as section 75(v) permits and seek to have the order giving him that power quashed.
GLEESON CJ: But the constitutional argument you seek to raise does not go to any issue on the pleadings in these proceedings, does it?
MR JACKSON: No, your Honour.
GLEESON CJ: It is an argument which, if correct, means that the lawyers who are purporting to conduct this case on behalf of the plaintiff are not authorised to represent the plaintiff.
MR JACKSON: One of the plaintiffs is the liquidator, the others are companies, and the companies are persons whose affairs are being conducted by the liquidator. Now, in relation to those, what we say - what your Honour puts to me is right, I accept what your Honour puts to me, but it is not all that there is. What there is, of course, is a position where litigation is being maintained in the name of companies by a person who has no entitlement so to do. Now, your Honour, could I just say in relation to the matter, just this: that in relation to setting aside the appointment of the liquidator, we would be entitled, we would submit, almost, as it were, ex debito justitiae, to have orders made prohibiting the liquidator taking further steps once it becomes apparent that his appointment is no good.
GLEESON CJ: Mr Jackson, what you seek to remove is part of a cause in proceedings, No 410.
MR JACKSON: Yes.
GLEESON CJ: One of the points that is put against you, as I understand it, is that this is not part of the cause. It is a matter relevant to a collateral attack that you are going to make in other proceedings on the appointment of the liquidator, but the validity of the appointment of a liquidator is not part of this cause. That is the argument, as I understand it, or part of it.
MR JACKSON: Well, your Honour, in one sense that is correct, but what we do seek to say is that it is a matter of accident, as it were, that, as in one of the other cases that the Court has, the application for the prerogative relief and this application were not heard together.
KIRBY J: It may be a matter of accident, but it is, in fact, the definition of the cause at the moment. I mean, we have to consider whether with a measure of inconvenience and possibly blowing out the argument in the case, we bring these proceedings up when we already have experienced counsel to argue the issue and you, it seems, have a flaw in relation to what is the definition of the cause at the moment.
MR JACKSON: Well, your Honour, if the Court were to take that view, we would ask that the application be put, in effect, before the Court to be heard then as if it were a final matter because at that stage it would be appropriate for the Court to have the application for prohibition being dealt with by the Court and also this application that the parties be prepared to argue it fully.
GLEESON CJ: Thank you, Mr Jackson. Mr Abbott?
MR ABBOTT: By way of additional submissions, could I refer the Court to two pages in the application book which, in our submission, demonstrate that the liquidator does rely upon the provisions of the Act. Page 103 is an annexure to the affidavit filed in support of the amended notice of motion and there is a letter from the solicitors acting for the liquidator. At line 35, we read:
As you know, the liquidator takes the view that any issues concerning the legitimacy of any winding up orders made by the Federal Court or of his appointment as liquidator by the Federal Court of the various companies within the Emanuel Group, or any order made by the Federal Court in that administration, are cured by the Federal Courts - - -
GLEESON CJ: Is that an issue on the pleadings?
MR ABBOTT: We would say it is.
GLEESON CJ: Well, show us where the pleadings raise that issue, please.
MR ABBOTT: Well, the liquidator relies upon - - -
KIRBY J: Well, he relies upon them, but it is not a part of the cause, it is not part of the definition of the cause that you are seeking to have removed. I mean, I may be wrong and things may have changed since I went to Law School, but letters between parties do not create the issues in the action or the cause.
MR ABBOTT: That is so. I am only endeavouring to show that - - -
KIRBY J: There is no doubt that at one point the issue of the State Act will rise squarely in these proceedings, there is no doubt about that, but the question is whether it arises now in such a way as to warrant this Court taking, on one view, an exceptional course of lifting the matter up from the court where it properly is into this Court, and particularly when one looks at convenience, that we do not have to do this. We have this issue being presented to us in other matters by other parties.
MR ABBOTT: We would say it is an unhappy accident that our applications for prohibition and certiorari have not been listed contemporaneously with this application, as indeed was the case, I think, in Transworld.
KIRBY J: Have such applications been taken out?
MR ABBOTT: Yes, they are the applications my learned friend referred are being heard in the week of 4 April.
GLEESON CJ: They are returnable for that week, are they?
MR ABBOTT: Returnable for that week.
GLEESON CJ: Have they been served?
MR ABBOTT: Yes, they have been served.
GLEESON CJ: I thought Mr Whitington told us he had not been served with them.
MR ABBOTT: My instructions are that his clients have been served and I was - - -
GLEESON CJ: And they know that those applications are returnable for 3 April, do they?
MR ABBOTT: One would assume so.
KIRBY J: Before a single Justice of the Court?
MR ABBOTT: Yes. So I say it is an unhappy accident that this matter was called on before those matters are returnable.
GLEESON CJ: It might be a happy accident, it might mean that those matters will provide an occasion to look at this point in a proper procedural form.
KIRBY J: It does seem to be premature now. It may be unhappy, but it is also premature.
MR ABBOTT: Could I take the Court also to page 178 of the application book. Just to update the Court: at paragraph 1.5 on that page, we learn the liquidator has made an:
application for a stay of his administration proceedings for the express purpose of relying on Section 11 -
and the footnote sets out one of the submissions that was made which is a clear reliance by the liquidator on the State Act.
As to the Transworld and Residual Assco matters, I adopt what my learned friend has said. It is our submission that in the Transworld matter, in which your Honour Justice Kirby sat, the prerogative writ are the main matters and could be decided on discretionary grounds, therefore not opening up a consideration of section 6 at all.
KIRBY J: Yes, well, Mr Abbott that came before me sitting alone, and because the other matter was already listed, I referred that into the Full Court and it will be listed contemporaneously with the other proceedings. Why could that not happen when these proceedings come before a single Justice in a like way if they are then mature and ready for reference into a Full Court and the Court is convinced that there is a utility in adding further parties to the argumentation of the principle issue?
MR ABBOTT: It certainly could, but I merely make the point that the Transworld proceedings may not raise for the Court's consideration, on one view, a consideration of the State Act. Similarly, in the Residual Assco Case, that may go off on a consideration only of section 11, since it is primarily a transfer application which is under attack. It may not call into play the consideration of 6, 7, 8 and 10 which we contend are the most relevant sections of the State Act.
KIRBY J: I do not want to be too technical, but could you give me a clue as to why you did not seek the return of the constitutional writs before this Court today, given that this application was before this Court now?
MR ABBOTT: I will just find that. I am instructed we did seek that, but as a matter of administration of this Court, it was deemed appropriate to list these matters and not the constitutional writs.
KIRBY J: Why would we not stand over these applications to be heard by the single Justice who is dealing with the matter, when the constitutional writs are returned before him or her?
MR ABBOTT: We have no objection to that. In fact, it might well be the appropriate course.
GLEESON CJ: We will adjourn for a short time to consider the course we will take in this matter.
AT 10.32 AM SHORT ADJOURNMENT
UPON RESUMING AT 10.33 AM:
GLEESON CJ: We are not persuaded that as the issues in the proceedings in the Supreme Court of South Australia presently stand what is proposed to be removed to this Court is part of the cause. We are of the view that Mr Whitington is correct when he submits that it would be at least premature to make an order of the kind sought. The applications for removal are both refused with costs.
The applications for prerogative relief that have been referred to in the course of argument, it is understood, will be heard before a single Justice of this Court on 3 April next and nothing that we have decided today will foreclose any decision that may be made in relation to those applications and the future of them and, in particular, whether it might not be appropriate for them to be brought on for hearing before a Full Court at the same time as other proceedings that have been mentioned in argument
MR BENNETT: Your Honour, I seek an order for costs of the notice of motion to be added as a party.
GLEESON CJ: Mr Whitington, I imagine, is the person against whose client you seek that, is that right?
MR BENNETT: No, your Honour. It is against the parties who brought the application in this Court who ought to have joined us as a party to the making of the winding-up orders as party in some of them and as a quasi-party since it was supporting creditor in others. In my respectful submission, we should have been joined. We needed to bring the motion - - -
GLEESON CJ: Who do you understand to be representing the persons against whom you seek the order for costs?
MR BENNETT: My learned friends here, your Honour.
GLEESON CJ: Mr Jackson and Mr Abbott?
MR BENNETT: Yes, your Honour.
KIRBY J: You say they brought their application for removal. You ought to have been joined. You were ultimately joined. They have lost. Therefore they should pay their costs.
MR BENNETT: Yes, your Honour, of the motion to join us. I do not seek any costs in relation to the other matter today which we took no significant role in.
GLEESON CJ: Mr Whitington, do you seek an order for costs in relation to the application for removal?
MR WHITINGTON: Yes, your Honour.
GLEESON CJ: Right. Now, Mr Jackson, there are two separate applications. What do you say about those?
MR JACKSON: Your Honours, as to the application by Mr Whitington, our summary of argument suggests there should be no order as to costs. I really cannot say anything in relation to it.
As to my learned friend's application, our submission is there should not be an order. Our learned friend - we raised no serious objection to them being joined but the underlying question of the propriety of joining them is one that, in our submission - your Honours where their claim to be a party has merit may well be in relation to the prerogative proceedings as distinct from these proceedings which seek to-
KIRBY J: This is ex post logic, though. I mean, you brought these proceedings. You have lost. It is said that you ought to have joined the Deputy Commissioner in these proceedings and he succeeded in getting an order joining him. That was all as a consequence of your application which has failed. So why should you not pay his costs as well.
MR JACKSON: Your Honour, what I am dealing with is the assumption that is contained in the middle of those propositions that your Honour put to me, and that is that we ought to have joined him. Now, bearing in mind what the Court has said about what the nature of the proceedings is in the action - - -
KIRBY J: But that is not his fault. You brought him along and that was your mistake.
MR JACKSON: We did not bring him along at all. He came along by himself.
KIRBY J: You brought him along by reason of the fact that you brought the proceedings along and he says he ought to have been here anyway.
MR JACKSON: Your Honour, that is what I am seeking to say.
KIRBY J: Nothing is more passionately argued than costs.
MR JACKSON: Your Honour, I have not, with respect, so far been able to inject much passion into it or say much about it. May I endeavour to say what I would say about it. The Court has drawn the distinction between the two proceedings: the prohibition proceedings which challenge the appointment of the liquidator at the instance of our learned friend. Your Honour, we accept the propriety of them being in those proceedings. So far as the present proceedings are concerned, these proceedings are ones which do not, as the Court has said, themselves challenge that appointment. What they do seek to say is to challenge other matters that have not yet arisen. Now, your Honours, our learned friend says, well, I should be here. But when he should be here is in two weeks time.
KIRBY J: If the Chief Justice and I differ on this order, would it be appropriate to order that you pay half the costs of the Commissioner?
MR JACKSON: Your Honour, the better course in that is to say no order as to costs.
GLEESON CJ: Mr Abbott.
MR ABBOTT: I join my learned friend. We remind the Court this was an application to remove a cause in action 409, a Supreme Court of South Australia action. My learned friend was not a party to that matter and in so far as the - - -
GLEESON CJ: That is what made me assume he must have been asking for an order for costs against Mr Whitington, because it is Mr Whitington who selected the parties for the matter.
MR ABBOTT: Exactly. When you look at it as a request to remove a cause in 409, a Supreme Court of South Australia matter, to which they are not, were not, and presumably never will be a party, we say that they should be denied their costs in this matter. If there is an appropriate matter in which they should be joined, it is A6 of 2000, the constitutional writ matter. If the Court pleases.
GLEESON CJ: Yes, Mr Bennett, is there anything you want to say?
MR BENNETT: Only this, your Honour, that the moment in the South Australian proceedings someone alleged, whether by way of challenge to a retainer, whether by way of some other matter, that the winding-up order was invalid, at that point we became a necessary party, in my respectful submission, because we are a person having an interest in defending that winding-up order, being the person who obtained it as to some of the companies. Once these proceedings were commenced in this Court, and that squarely raised that question, then, in my respectful submission, we were a necessary party. If the Court pleases.
GLEESON CJ: Thank you, Mr Bennett.
The only order for costs we will make is that the applicants for removal in matters A8 of 2000 and A32 of 2000 must pay the costs of Mr Whitington's clients.
Call the next matter, please.
AT 10.42 AM THE MATTER WAS CONCLUDED
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