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High Court of Australia Transcripts |
Melbourne No M20 of 2000
B e t w e e n -
AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION
Applicant
and
EDENSOR NOMINEES PTY LTD
First Respondent
YANDAL GOLD PTY LTD
Second Respondent
YANDAL GOLD HOLDINGS PTY LTD
Third Respondent
NORMANDY MINING LIMITED
Fourth Respondent
NORMANDY MINING FINANCE LIMITED
Fifth Respondent
NORMANDY CONSOLIDATED GOLD HOLDINGS PTY LTD
Sixth Respondent
NORMANDY MINING HOLDINGS PTY LTD
Seventh Respondent
Office of the Registry
Melbourne No M23 of 2000
B e t w e e n -
EDENSOR NOMINEES PTY LTD
Applicant
and
AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION
First Respondent
YANDAL GOLD PTY LTD
Second Respondent
YANDAL GOLD HOLDINGS PTY LTD
Third Respondent
NORMANDY MINING LIMITED
Fourth Respondent
NORMANDY MINING FINANCE LIMITED
Fifth Respondent
NORMANDY CONSOLIDATED GOLD HOLDINGS PTY LTD
Sixth Respondent
NORMANDY MINING HOLDINGS PTY LTD
Seventh Respondent
Office of the Registry
Melbourne No M24 of 2000
B e t w e e n -
YANDAL GOLD PTY LTD
First Applicant
YANDAL GOLD HOLDINGS PTY LTD
Second Applicant
NORMANDY MINING LIMITED
Third Applicant
NORMANDY MINING FINANCE LIMITED
Fourth Applicant
NORMANDY CONSOLIDATED GOLD HOLDINGS PTY LTD
Fifth Applicant
NORMANDY MINING HOLDINGS PTY LTD
Sixth Applicant
and
AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION
First Respondent
EDENSOR NOMINEES PTY LTD
Second Respondent
Office of the Registry
Melbourne No M35 of 2000
In the matter of -
Applications for Writs of Certiorari and Mandamus against THE HONOURABLE DONALD GRAHAM HILL, THE HONOURABLE ROSS ALAN SUNDBERG and THE HONOURABLE JOHN RONALD MANSFIELD, Judges of the Federal Court of Australia sitting as a Full Court
First Respondents
THE JUDGES AND REGISTRARS OF THE FEDERAL COURT OF AUSTRALIA
Second Respondents
EDENSOR NOMINEES PTY LTD
Third Respondent
YANDAL GOLD PTY LTD, YANDAL GOLD HOLDINGS PTY LTD, NORMANDY MINING LIMITED, NORMANDY MINING FINANCE LIMITED, NORMANDY CONSOLIDATED GOLD HOLDINGS PTY LTD and NORMANDY MINING HOLDINGS PTY LTD
Fourth Respondents
Ex parte -
AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION
Prosecutor/Applicant
Office of the Registry
Melbourne No M38 of 2000
In the matter of -
Applications for Writs of Certiorari and Mandamus against THE HONOURABLE JUSTICES DONALD GRAHAM HILL, ROSS ALAN SUNDBERG and JOHN RONALD MANSFIELD, sitting as the Full Court of the Federal Court of Australia
First Respondents
AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION
Second Respondent
YANDAL GOLD PTY LTD, YANDAL GOLD HOLDINGS PTY LTD, NORMANDY MINING LIMITED, NORMANDY MINING FINANCE LIMITED, NORMANDY CONSOLIDATED GOLD HOLDINGS PTY LTD and NORMANDY MINING HOLDINGS PTY LTD
Third Respondents
Ex parte -
EDENSOR NOMINEES PTY LTD
Prosecutor/Applicant
Office of the Registry
Melbourne No M39 of 2000
In the matter of -
Applications for Writs of Certiorari and Mandamus against THE HONOURABLE JUSTICES DONALD GRAHAM HILL, ROSS ALAN SUNDBERG and JOHN RONALD MANSFIELD, sitting as the Full Court of the Federal Court of Australia
First Respondents
AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION
Second Respondent
EDENSOR NOMINEES PTY LTD
Third Respondent
Ex parte -
YANDAL GOLD PTY LTD, YANDAL GOLD HOLDINGS PTY LTD, NORMANDY MINING LIMITED, NORMANDY MINING FINANCE LIMITED, NORMANDY CONSOLIDATED GOLD HOLDINGS PTY LTD and NORMANDY MINING HOLDINGS PTY LTD
Prosecutor/Applicant
GLEESON CJ
GAUDRON J
McHUGH J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON TUESDAY, 29 AUGUST 2000, AT 10.18 AM
Copyright in the High Court of Australia
May I indicate that the reason is because I do not wish to appear in those two matters because I have argued the contrary of the validity of the Cross-Vesting Act and Mr Rares will be dealing with that aspect of the matter.
MR P.R. HAYES, QC: May the Court please, I appear with MR I.D. MARTINDALE, for Edensor Nominees Pty Ltd in the various proceedings. (instructed by Clayton Utz)
MR N.J. YOUNG, QC: May it please the Court, I appear with my learned friends, MR M.C. GARNER and MR D.J. BATT, for the Yandal and Normandy parties..... (instructed by Freehill Hollingdale & Page)
MR D.M.J. BENNETT, QC, Solicitor-General of the Commonwealth: May it please the Court, I appear with my learned friends, DR M.A. PERRY and MR J.S. STELLIOS, for the Attorney-General of the Commonwealth intervening in all matters. (instructed by Australian Government Solicitor)
MR D. GRAHAM, QC, Solicitor-General for the State of Victoria: May it please the Court, I appear with my learned friend, MR S.G.E. McLEISH, for the Attorney-General for the State of Victoria intervening in all matters. (instructed by the Victorian Government Solicitor)
MR R.J. MEADOWS, QC, Solicitor-General for the State of Western Australia: May it please the Court, I appear with my learned friend, MR R.M. MITCHELL, on behalf of the Attorney-General for Western Australia intervening in all matters. (instructed by the Crown Solicitor for Western Australia)
MR B.M. SELWAY, QC, Solicitor-General for the State of South Australia: May it please the Court, I appear with my learned friend, MS R.F. GRAY, for the Attorney-General for South Australia intervening in all matters. (instructed by the Crown Solicitor for South Australia)
MR M.G. SEXTON, SC, Solicitor-General for the State of New South Wales: If the Court pleases, I appear with my learned friend, MR M.J. LEEMING, on behalf of the Attorney-General for New South Wales intervening in all matters. (instructed by the Crown Solicitor for New South Wales)
GLEESON CJ: Did the parties have an agreement between themselves as to the order in which addresses will take place?
MR JACKSON: Yes, your Honour. The proposal is that I would go first, followed by the counsel for Edensor, followed by the counsel for Yandal Normandy, followed by interveners in the following order: Victoria, Western Australia, South Australia, New South Wales and the Commonwealth. And your Honours, in terms of replies, Edensor first, Yandal Normandy and then ASIC.
GLEESON CJ: Where does Mr Rares fit into that?
MR JACKSON: In the ASIC - in the last part, your Honour. We might seek leave to fit together, if we may?
GLEESON CJ: Yes, Mr Jackson.
MR JACKSON: Thank you, your Honours. Your Honours, as the Court will be aware - - -
GLEESON CJ: Just before you go on. There is a certificate from the Deputy Registrar that she has been informed by the Deputy Registrar of the Federal Court of Australia on behalf of the judges and registrars of the Federal Court of Australia named as respondents in these matters that the judges and registrars of the Federal Court of Australia will submit to any orders of the Court save as to costs. Yes, Mr Jackson.
MR JACKSON: Thank you, your Honours. Your Honours, as the Court will be aware, these cases are concerned with the power of the Federal Court to make certain orders, and may I direct attention particularly to order 7 of the orders made by Justice Merkel which appears in volume 1 at page 140. Your Honours will see that by paragraph 7 of the orders, his Honour ordered that Edensor pay $28.5 million to ASIC for payment of that sum to shareholders in a company, the shares of which were the subject of a takeover.
Other orders, of course, were made by Justice Merkel. I will come to some of those in a little while. The underlying circumstances are set out in our written submissions in paragraphs 5 to 17. I had not proposed to go through those seriatim. The reasons which led Justice Merkel to the making of the order appear in volume 1 in his reasons at pages 127 to 132, in particular in paragraphs 154 through to 169.
As is apparent from page 128 in paragraph 158 on that page, the orders were made by reference to provisions of the Corporations Law of Victoria, those provisions being section 737 and section 739. Could I take your Honours to those provisions for just a moment, and in particular to section 737. Your Honours will see that section 737(1) refers to circumstances:
Where a person has acquired shares in a company in contravention of section 615, the Court, on the application of the Commission -
that is ASIC -
the company, a member of the company or the person from whom the shares were acquired, may make such order or orders as it thinks just, including -
various orders there set out. That takes one to two further provisions of the Act. One of them is section 615, the other is the provision which defines what is contemplated by a remedial order, and that is to be found in section 613.
Section 615 is the provision which deals with the acquisition of shares in a company taking a person beyond an entitlement to the prescribed percentage. Your Honours will see that section 615(1) is divided into two parts. The first is that:
Except as provided by this Chapter,
a person shall not acquire shares in a company if:
(a) any person who:
(i) is not entitled to any voting shares in the company; or
(ii) is entitled to less than the prescribed percentage -
May I pause there to say "prescribed percentage" is defined in subsection (7). If I can return to section 615(1)(a)(ii):
of the voting shares in the company:
would, immediately after the acquisition, be entitled to more than the prescribed percentage of the voting shares in the company -
and your Honours will see in paragraph (b):
any person who is entitled to not less than the prescribed percentage, but less than 90% of the voting shares in the company would, immediately after the acquisition, be entitled to a greater percentage of the voting shares in the company -
The term "remedial order", your Honours, is defined by section 613 and your Honours will see that a large number of orders is referred to and various types of order are there set out.
GLEESON CJ: Which is the source of the power to order a payment of money?
MR JACKSON: Section 737 or 739, your Honour. In the regard your Honours will see in the opening part of 737(1):
such order or orders as it things just -
and, your Honours, you will see that the reference to "remedial order" in paragraph (a) is not expressed to limit the generality of the earlier provision.
I have taken your Honours to section 737. May I go also to 739, which is the other provision of the Corporations Law (Victoria) and that provides that in subsection (1):
Where:
(a) a statement that purports to be a Part A statement relating to offers under a takeover scheme has been served on a target company or a takeover announcement has been made;
(b) an application for an order under this section is made to the Court by -
and your Honours will see that -
the Commission, the offeror, the target company or a person who holds shares in the target company or held shares in the target company or held shares in the target company -
and:
(c) the Court is satisfied that a provision of this Chapter has been contravened;
the Court may make -
and your Honours will see again -
such orders as it thinks necessary or desirable to protect the interests of a person affected by the takeover scheme or the takeover announcement -
Again, your Honours, we see a very broad power given. Now, your Honours will see that the primary judge made the orders to which I have referred. There was then an appeal to the Full Court and the Full Court took the view that there was no power to make the orders. Indeed, the Full Court went a little further. Could I take your Honours to what the Full Court said in volume 2 at page 269. Your Honours will see that the Full Court declared two things. The first was that order 7 of the orders made by Justice Merkel was "invalid for want of jurisdiction". The second was a declaration that:
The Federal Court......had no jurisdiction to hear and determine the proceedings -
we have -
brought -
and your Honours will see "under the Corporations Law".
Now, the reasons of the Full Court in arriving at that conclusion may be summarised, if I could put it very shortly, in this way. It was said that in Re Wakim this Court had held that State jurisdiction could not be conferred on Federal Courts. Secondly, whether the Federal Court was exercising original jurisdiction, in the stricter sense of the term, or accrued jurisdiction in purporting to make, for example, order 7, the provisions of section 58AA of the Corporations Law presented an impediment. The impediment, your Honours, was to be found in section 58AA(1), if I could take your Honours to that, in the definition of "Court". Now, your Honours will see, if I could go to that provision for just a moment, that subsection (1) says that:
court means any court when exercising the jurisdiction of this jurisdiction. Court means any of the following courts when exercising the jurisdiction of this jurisdiction -
and the courts there referred to are the Federal Court, a Supreme Court, the Family Court of Australia. What was meant by paragraph (d) is the Family Court of Western Australia, but it refers to the provision which deals with State Family Courts.
Now, your Honours, the nature of the impediment held to exist by the Full Court was that although "court" included Federal Court it did so only when exercising the jurisdiction of this jurisdiction. That meant, the Full Court said, the jurisdiction of Victoria.
Now, your Honours, that was said in relation to both accrued jurisdiction and original jurisdiction. Could I indicate where that is to be found in the passages in the Full Court's reasons. First of all, in relation to accrued jurisdiction, volume 1 at page 191 in paragraph 24 of the Full Court's reasons, their Honours said - and this is dealing with accrued jurisdiction, in paragraph 24 in the third line:
So the real question, in our opinion, is not whether the reference to the Federal Court in s 58AA is invalid as such, but whether, when this Court is seised of a "matter" by force of the accrued jurisdiction conferred upon it by the Parliament of the Commonwealth, this Court then exercises the jurisdiction of the State in which the relevant corporation is incorporated.
Now, their Honours then referred to a passage of your Honour Justice McHugh in Wakim - and this is in paragraph 25. Then your Honour had referred to what had said by Justices Mason, Brennan and Deane in Stack v Coast Securities that:
the federal jurisdiction in a proceeding are not restricted to the determination of the federal claim or cause of action in the proceeding, but extend beyond that to the litigious or justiciable controversy between parties of which the federal claim or cause of action forms part.
And then your Honours said the determination of State law issues in such circumstances is part of the accrued jurisdiction of the Federal Court.
What their Honours then said, at the top of the next page, was that:
The last two sentences of that passage -
I invite your Honours to read them at the bottom of page 191 - it was said:
are an apt description of the present case. Section 58AA.....when read with the substantive provisions.....including ss 737 and 739, purports to confer on this Court the jurisdiction of the State of Victoria. It empowers the Court to make orders under provisions such as ss 737 and 739 only when it is "exercising the jurisdiction" of that State. That is not accrued federal jurisdiction but State jurisdiction.
Now, your Honours, that is in relation to accrued jurisdiction.
In dealing with original jurisdiction, at paragraph 31 at page 194, your Honours will see there is a reference to the range of relief which section 22 permits when the court is exercising accrued jurisdiction. Then at the top of the next page, there is a reference, your Honours, will see to:
The circumstances in which the ancestors to section 22 were born do not provide any warrant for the Court, when exercising its accrued jurisdiction, to be empowered to replicate particular forms of statutory relief -
So your Honours will see that. Your Honours will also see at page 193 paragraph 28, it said:
The respondents' alternative submission relying on section 39B of the Judiciary Act 1989 has the same vice as their principal submission. Assuming, without deciding, that ASIC is the Commonwealth for the purposes of section 39B, in making orders under sections 737 and 739 the Court would be exercising the jurisdiction of the State of Victoria purportedly conferred by a State Act.
Your Honours, I think I should have given that reference rather than the first one I gave.
GLEESON CJ: Paragraph 33 on page 195 mentions section 79. Was section 79 invoked in this case?
MR JACKSON: Yes, it was.
GAUDRON J: Was it argued?
MR JACKSON: Yes, your Honour. Your Honour, that is a matter to which I intend to come, if I may. Your Honours, in our submission there are difficulties with each of the approaches taken by the Federal Court. Your Honours, I am going to turn, if I may, first to the question - if I could call it this - direct original jurisdiction, meaning by that not accrued jurisdiction. But, your Honours - - -
GAUDRON J: Why should there be a difference? There is jurisdiction in a matter. I know the origins of the expression "accrued jurisdiction", but either the Federal Court has jurisdiction in a matter or it does not. Is it not as simple as that?
MR JACKSON: It is, your Honour, however - I accept that - but it is a question of getting to the jurisdiction. Once it has jurisdiction, it has jurisdiction in the matter. May I just say, before going on, this, that the Federal Court undoubtedly - and there is no question about this - had jurisdiction under one or both of the Trade Practices Act section 52 or the mirror provision which is to be found in the ASIC Act. I will take your Honours to that a little later, if I may. So that jurisdiction was in the clearest form invoked and it was held by both courts below that there was exactly the same substratum effect.
GUMMOW J: Where did they deal with the trade practices claim in the Full Court, or did it disappear?
MR JACKSON: At page 189, I think, paragraph 14. It is dealt with, with some brevity, with respect. But the view that seems to be taken, your Honour - underlying all this, if I could put it this way, seems to be the view that because the relief that was sought reflected section 737 and section 739, that the claims that were involved were claims that necessarily involved State jurisdiction. I intend to seek to demonstrate in a moment that that is incorrect in the first place. But, they sought to invoke State jurisdiction. The statute purported to give State jurisdiction to the Federal Court. It could not do that, so it was said, and because of that, one was left with the situation where the only courts that could exercise the State jurisdiction were the courts of the State. Although one might have thought if that was right, it would be the most obvious case for accrued jurisdiction - if I could use that expression, the result that was arrived at was that there was no jurisdiction that could be exercised by the Federal Court. I am sorry to have put that in a somewhat roundabout way.
GUMMOW J: I just asked you about section 52, because section 87 is a fairly wide remedial provision.
MR JACKSON: Indeed, your Honour. Section 87 is a very, very wide provision and sometimes the ambit of it has not been fully appreciated perhaps. But it is a very wide provision to be read with section 82, for example.
McHUGH J: Perhaps I am not following this as well as I should, but why was not the jurisdiction conferred on the Supreme Court by paragraph 58AA(1)(b) itself sufficient to be invoked as part of the original or accrued jurisdiction?
MR JACKSON: Your Honour, that is what we will be submitting. Could I say two things about it: the first is that we would accept that entirely; the second thing is that if what one does is somehow treat the reference to the Federal Courts, I suppose, in section 58AA(1) as being excised because of Wakim, the case is a stronger one because it is exactly the class of case where you have State jurisdiction primarily exercisable, as is the norm, by a State court, and then the question comes whether federal jurisdiction being attracted in the ordinary way, then the laws of the State, forming part of the same matter, come to be applied.
Could I go to start, in effect, with the most narrow approach in a sense, and that is, if I could deal with the Corporations Law provisions, sections 737 and 739, and original jurisdiction itself. Yours Honours will see that if one just looks at the State law, the provisions of section 615(1) and 615(4), to which I have taken your Honours already, contain prohibitions upon the acquisition of shares and contain prohibitions on the making of offers to acquire shares in various circumstances.
A contravention attracts the operation of one of the two provisions of 737 or 739. If one goes to section 737 there are, as I submitted earlier, four persons or classes of persons who are expressed by the State statute to have standing to apply for relief under the provision. Now, one of those, of course, is the Commission. If one goes to section 739, again, there are four persons or classes of persons who may make the application. In both cases the relief available is expressed in the broadest terms, but of importance, your Honours, is that both provisions contemplate that one of the persons who may institute proceedings under the provisions is the Commission and that is defined to be the Australian Securities and Investment Commission.
That body is established not by a State statute but by a Commonwealth statute. It is established by the Australian Securities and Investment Commission Act , section 7(1). The authority for this proposition I will come to in a moment, but it is an authority of the Commonwealth and the State could not, of course, by its legislation alone give Commonwealth bodies powers and functions but the ASIC Act 1903 , if I could take your Honours to that now, provides specifically in section 11(7) that:
The Commission has any functions and powers that are expressed to be conferred upon it by a national scheme law of another jurisdiction.
So, your Honours will see the Commonwealth body has the authority of a law of the Commonwealth. The term "national scheme law" is defined in section 5(1) of that Act and could I take your Honours also, more generally in relation to this Act, to several of the provisions of it, section 1(1)(a) which says that one of:
The objects of this Act are:
(a) to provide for the Australian Securities and Investment Commission which will administer such laws of -
Your Honours will see, amongst other things, the States:
as confer functions and powers under those laws on the Commission -
Your Honours will see in section 1(2)(c), I should have said, and also section 1(2)(d) and (g).
Now, if one returns from the provisions of the Commonwealth Act to the provisions of section 737 and 739 the fact that the Commission is a Commonwealth body has an important consequence. The consequence is that when those provisions are referring to applications brought by the Commission they are, necessarily, referring to proceedings which will be in federal jurisdiction. They will necessarily be in federal jurisdiction because the Commonwealth is a party. That is of significance as a matter of interpretation of the definitions provision of section 58AA.
Now, the definition provision of section 58AA, as I have said, concerns the term "Court" with a capital "C" and your Honours will see that both section 737 and 739 speak of capital "C" "Court". Now, the expression:
when exercising the jurisdiction of this jurisdiction -
which is used in section 58AA in describing "the Court" cannot, in our submission, as a matter of interpretation of the Victorian Act be a reference simply to the jurisdiction of Victoria.
It cannot be, your Honours, because the provisions of sections 737 and 739 are referring both to federal and to State jurisdiction. The assumption which, in our submission, underlies the view adopted by the Full Court, namely that section 58AA read into 737 and 739 is speaking only of State jurisdiction, is itself wrong.
GAUDRON J: What do you say those words mean? They are intended to mean reinforcing this law, this Act, or something similar to that when called upon to enforce this Act?
MR JACKSON: Yes, and it is when it says "this jurisdiction", it is distinguishing between Corporations Law of Victoria, Corporations Law of Western Australia, and so on. Could I turn from the question of interpretation of the Corporations Law provision to the actual conferral of jurisdiction. A State of course cannot of its own motion confer federal jurisdiction whether on its own courts or on a Federal Court. One needs a federal law for that purpose.
When one comes to the position of the Federal Court, the conferral of jurisdiction is to be found in at least two sources. The first is in section 39B(1A)(a) of the Judiciary Act, the provision which says that:
The original jurisdiction of the Federal Court of Australia also includes jurisdiction in any matter:
(a) in which the Commonwealth is seeking an injunction or a declaration -
The other provision to which - - -
GAUDRON J: Did ASIC seek an injunction?
MR JACKSON: Yes, your Honour.
GAUDRON J: That is the order that was in fact made?
MR JACKSON: Yes. I will take your Honours to the application in just a moment. The other provision is section 39B(1A)(c). That is a matter:
arising under any laws made by the Parliament, other than.....any other criminal matter.
Could I deal with the first of those, matters in which the Commonwealth seeks a declaration or an injunction. That requires two things: the first that the applicant be the Commonwealth; the second that the applicant be seeking an injunction or a declaration.
May I deal with the latter aspect first - what was being sought. The further amended application appears in volume 1 at pages 29 to 30. Your Honours will see, paragraph 1 on page 29, the applicant, which is ASIC, at the top of the page seeks a declaration. Your Honours will see the terms of it, relying upon section 52 of the Trade Practices Act 1974 or, alternatively, section 12DA. Paragraph 2 of the claims for relief:
Injunctions pursuant to section 80.....alternatively section 12GD -
Paragraph 3, a declaration. What is sought in paragraph 3 is a declaration:
that by entering into.....the Shareholders Agreement.....in contravention of section 615 - - -
KIRBY J: Does your theory of the section in the Judiciary Act imply that every time an injunction is sought in the Federal Court, no matter for what, that attracts the jurisdiction of that court?
MR JACKSON: By the Commonwealth, your Honour.
KIRBY J: No matter what the injunction is sought forth?
MR JACKSON: Well yes, your Honour, because the terms of section 39B(1A)(a) are not limited in terms of subject matter. Your Honour, if I could just go back one stage, all that is required for there to be federal jurisdiction in the first place is that the Commonwealth be a party.
Now, in terms of the conferral of jurisdiction, the Parliament has a choice whether to confer that jurisdiction on a Federal Court, the State courts or both and in dealing with that, your Honours, the choice that has been made is to give the Federal Court jurisdiction in proceedings where particular forms of relief are claimed by the Commonwealth. Wider jurisdiction could have been given, your Honour, but has not. So that all that is required is, not really very surprisingly in relation to the various means of conferral of federal jurisdiction, that a particular form of relief claimed attracts the jurisdiction.
Your Honour, could I also say, in addition to the jurisdiction that may be given by specific enactments to the Federal Court, as referred to in section 19 of the Federal Court of Australia Act, one does also, in terms of the breadth of jurisdiction, have the very wide jurisdiction conferred by section 39B(1A)(c), which refers to "any matter":
arising under any laws made by the Parliament -
So that, your Honour, what one does see is that the Federal Court is given a very wide jurisdiction.
Your Honours, if I could just go to section 39B for a moment, your Honours will see that the way in which the provision of section 39B(1A)(a) is expressed is simply to fasten upon the form of relief claimed, so one looks to see what relief is claimed and then there is the matter - jurisdiction is conferred in the matter in which that relief is claimed.
Now, your Honours will appreciate, if one goes to the Constitution for a moment, that, for example, section 75(v) is one which selects the form of relief claimed as the criterion by which a matter is or is not federal jurisdiction. So that, your Honours, it is not an unusual thing, in a sense, to find that that form is adopted; a different way, of course, in the particular case, but not surprising that that be so. Of course, your Honours, following the Courts decision in Abebe, one could have jurisdiction conferred in part of a matter, but that has not been the way in which section 39B(1A) operates.
CALLINAN J: But, Mr Jackson, do you say that you do not need any head of power under section 51 in order to confer the jurisdiction, simply because the Commonwealth is a party sitting?
MR JACKSON: Yes.
CALLINAN J: Well, you do not get it out of section 75, do you? It is just the High Court, is it not?
MR JACKSON: Well, your Honour, except that one goes to section 77 and section 75 and 76 define the ambit of federal jurisdiction and your Honours will see section 75(iii) deals with matters -
in which the Commonwealth.....is a party -
unlimited, your Honour, as to subject matter.
GUMMOW J: Well, contract would be an example.
MR JACKSON: Yes, indeed, your Honour. It could be really any class of matter in which the Commonwealth is a party, which gives this Court original jurisdiction and then section 77(i) deals with the position in Federal Courts.
CALLINAN J: Yes, section 77(i) is the real source of the power.
MR JACKSON: Yes, and your Honour will see, if I could just say this, the way in which section 77 is prefaced refers to the matters mentioned in the last two sections and those matters are relevantly section 75(iii):
in which the Commonwealth.....is a party -
and, with respect to that matter, the Parliament may make a law defining the jurisdiction in the Federal Court, which is what section 39B(1A)(a) does.
CALLINAN J: And it could have been much wider on that submission than cases in which the Commonwealth is seeking a declaration or an injunction.
MR JACKSON: It could have been, your Honour, in matters in which the Commonwealth is a party.
HAYNE J: Just before you leave the application, Mr Jackson, do we find in there any specific prayer for relief for the payment of money to those who had disposed of their shares?
MR JACKSON: Specific, no, your Honour, but paragraph 7 is the claim for further or other orders as the nature of the case might require.
HAYNE J: And was there any representative party of those who had disposed of their shares?
MR JACKSON: No, your Honour, except in a sense for us, forASIC, but no, your Honour, the answer is no.
HAYNE J: They being persons who themselves had standing to make application under 737 and 739?
MR JACKSON: Yes.
HAYNE J: It is not self-evident to me that they should not have been the representative party but perhaps that is by the by. Perhaps it is not.
MR JACKSON: Your Honour, this case, of course, has not really got beyond the Full Court of the Federal Court dealing with the question of jurisdiction. The propriety of the making of the various orders is a matter the subject of appeals yet to be completed.
HAYNE J: Yes.
MR JACKSON: And, your Honour, in that, no doubt, issues of that kind could be agitated and that may well involve questions of construction as well as anything else. But, your Honours, I was taking your Honours to pages 29 and 30 and I had referred, I think, to paragraphs 1, 2 and 3 but could I come then, your Honours, to paragraph 4 which again sought a declaration and paragraph 5 sought orders vesting shares and directing the applicant to do various things.
Now, your Honours will see, if one looked at the forms of those orders, it may be that one could say they are themselves claims for injunctions or injunctions within the terms of there being mandatory injunctions or matters of that kind but, in any event, your Honours will see that certainly the case was one where the jurisdiction of the Federal Court was enlivened. In particular, your Honours, if I could just go to paragraphs 3 and 4, declarations were sought in relation to the provisions of the Corporations Law section 615.
Now, your Honours, all that is required for the Court to have jurisdiction in addition is that the applicant be the Commonwealth and, your Honours, in our submission, the Court's decisions suggest that a Commonwealth authority such as ASIC will be the Commonwealth for the purposes of section 39B(1A)(a). Could I, in that regard, refer your Honours to three decisions of the Court? One is Deputy Commissioner of Taxation v State Bank of New South Wales [1992] HCA 6; (1992) 174 CLR 219. The relevant passage, your Honours, in the joint reasons of the Court appears at page 232 commencing about point 2 on the page and going through to page 233 about point 8.
Now, your Honours, could I say that the point which we are seeking to advance to make out of these cases is that one sees in the terms of the Judiciary Act the words "the Commonwealth", "in which the Commonwealth is seeking an injunction or a declaration".
Now it is true to say immediately, of course, that ASIC is not the Commonwealth eo nomine, as it were, but our learned friends seek to make a point that because the Constitution speaks of the Commonwealth or -- the person suing or being sued on behalf of the Commonwealth that we fall into the latter category, and because section 39B excludes the latter category, therefore there was no jurisdiction pursuant to 39B(1A)(a).
Now, your Honours, that issue is one which has found no favour, with respect, with the Court. Your Honours will see in Deputy Commissioner of Taxation v State Bank (NSW), in the first new paragraph on the page, there is a reference to the fact that the Parliament may set up a corporation and then about five lines into the paragraph:
To the extent that the course of decisions turns on the provisions of s. 75(iii).....there is the complication arising from the reference in that provision to "or a person suing or being sued on behalf of the Commonwealth".
It was said, and your Honours will see the remainder of that paragraph:
that circumstances cannot operate as a reason for reading the references to the Commonwealth in the Constitution in a restricted -
way. Then, your Honours, there is a reference to Inglis v Commonwealth Trading Bank where:
there was a difference of opinion.....whether the Commonwealth Trading Bank was "the Commonwealth" or "a person ... being sued on behalf of the Commonwealth" -
Then your Honours will see that in the reference to Maguire v Simpson where:
the Court decided that the Trading Bank was "the Commonwealth" for the purposes of s. 64 -
Then their Honours say:
That decision established that, in an appropriate context, the words "the Commonwealth" are wide enough to include a corporation which is an agency or instrumentality of the Commonwealth.
Then:
the words "a State" have a similarly wide meaning.
There is a reference to Crouch and then, your Honours, the second new paragraph on page 233:
There is no reason for drawing a distinction between the reference to "a State" in s. 75(iv) and similar references elsewhere in the Constitution where the reference is to a State as a polity -
Now, your Honours will see that case supports the general proposition that the term "Commonwealth" should not be defined narrowly. Very recently, this Court, in Austral Pacific Group Ltd v Airservices Australia in (2000) HCA 39, dealt with the same issue in relation to section 64 of the Judiciary Act. In paragraph 10 in the joint reasons of your Honours Chief Justice Gleeson and Justices Gummow and Hayne, your Honours said in, I think, the last five lines of that paragraph:
Secondly, Airservices was established as a body corporate by s 7 of the Airservices Act to perform such functions as the provision of facilities to permit safe aircraft navigation within Australian-administered airspace..... This and other provisions of the statute indicate that Airservices is a Commonwealth agency or instrumentality which is included in the term "the Commonwealth" in s 75(iii) of the Constitution.
Then, your Honours, in paragraph 14:
Airservices is a body corporate which, while it is charged with the performance of what may be classed as governmental functions, is not part of the executive government of the Commonwealth. Airservices is sued by Austral Pacific as the Commonwealth within the meaning of s 75(iii) -
and then at the end of the next paragraph 15:
The reasoning which in Maguire v Simpson -
and your Honours will recall that was referred to in the State Bank (NSW) Case -
led to the conclusion that the Commonwealth Trading Bank was "the Commonwealth" for the purposes of s 64 would apply to Airservices.
Your Honour Justice McHugh, in paragraph 48, referred to section 75(iii) and said:
In a number of cases, the Court has held that various Commonwealth statutory corporations were persons "suing or being sued on behalf of the Commonwealth"..... In Inglis.....however, the Court expressed a difference of opinion on the question whether the Commonwealth Trading Bank was "the Commonwealth" or "a person suing or being sued on behalf of the Commonwealth". In Maguire v Simpson the Court decided that the Commonwealth Trading Bank was "the Commonwealth" for the purposes of s 64..... In a number of cases, a Commonwealth statutory corporation was simply held to be within some part of s 75(iii).
Then your Honour referred to Deputy Commissioner of Taxation v State Bank and said:
Although nothing turns on it in this appeal, the better view is that, in both s 75(iii) of the Constitution and s 64 of the Judiciary Act, "the Commonwealth" includes Commonwealth statutory corporations or authorities like the third party in the present case.
Your Honours, in our submission, no difference would be drawn between that body and the present body. Indeed, as I will seek to demonstrate in a moment, the situation would be a fortiori.
CALLINAN J: I think the Commission is subject to directions by the Minister and all the members are appointed by the Governor-General, are they?
MR JACKSON: Yes, and the staff are employed as public servants.
KIRBY J: Are there agencies of privatised bodies that have been held not to be the Commonwealth?
MR JACKSON: I am sorry, your Honour?
KIRBY J: Are there agencies, in order to draw the line, that have been held not to be the Commonwealth, so that we can find what is the discrimen.
MR JACKSON: Well, your Honour, there is a line of cases really, in the sense. The line diverts into two parts, if I can put it that way. If one looks at cases such as the Superannuation Fund Investment Trust in South Australia, in relation to the approach to be taken as to whether attracts the - the approach taken there was one based on whether the body attracts, in a sense, the immunities of the Crown, that is - one line, in effect goes that way.
The other line is, in a sense, the broader line dealing with the constitutional provisions more specifically. That is to be found in the State Bank of New South Wales, a case to which I have referred, Crouch v The Commissioner for Railways, and the other cases to which I have adverted. In dealing with where one would fall one side of the line or the other, the critical thing seems to be, for whatever purpose, an analysis of the constating statute.
Your Honours, it may be, however, that in some cases it is appropriate to look not only at the statute, but also at the functions which are, in fact, performed. I say that because it is recognised - and I will just have to check it to give your Honours a reference - that a body which is to be treated as, for example, the Commonwealth, or a State, as the case may be, might not be just bodies which satisfy the test of being created by statute. What I mean by that, more particularly, is that if one took a company formed in the ordinary way in which all the shares were held by the Commonwealth, it may be that that would be treated, for constitutional purposes, as the Commonwealth. May I give your Honours a reference to that a little later.
KIRBY J: I am just wondering if Qantas Airways Limited would now be the Commonwealth within this criterion. The more corporations are privatised, fully privatised, the further they will get away from the Commonwealth. But anyway, you do not have to go that far because there are many indicia in your Act which appear to point in the opposite direction and bind you into the Executive Government's activities.
MR JACKSON: Yes. Your Honour, I have said there are two lines, really, in this. One line is the line that is possible for the Commonwealth to change, in effect. The Commonwealth can say as it chooses that for various purposes a body is or is not to be treated as being the Crown or the Commonwealth. However, for constitutional purposes, that is a matter which, in the end, is to be decided by a court or the Court in the end. But, what I was going to say was, if one comes - - -
KIRBY J: I do not want to delay you, but Justice Gummow and I in Mewett, I think, said something about the use of the notion of Crown in relation to the Commonwealth. I certainly wonder whether it is really - I know it is often used, but I question whether it is not a confusing notion to introduce into - - -
MR JACKSON: Well, it can be, but the circumstances in which the issue may well arise would be where a statute, not say of the Commonwealth, but a statute of a State, refers to the Crown, and the question is where does the Commonwealth body fit in relation to that? So that, no doubt, the description has, as time has developed and shown, it hass inappropriate applications, but for the moment, in some applications, it is with us.
KIRBY J: There is an essay about this in the latest part of the Federal Law Review which deals with this problem.
MR JACKSON: I was going to give your Honours a reference to, without taking your Honours to the various passages, Maguire v Simpson [1977] HCA 63; 139 CLR 362. The relevant passages are at page 389, point 1 to point 7 - that is Justice Gibbs - page 397, point 2 to 398, point 2, Justice Mason; page 405, point 9 to page 406, point 7, Justice Jacobs; and page 407, point 7, Justice Murphy.
That gives rise to the question that I have postponed dealing with, and that is, is ASIC, relevantly, the Commonwealth? That turns, in our submission, upon the construction of the ASIC Act. May I take your Honours to that, and at the same time refer your Honours to our written submissions, paragraphs 24 and 25. If one does go to the ASIC Act, I have taken your Honours to the objects already in section 1 and to some of the aims in section 1(1), and to the aims in section 1(2). If one goes to section 7, the Australian Securities Commission is established by subsection (1) and the present name is given by subsection (2). Its establishment as a body corporate is dealt with by section 8. Section 9 provides for its membership. The appointment, as your Honour Justice Callinan mentioned, in section 9(2) is by the Governor-General. Your Honours will see when one comes to section 10, the appointment by the Governor-General of someone to chair the Commission.
Your Honours will see then if one goes to section 12(1):
The Minister may give the Commission a written direction about policies it should pursue, or priorities it should follow, in performing or exercising any of its functions or powers.
Now your Honours, we would refer also to the matters to which we referred in footnote 36 of our written submissions and also to what is said by the Commonwealth in its submissions on the same issue at page 4 in paragraph 2.3. So we would adopt what is said on that aspect by the Commonwealth
Now, your Honours, so that in our submission it is really a case where the Federal Court, we would submit with respect, clearly had the relevant jurisdiction pursuant to paragraph (a) of section 39B(1A).
Your Honours, that was not, however, the only source of direct original jurisdiction. Your Honours have seen that by paragraph (c) of section 39B(1A), the Federal Court has jurisdiction in matters arising under a law made by the Parliament. Under the ASIC Act, if I can put it shortly, the functions and powers of the body are conferred relevantly in two ways. The first way is directly by that Act itself, or by other federal laws. The other way is by reference to laws of other jurisdictions.
As to the first of those, your Honours, directly by the Act itself, could I give your Honours an instance of where one finds that. It is in section 12A where it is said:
The Commission has the functions and powers that are conferred on it by or under Division 2 or Part 2 of this Act and by or under the following Acts -
Your Honours, as to the conferral of powers by reference to laws of other jurisdictions, your Honours have seen section 11(7) which says that:
The Commission has any functions and powers that are expressed to be conferred on it by a national scheme law of another jurisdiction.
Now, your Honours, if I could go back to our written submissions for just a moment to paragraph 31 of those - - -
KIRBY J: Could you remind me if the "national law scheme" is defined.
MR JACKSON: Yes, it is, your Honour. It is defined - - -
KIRBY J: It is in section 11, is it not?
MR JACKSON: Yes. It is defined, your Honour, at the bottom of page 63107 of the copy I have, but it is defined in section 5(1) and then at the top of the next page - that is national scheme law - and then national scheme law of this jurisdiction is then defined. Your Honours, perhaps I should also refer to the fact that section 2 of the Corporations Law of Victoria provides that:
Subject to the ASIC Law of this jurisdiction, the Commission has the general administration of the Corporations Law of this jurisdiction.
Your Honours, I was going to refer to paragraph 31 of our written submissions where we quote the well known passage from Chief Justice Latham in The King v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett [1945] HCA 50; (1945) 70 CLR 141 at 154. That is, that the matter arises in federal jurisdiction:
if the right or duty in question owes its existence to Federal law or depends on Federal law for its enforcement.
And your Honours - - -
GAUDRON J: I am missing a page of your submissions which relates to that - page 9. In due course, could you make one available.
MR JACKSON: Yes, I can, your Honour.
GAUDRON J: No, I found it.
GUMMOW J: It has been missed. There is some error in paralegal somewhere. We have them but they are out of order, and we are rectifying it.
MR JACKSON: Your Honour, I am sorry. I was referring your Honours to paragraph 31 on a page numbered 9, and it refers to a matter of federal jurisdiction where:
the right or duty in question owes its existence to Federal law or depends on Federal law for its enforcement.
And your Honours, the point we would seek to make is that for one or both of the reasons set out in paragraphs 29 and 30 of our written submissions, there was a matter arising under a law of the Commonwealth. Your Honours will see that section 11(7) of the ASIC Act says:
The Commission has any functions and powers that are expressed to be conferred on it by a national scheme law of another jurisdiction.
And it is, by sections 737 and 739, given the status to apply for relief.
If one is looking to see how the matter would arise, the matter arises because by the operation of the federal law in section 11(7) taken together with the State provisions that are, if I could use the expression, picked up by its operation, there is then a matter arising under the ASIC law.
If I could say something, in summary in effect, in relation to original jurisdiction directly conferred, what we would submit is this, that inevitably the expression used in section 58AA, "when exercising the jurisdiction of this jurisdiction", has a meaning which includes the circumstances in which the exercise of federal jurisdiction is being spoken of. That comes about because the Commission is given the ability to apply for relief under sections 737 and 739 and a Commonwealth law, the ASIC Act, gives Commonwealth authorisation for that to occur and the Judiciary Act confers the relevant jurisdiction.
GUMMOW J: That way of looking at it would walk around Smith v Smith, would it not?
MR JACKSON: Indeed, your Honour, yes.
GUMMOW J: That way of looking at 58AA as you have construed it.
MR JACKSON: Yes, your Honour, because one does have to look at 58AA first of all as a matter of interpretation, and it just is not limited to State jurisdiction.
GUMMOW J: Yes, because of its express engagement of the Commission through the other sections.
MR JACKSON: Yes. It is reflected in two possible ways, one being 39B(1A)(a) or (c). In those circumstances that would be a clear conferral of jurisdiction absent any application to the Federal Court under any other provision. Could I move then to accrued jurisdiction.
GAUDRON J: Before you come to that, you do not rely on section 12DJ of the ASIC Act?
MR JACKSON: I am coming to that now, your Honour.
GAUDRON J: I am sorry.
MR JACKSON: What I was going to say was that it was clear, in our submission, that the Federal Court had a jurisdiction in any event because of the claims that there had been contraventions of section 12DA of the ASIC Act and the mirror provision, section 52 of the Trade Practices Act. Could I take your Honours to section 12DA. Your Honours will see that section 12DA says that:
A corporation must not, in trade or commerce, engage in conduct in relation to financial services that is misleading or deceptive or is likely to mislead or deceive.
"Financial service" is a term which your Honours will see defined in section 12BA(1):
financial service means a service that:
(a) consists of providing a financial product; or
(b) is otherwise supplied in relation to a financial product.
That term immediately defined above it includes:
(b) a security -
The term "security" - - -
KIRBY J: What is the point of the footnote, the exclusion of: "dealings in securities"? There is a footnote in the compilation of legislation:
This section does not apply to dealings in securities.
Page 15 of the compilation.
MR JACKSON: I am sorry, your Honour is ahead of me.
KIRBY J: I am sorry. I am working off a compilation which we have been handed of the joint relevant statutory materials and footnote 2 on page 15 to this section, section 12DA, says that by virtue of the Corporations Law you can - - -
McHUGH J: That was not in force.
MR JACKSON: That was not in force at the relevant time, your Honour.
KIRBY J: I see. Why are we favoured with that footnote? Does it have some relevance?
MR JACKSON: I think one of the reasons is that the court likes to know when Acts have been amended. That is the position, put shortly.
GAUDRON J: "Financial service" is defined in section 12BA?
MR JACKSON: It picks up "financial product" your Honour.
GAUDRON J: Yes.
MR JACKSON: "Financial product" is then defined immediately above it and "financial product" includes securities.
GAUDRON J: Yes.
MR JACKSON: To find out where one gets the definition of securities from your Honours will see that section 5(3) of the ASIC Act picks up the definitions that are found in the Corporations Law and section 92 of the Corporations Law defines "securities" to include "shares".
HAYNE J: Therefore, how does the amplified definition operate in this case? "A corporation must not, in trade or commerce, engage in conduct in relation to" providing a financial product being a security. Is that the way it was said to be engaged?
MR JACKSON: Well, it is either, your Honour, a service that is otherwise supplied in relation to a financial - to a share, or consists of providing a share. Probably the latter rather than the former. The latter, probably.
HAYNE J: So providing the share, was it?
MR JACKSON: No, I said probably the latter, meaning (b) rather than - - -
HAYNE J:
otherwise supplied in relation to - - -
MR JACKSON: Yes.
HAYNE J: What is not clear to me is what was said to be the service otherwise supplied in relation to a security.
MR JACKSON: "Service" is defined, as your Honour will see, very widely, to:
includes any rights (including rights in relation to, and interest in, real or personal property):
And a right in relation to a share in relation to the acquisition of a share would be within that concept, in our submission.
HAYNE J: I suppose there is a more complex way of saying it, Mr Jackson. I am sure parliamentary counsel will find it presently.
GUMMOW J: It could be a dangerous challenge.
MR JACKSON: However, your Honour, I was taking your Honours to 12DA and your Honours will see that it has language which reflects, if I can put it that way, section 52 of the Trade Practices Act.
GUMMOW J: The rationale of all of this is to take out of the bailiwick of the ACCC this sort of activity and put it in the bailiwick of ASIC, is it not?
MR JACKSON: Yes. Now, your Honours will see in relation to the claims for relief, if I could take your Honours back to page 29, that there was a claim in paragraph 1 for a declaration that:
the first respondent ("Yandal Gold") has engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, contrary to section 52 of the Trade Practices Act or alternatively section 12DA of the Australian Securities and Investments Commission Act 1989 .
Then, your Honours, at paragraph 2 claims for:
Injunctions pursuant to section 80 of the Trade Practices Act 1974 alternatively section 12GD -
which was the provision to which your Honour Justice Gaudron referred earlier and your Honours will see section 12GD which is the power to grant injunctions so that one sees that the claims for relief clearly engaged federal jurisdiction. I said, your Honour, "refer to 12GD". I think it was 12GJ.
GAUDRON J: Yes.
MR JACKSON: Which is the provision I take your Honours to that gives the Federal Court exclusive jurisdiction and your Honours will see that:
Jurisdiction is conferred on the Federal Court in any matter:
(a) arising under this Division; or
(b) arising under Part 3 -
and the exclusive jurisdiction, your Honours, is paragraph 12GJ(4).
GAUDRON J: On one view of this there would be no jurisdiction in State courts.
MR JACKSON: Yes, your Honour.
GAUDRON J: I mean, even if the relief under the Corporations Act 1979 were segregated out, even if it had been the case that somebody had brought two proceedings as it suggested should have happened in one of the submissions, on your analysis of the ASIC Act, relief could not be sought in the Supreme Court with respect to the Corporations Law
MR JACKSON: That is so, your Honour, yes, which seems, with respect, an extraordinary result.
KIRBY J: Now the exclusive jurisdiction is subject to subsection (2). Subsection (2) purports to confer jurisdiction in certain cases "on the several courts of the States" and to an extent the Constitution on the "courts of the Territories".
MR JACKSON: Your Honour will see at 12GJ(2):
With respect to any matter arising under this Division in respect of which a civil proceeding is instituted by a person other than the Minister or the Commission -
the States have "federal jurisdiction", the "courts of the States" have "federal jurisdiction", but that is not conferring jurisdiction in cases where the Commission applies.
Now, your Honours, both courts below held there was a common substratum of fact for, on the one hand, the claims based on the Trade Practices Act and the ASIC Act and on the other - - -
GUMMOW J: Just before you leave these provisions, section 12GM would be the equivalent, I think, of section 87 of the Trade Practices Act and although not stated as made in reliance on section 12GM, it may mean that the orders Justice Merkel made would answer 12GM if that were needed as a support.
MR JACKSON: Yes, your Honour. The difficulty with that subsection (3), and that is because the - - -
HAYNE J: You come back to want of parties, do you not?
GUMMOW J: Yes.
MR JACKSON: Yes, that is the problem, your Honour, yes.
HAYNE J: Subsection (1) and (2), you have not got the right parties; (3) you are not suing on behalf of the relevant selling shareholders.
GUMMOW J: Yes, that is right.
MR JACKSON: Your Honours, the point I was seeking to make was that both courts below held there was a common substratum of fact for the two groups of claims. Your Honours will see that in Justice Merkel in volume 1 at page 113, the paragraph which has the same number, and your Honours will see in the third line of that paragraph:
As the contraventions of section 615 and the -
subsequent -
misleading conduct are not "severable", "distinct" or "unrelated" and arise from a "common substratum of facts", the Court has accrued jurisdiction to determine the whole of the matter in controversy.
The Full Court at page 190, paragraph 21, said that the primary judge:
was correct in finding that there was a common substratum of fact which conferred on the Court jurisdiction to decide the whole "matter" the whole controversy between the parties.
Now, your Honours, in our submission, it is clear that the essence of what has been called "accrued jurisdiction" is that it allows the Federal Court to exercise jurisdiction with respect to the whole of the controversy, including issues arising under laws of the State. It would not be much point in having it if it did not do that. Could I, in that regard, your Honours - - -
GAUDRON J: Are we really talking about - and again I am being pedantic I am sorry, but what you are really talking about, when you use "accrued jurisdiction" is to give remedies with respect to the matter which are not necessary provided by State law?
MR JACKSON: What your Honour puts to me is correct, because there is really no point in having accrued jurisdiction unless in the end it comes down to questions of remedies, because otherwise the issue is in the air. If one takes, for example, the provisions of section 39B(1A)(a), there are applications for, for example, declarations or injunctions on behalf of the Commonwealth. Now, it may be that, in particular cases, the only remedies that are made available are for injunctions or declarations of a particular kind. Now, your Honours, if there is a accrued jurisdiction with respect to the matter, as your Honour says, it enlarges the range of possible remedies.
McHUGH J: It must be subject to considerable limitation, must it not? For example, supposing the remedy is of a non-judicial kind, do you assert that a Federal Court, in the exercised of federal jurisdiction, can give effect to such a remedy?
MR JACKSON: No, your Honour, I would not, the reason being that, really, I suppose, section 71, because what the Constitution requires is that what is exercised be judicial power.
McHUGH J: What about the case of statutory tribunals which may exercise judicial power of a kind? I have in mind anti-discrimination tribunals, some industrial tribunals making orders in respect of contracts, and so on. Could the Federal Court exercise those remedies?
MR JACKSON: Well, your Honour, the answer, with respect, must depend on the particular cases. But the answer, I suppose, would sometimes be yes, sometimes no. Why I say that is because there must inevitably be, as your Honour said, some limitation and in many cases the nature of the jurisdiction conferred is such that it ties up with the persons who may exercise it. There must be some limitation of that kind because jurisdiction is not always conferred simply in the abstract or to be exercised in a different way by the ordinary courts. The other feature of it, your Honour, is that that is one of the reasons, in a sense, why one sees that the exercise of the accrued jurisdiction is not mandatory, in a sense.
GAUDRON J: But how can that be? I mean, if a court has jurisdiction, it has to exercise it. Now, that notion of discretion really came in by reference to accrued jurisdiction, but if you take the view that you either have jurisdiction or you have not, in the same way as you cannot be a little bit pregnant, the jurisdiction must surely fall for exercise, must it not? At the end of the day, the question is whether section 79 picks up the relevant State law that provides the special remedies, is it not?
MR JACKSON: Well, your Honour, so far as the discretionary aspect of the jurisdiction is concerned, I do not, in a sense, either particularly advocate it or not advocate it in the sense that it seems to be a view that has been adopted starting, I think, from Stack v Coast Securities, essentially - - -
GAUDRON J: Yes. Well, what I am suggesting is it really does not withstand a lot of scrutiny.
McHUGH J: Well, Julius v Lord Bishop of Oxford would mean that if you have jurisdiction, you have to exercise it.
GUMMOW J: Ward v Williams.
MR JACKSON: Well, your Honour, of course, but your Honour would appreciate also that some jurisdictions are - some types who carry within them a discretionary element, if I can put it that way.
GAUDRON J: Can we test it in this way, on your argument? Let us assume that it is correct that the Federal Court had jurisdiction, as the Federal Court has held in the matter, and the Federal Court said, "Yes, indeed, I have jurisdiction under the Victorian Corporations Law, but as a matter of discretion I'm not going to exercise it, and the reason for the exercise of that discretion is I think it would be better if proceedings were brought in the State court".
MR JACKSON: In circumstances like that, your Honour, there would be an ability to appeal from that decision. The existence of an appeal would not really affect one way or the other the matter which your Honour is putting to me in the sense that if it be that the jurisdiction must be exercised, then the judge would have been in error in not exercising it.
GAUDRON J: Because there are clear exceptions for failure to exercise jurisdiction, like abuse of process or forum non conveniens, but the general view is you have to exercise it.
MR JACKSON: Yes, your Honour, except in cases where inherently the jurisdiction may result in there being no order, but I appreciate that itself can be an exercise of jurisdiction.
HAYNE J: But it is jurisdiction over the matter; it is jurisdiction in respect of the controversy. What you may do in resolution of the matter of controversy may present a series of questions but, at least at first blush, it seems to me that the first port of call is: matter, jurisdiction over the matter, and then one comes to what one can do in resolution of that controversy. That may perhaps indirectly invite questions of the kind that were addressed in Abebe and the relationship between relief and the like and the identification of the controversy, but to speak of jurisdiction without the tag "jurisdiction in respect of the matter" may perhaps lead us into error, may it not?
MR JACKSON: Certainly, your Honour, because inevitably in federal jurisdiction one is speaking of a matter or, consistently with what was said in Abebe, the jurisdiction that has been given with respect to part of the matter.
HAYNE J: If the Federal Court, for example, were to have general diversity jurisdiction, simply pick up 75(iv)?
MR JACKSON: Yes, your Honour.
HAYNE J: The raft of problems thus identified might be quite large.
MR JACKSON: It may be, your Honour, but the nature of diversity jurisdiction, being a matter arising between residents of different States, would, in our submission, necessarily carry with it the notion of a controversy from whatever law source might be the case, be it the general law or be it the law of a State or the law of States or a Commonwealth law, but it would be that law in a sense which fell to be dealt with as the matter. The point I am trying to make is that the matter would not change because it would then come to be decided in federal jurisdiction. If I could just say one other thing, it would be very difficult in circumstances like that to treat provisions having the supposed effect that the Full Court gave in this case as somehow inapplicable to the diversity jurisdiction because they only spoke of, say, the Supreme Court of a State.
HAYNE J: The example, prompted by Justice Gummow, that I have in mind is diversity jurisdiction in respect of a further provision out of a will. The further provision statutes will undoubtedly be tied, or almost invariably tied, to a particular Supreme Court. But does that mean that diversity jurisdiction can never be invoked in respect of such a claim?
MR JACKSON: If it did, that would seem to be to defeat the constitutional purpose of having the diversity jurisdiction. Another example might be if one took the simple personal injury cases, of which there were many in this Court in days gone by, where a State jurisdiction or say, for example, both State jurisdictions, said that proceedings could not be brought in the Supreme Court of either State but had to be instituted in, say, the District or County Court of that State. It would be a curious result, in respect of provisions of the diversity jurisdiction in the Constitution, if that had the result that a federal court could not deal with the matter.
McHUGH J: Mr Jackson, I am probably confused, but I was under - and I think it might be a misapprehension, that originally in your argument you were asserting that the Federal Court had primary or original jurisdiction in respect of the matters that are raised under section 737, 739 and 58AA. Do you assert that?
MR JACKSON: Oh, yes, I do, your Honour.
McHUGH J: I have difficulty with that. I can understand the notion clearly enough that they have got original jurisdiction in respect of the Trade Practices Act or section 12DA of the ASIC Act, and as part of that common substratum effect, brings in the matters under sections 737, 739 and 58AA, but can you just explain to me again how it is that the Federal Court gets original jurisdiction under the Victorian Corporations Law, sections 737 and 739?
MR JACKSON: I was at the moment dealing with accrued jurisdiction. May I just go back to that? What I was seeking to say was this, that you have a situation where the provisions of the Victorian Act in sections 737 and 739, identify as a person, was a potential application for orders under those provisions - - -
McHUGH J: Yes, I understand that.
MR JACKSON: The Commonwealth, to put it shortly. Without more, that would not be good enough. Where does one get the "more" from? The more comes from section 11(7) of the Commonwealth Act which gives the Commission the power to do those things.
McHUGH J: I understand that, and that authorises it to start proceedings in the Victorian Court and to enforce the Victorian law, but I would have thought in the Victoria Court, where does the Federal Court come in as a matter of original jurisdiction?
MR JACKSON: It comes in, because - your Honour, could I just pause to say that what is given by sections 737 and 739 on the one hand and section 11(7) on the other, is the power to take proceedings of that kind.
McHUGH J: But two separate sources of power, one State, one federal.
MR JACKSON: Well, the federal one authorises doing what the State law endeavours to authorise but could not efficaciously do so without Commonwealth law. That being so, one then looks to see in what courts proceedings may be brought by the Commonwealth. One of the courts is the Federal Court, and that is because in proceedings in which the Commonwealth seeks a declaration or injunction, the Federal Court is given jurisdiction. What is sought in the present proceedings was a declaration or an injunction in relation to the provisions of section 615 - contraventions of section - - -
McHUGH J: I understand that. It just seems to me there is something wrong with it. I am not sure I can put my finger on it.
MR JACKSON: That is because there is nowhere, with respect, to put the finger, we would submit, or that it comes out the other side of the marshmallow. But, your Honours, if one takes the basic, the Federal Court had - - -
McHUGH J: Yes, I know. It is easy enough to see that 39B gives the Federal Court jurisdiction where the Commonwealth is a party, but your proposition is that 39B extends to give the Federal Court jurisdiction whenever the Commonwealth could sue in any State court. Is that not what it comes to?
MR JACKSON: The way in which your Honour puts it to me eschews the question, with respect, in two respects. The first is where your Honour says "extends to", and we would say it simply does in the ordinary way. And then your Honour refers to suing in the State court. Could I just say, your Honour, that if one construes the State statute for the moment, it does not say that the only court in which it contemplates that proceedings could be brought would be a court of the State. Rather, it says the opposite. It says Federal Court, State court, Family Court or a State Family Court.
McHUGH J: Yes, I know, but so far as the Federal Court, based on the notion which this Court in Wakim struck down.
MR JACKSON: Your Honour, with respect, in Wakim, the Court said that there could not be a conferral of purely State jurisdiction. Now, your Honour, that is the point we would seek to make.
McHUGH J: That is what I was putting to you. Why is not the 737, 739 jurisdiction purely State jurisdiction?
MR JACKSON: It is not purely State, your Honour, because one has a reference to the ability of the Commission to bring proceedings. The ability of the Commission to bring proceedings means, assuming the Commission is the Commonwealth, that the jurisdiction being spoken about is necessarily both State and federal.
HAYNE J: Could ASIC have engaged the original jurisdiction of this Court under 75(iii) for a claim under these provisions?
MR JACKSON: Yes.
KIRBY J: I think your opponents try to draw a distinction between jurisdiction which is authority to decide and powers which is the conferral of the specific power within the jurisdiction.
MR JACKSON: Indeed, your Honour.
KIRBY J: But that is something that you have to address, as far as I am concerned.
MR JACKSON: Your Honour, that is what they seek to say. But what we are simply saying is that, assuming for the moment that the only power to make orders of this kind is to be found in section 735, or 737 or 739, then that power is exercisable because the jurisdiction that is attracted includes those powers.
GAUDRON J: One of the points that might be levelled at you in this part of your argument, or one of the questions that may arise in relation to it, how can ASIC be the Commonwealth for the purpose of purely State matters and, in a sense, you have to look to answer that, have you not, to Duncan which was a 75(v) case, Duncan being the Coal Industry Tribunal and held to be an officer of the Commonwealth, notwithstanding exercising State powers as well, and you have to look at a more recent DPP case about the prosecution of corporations offences, and you have as well in this area, have you not, the clear legislative power of the Commonwealth in relation to trading and financial corporations that have already been - - -
MR JACKSON: Your Honour, one does not need, I was going to say, in this case to look to any constitutional underpinning, as it were, because there is no doubt that the Commonwealth has power to make laws pursuant to 51(xx) or pursuant to 51(i).
GAUDRON J: And, indeed, one may say the ASIC Act is such a law.
MR JACKSON: That is what I was going to say, your Honour, that one sees section 11(7) is an exercise of at least section 51(xx) - it covers a number of other subject matters as well - an exercise of the Commonwealth's legislative power, and the way in which it does it is to say that ASIC may exercise powers in relation to subject matters, fully within power, that are given to it by State laws.
GAUDRON J: It thereby, in effect, invents a new form of section 79 of the Judiciary Act, one might say.
MR JACKSON: Yes, so that one is not talking about State law as such and, your Honour, the situation is no different from a situation which would obtain if section 737 said "the Commonwealth". Now, unless there was a provision of the Commonwealth law that picked that up, then there may be difficulties with it, but there is and the Commonwealth law is section 11(7).
GLEESON CJ: There is nothing to stop a State enacting legislation which creates the potentiality of a matter in which the Commonwealth is a party. Once that occurs, then there is original jurisdiction under section 75.
MR JACKSON: That is so, your Honour, yes.
GLEESON CJ: Just as you could, for example, have a State law of property which dealt specially with consuls or other representatives of other countries in relation to holding land.
MR JACKSON: Yes, your Honour, there are a number of possibilities and all we would seek to say about it is that this is a case where, first of all as a matter of interpretation of the State laws, they contemplate that the jurisdiction may be federal as well as State. The second thing is that the Commonwealth has legislated to enable that to take place so far as federal jurisdiction is concerned and then when one comes to actual jurisdiction, the Commonwealth has specifically conferred jurisdiction to make the orders by section 39B(1A)(a) and (c).
Your Honours, in those circumstances, if one looks at the order and the order, in our submission, is one that plainly falls within the competence of orders that might be made, at least under 737 or 739. The provisions are really in the broadest form. I took your Honours to them earlier.
McHUGH J: What you say is certainly fairly persuasive. I think you have probably persuaded me for the moment on the point but I will have to examine this argument with a degree of scepticism, I think. My instincts tell me there is some flaw in it somewhere.
MR JACKSON: Well, your Honour, I do not know what I can say to that. I think perhaps it is better to say nothing.
GUMMOW J: It is not what you can but what you will.
MR JACKSON: Your Honours, I was dealing with the question of accrued jurisdiction. What I was seeking to say was this, that the essence in the sense of accrued jurisdiction is that it allows the court to deal with things forming part of the matter arising under laws of a State. Now, as your Honour Justice Gaudron put to me, if one looks at the law arising in relation to a matter, it will be both federal and State, one assumes. The State law will be relevant. Your Honour, it is difficult to think of any other particular - - -
GUMMOW J: Let us start at the beginning. It will be either common law, which will be the common law of Australia, there may be some State statute which impinges upon it in some way. There are very few areas of the common law where there is no statutory infringement these days. Or it may be some purely State statutory regime.
MR JACKSON: Yes, your Honour, that is so. It is possible, also, that there may be laws of other State jurisdiction or, perhaps, other jurisdictions brought in by the application of rules of private international law.
GUMMOW J: Exactly, yes.
MR JACKSON: But it is the matter to be decided one way or the other.
Your Honours, that that is so appears from the passage in Stack v Coast Securities (No 9) (1984) 154 CLR 261 at page 290, in the reasons for judgment of Justices Mason, Brennan and Deane. Now, your Honours will see the first new paragraph on page 290 where they refer to:
the course of decisions......which establish that the content of a "matter" in s. 76 and that the scope of federal jurisdiction in a proceeding are not restricted to the determination of the federal claim or cause of action.....but extend beyond that to the litigious or justiciable controversy between parties of which the federal claim or cause of action forms part.
So, your Honours, that passage was, I think, the passage adopted by your Honour Justice McHugh in Re Wakim [1999] HCA 27; (1999) 73 ALJR 839, paragraph [71] at page 856. Your Honour said in the third line on the left column on page 856:
If the substratum of fact which gives rise to a matter in federal jurisdiction cannot be effectively disposed of without the application of State law, the issues of State law are determined in the exercise of federal jurisdiction.
Your Honour referred, in footnote 92, to the three leading cases on the area, and then your Honour referred to the passage from Stack v Coast Securities, and after that passage said:
The determination of State law issues in such circumstances is part of the "accrued jurisdiction"..... Federal courts do not need the States, with or without the consent.....of the Commonwealth, to confer jurisdiction upon them before they can determine issues arising under their accrued jurisdiction.
Now, your Honours, that last sentence is one which seems to directly contradict, in our submission, the approach taken by the Full Court in this case. Could I refer also, your Honours, to paragraph [135] at page 868, in the right column, your Honours Justices Gummow and Hayne, where your Honours said that it is:
established that the jurisdiction of a federal court having jurisdiction in a matter arising under a law made by the Parliament is not "restricted to the determination of the federal claim or cause of action.....but extend[s] beyond that -
and your Honours quoted from Stack v Coast Securities and then your Honours went on again to describe that.
Now, your Honours referred in that case to Fencott v Muller 152 CLR 570, but if I could just take your Honours to that case for a moment At the bottom of page 606, your Honours will see four members of the Court saying:
The proposition that a matter may include a cause of action arising under a non-federal law, though denied in the dissenting judgments, is the ratio decidendi of Phillip Morris. It follows that the ambit of a matter arising under a federal law may extend beyond claims which arise under that law or which are to be determined by reference to that law alone.
And then, your Honours will see in the next paragraph a reference to Felton v Mulligan and in particular to pages 392 and 399 of that decision. At page 399 there is a passage from Justice Walsh which we have extracted in our written submissions, paragraph 52, at the top of page 16 of our written submissions, where his Honour had said:
The foundation for the authority of this Court to deal with the "cause" is that it involves the interpretation of the Constitution. Once it is clothed with that authority, this Court may do whatever is necessary for the complete adjudication of the cause and therefore it may exercise any relevant power which the Supreme Court would have had, whatever may be the source of that power.
Your Honours, the essence of accrued jurisdiction is really, in a sense, just that; it allows the determination of the whole matter and it involves the application of the laws of the States.
GUMMOW J: One of the things that is said against you, Mr Jackson, is that one can have a situation where there is an action tried in the Supreme Court of a State; it is diversity jurisdiction so it is federal jurisdiction; that the whole of the controversy includes issues or claims arising under a specific State statutory regime, which reposes jurisdiction exclusively in the District Court and that somehow, if your propositions are accepted, that means the Supreme Court is doing what the New South Wales Parliament says only the District Court can do. New South Wales complains about this, I think. So that there is some disruption of the State system in some way.
MR JACKSON: Well, your Honour, I suppose there are two things about that: the first is that the State system, of course, is always subject, whether it be by the operation of covering clause 5 or section 109, as the case may be, to the operation of the Constitution or laws made by the Parliament pursuant to it. So, your Honours, that is in a sense a given with which the legislatures of the nation have to live.
The second thing about it, your Honours, is that, if the situation which emerges is that it seems apparent that the remedy that is contemplated is one that is only capable of being given by particular courts and, your Honours, that really would not terribly often be the case, in our submission, where one is speaking about - I was going to say ordinary, but perhaps familiar jurisdictions - if the situation however is that it should be treated as only capable of being given by particular courts, then one would look to what the Court said in Abebe and recognise that the existence of the inability to grant relief in respect of the whole of the matter would tend to indicate that there were two matters. That would be particularly so, your Honours, in circumstances where the forms of relief that can be given by one court are of a particular kind. Your Honours, let us say that the jurisdiction of a State court is limited to making orders which are 1, 2 or 3 or nothing at all, that would tend to indicate, your Honour, that although there may be a substratum of fact which is basically similar, the identification of the matter would be different from that which was being dealt with by the Federal Court.
One can look at it from two points of view, from the federal end or from the State end. If one looks at it from the federal end, the issue is one which must vary depending on what the matter is because, of course, under section 75 or 76 the matter can arise in a significant variety of ways.
GLEESON CJ: What happens if the Commonwealth becomes a party to a dispute of a kind which requires resolution by the Land and Environment Court and the form of procedure prescribed involves a judge sitting with two assessors, or something like that?
MR JACKSON: I am sorry, your Honour?
GLEESON CJ: You have a matter to which the Commonwealth is a party but the State statutory provision governing the resolution of that dispute appears inconsistent with its resolution by the Federal Court.
MR JACKSON: The situation to which your Honour adverts may create a difficulty because if one treats the jurisdiction then as being federal because of the presence of the Commonwealth as a party, then the question which would arise would be - and the answer would be "Yes" of course - "Is the State court exercising federal jurisdiction?" The answer would be "Yes". "Is it exercising invested federal jurisdiction?" Again, the answer would be "Yes". I do not know beyond that what particular difficulty would arise.
McHUGH J: But if it was in the Federal Court in that situation, you would have no assessors.
MR JACKSON: Well, of course, no, your Honour.
HAYNE J: That may invite close attention to what in truth is the controversy. What is the matter? Is the matter one in which the dispute being litigated is, for example, the value of black acre as determined by assessment according to this process? Is the matter a broader defined dispute, a dispute being the true market value of black acre regardless of its manner of determination?
MR JACKSON: Yes, your Honour. That is why the question of limitations on the availability of relief or a specificity as to forms of relief can itself be germane to the determination of what is the matter.
KIRBY J: That lays emphasis upon the difference between jurisdiction, which is authority to decide, and power, which is the power in the specific circumstance to do something with your jurisdiction.
MR JACKSON: I do not doubt the existence of the difference but sometimes power and jurisdiction are relevantly the same, particularly if one takes statutory tribunals of various kinds. The jurisdiction is to grant this relief or that relief. That is when, of course, one starts to get to the question of what is being done is judicial or administrative, really, but I accept the existence of the distinction, it is a - - -
McHUGH J: Supposing the remedy in the Supreme Court was by way of an action for damages in front of a jury, it had to be by jury. Now, the Federal Court has a discretionary power to use juries but it never does, I do not think. You would just simply say you would just ignore the requirement there to be an action heard by a jury if the issue was determined in the Federal Court?
MR JACKSON: Yes, your Honour.
HAYNE J: But that could only be by the way in which section 79 has been dealt with, would it not?
MR JACKSON: It would be, your Honour, but if one is speaking about - could I just say two things, I suppose: all one is speaking about in saying sitting with a jury, and I do not mean to diminish the value of juries in saying this, but one is speaking about what is the composition of the court for a particular class of case. What is the Supreme Court? The Supreme Court would be exercising either State jurisdiction or invested federal jurisdiction. The choice of giving federal jurisdiction to a State or a federal court, or both, is for the Parliament, of course. But one of the things that follows from giving the jurisdiction to a Federal Court, is that it has jurisdiction to dispose of the whole of the matter. But, your Honour, when one looks at it that way, it is a matter for the Parliament and the Federal Court then to exercise that jurisdiction. It may be that in appropriate cases the proper, but not the absolutely required thing, would be for the Federal Court to sit with a jury. But that would be a matter for that Court in the exercise of its jurisdiction.
I was going to take your Honours back to the approach taken by the Full Court in this case. If I could take your Honours to paragraph - - -
McHUGH J: Just before you do, and I am sorry to go back, but, in a sense, your argument about the Federal Court having jurisdiction under sections 737 and 739, does not really depend, does it, on the fact that the Victorian Parliament has authorised the Commission to bring that action, does it?
MR JACKSON: It does, I suppose - - -
McHUGH J: Even if the Victorian Parliament had not conferred that right, would you maintain that in those circumstances the Federal Court had jurisdiction?
MR JACKSON: I could start by saying that so far as the Commonwealth is concerned, there would be no doubt, in our submission, that the Parliament could choose to enact, as it were, a limited form of Companies Law, within section 51(xx), which empowered a Commonwealth body, or a Commonwealth officer, or the Commonwealth as an eo nomine to be a body to enforce companies laws of various jurisdictions of Australia, not themselves laws of the Commonwealth - perfectly within power, of course.
Then, what has happened in the particular case is that one sees that the legislation is somewhat differently framed in the sense that it does not do that directly, what is says - - -
McHUGH J: This is section 11(7) you are talking about?
MR JACKSON: Yes. It does not do that directly, what it says is that where the State says this may be done, the Commonwealth says the Commonwealth may do it. That is where one then picks up the provisions of section 39B(1A).
GLEESON CJ: If a consul in Sydney got into a dispute with the local council about the use that the consul could make of the land on which the consulate is erected, and there was then an appeal or a dispute which was capable of being resolved under the provisions of the relevant legislation by the Land and Environment Court, which could review or overrule the decision of the local council in relation to the use of the land, is that a matter in which this Court has original jurisdiction?
MR JACKSON: Your Honour, may I say two things. It falls directly within, subject to the second matter, section 75(ii). One would think a matter:
affecting consuls or other representatives of other countries.
The qualification to that, however, is that one would need to examine what was being sought, because the nature of the controversy might not be a matter. What might be being sought, for example, would be something that would be regarded as not justiciable by courts strictu sensu, but rather the grant of a privilege for the future in the sense of an administrative grant, your Honour. So that is the kind of distinction I am suggesting; otherwise, yes, your Honour.
HAYNE J: On your submission, Mr Jackson, would the Attorney-General for the Commonwealth have standing to institute proceedings for declaration of contravention of section 615 of the Corporations Law of Victoria?
MR JACKSON: The answer, your Honour, is probably yes. The reason why I say that is that if one treats sections 737 and 739 as being provisions which are granting rights to the Commonwealth, when it says the Commission, then it may be that the Attorney-General, in exercising rights given to the Commonwealth, would have a standing to seek those.
HAYNE J: But parasitic upon 737 and 739 giving rights to the Commission?
MR JACKSON: Yes.
HAYNE J: That is, does it follow that your submission is that there has to be the reference to the Commission in 737 to give it standing to complain of a breach of the Corporations Law of Victoria in this particular respect?
MR JACKSON: If one treats that as a freestanding claim, your Honour?
HAYNE J: Yes.
MR JACKSON: Yes, that is so. Your Honour, I say if one treats that as a freestanding claim, because of course it was not, and the point I was seeking to make about it was that if one took the really narrowest view of the case and forgot about accrued jurisdiction altogether, this was a case where there was original jurisdiction directly conferred.
I was going to take your Honours to the approach taken by the Full Court. That appears at page 191 in volume 1. Your Honours will see in paragraph 24 their Honours say:
S58AA the definition of "court" and "Court" refers not merely to "the Federal Court" but to the Federal Court "when exercising the jurisdiction of this jurisdiction." So the real question, in our opinion, is not whether the reference to the Federal Court in s58AA is invalid as such, but whether, when this Court is seised of a "matter" by force of the accrued jurisdiction conferred upon it by the Parliament of the Commonwealth, this Court then exercises the jurisdiction of the State in which the relevant corporation is incorporated.
Now, their Honours then refer in paragraph 25 at the bottom of page 191 to the fact that the Federal Court is exercising federal jurisdiction and to the fact that, halfway through that passage, that:
Federal courts do not need the States.....to confer jurisdiction upon them before they can determine issues arising under their accrued jurisdiction.
Then their Honours say that they adopt the last two sentences of that page, saying that:
the jurisdiction which the legislation in the present proceedings purports to confer upon the federal courts is not accrued federal jurisdiction. It is an attempt to confer State jurisdiction in respect of controversies that fall outside the realm of federal jurisdiction."
Your Honour was there referring to the cross-vesting legislation. Their Honours then say at the top of page 192:
The last two sentences of this passage are an apt description of the present case. Section 58AA.....purports to confer on this Court the jurisdiction of the State of Victoria.
Your Honours will see they say when read with the substantive provisions to which it attaches, including sections 737 and 739. Well, Your Honours, if it be the situation that the jurisdiction is said to be the jurisdiction of the State of Victoria, then the fact that the provisions say that there is a jurisdiction of Victoria does not mean that the jurisdiction that is exercised as accrued jurisdiction is other than federal jurisdiction. Your Honours, it is very difficult, with respect, to see precisely the point that is sought to be made by the court - - -
KIRBY J: I am not sure about that because you will see that there is a significant change of language. They move from talking of jurisdiction to "It empowers"; they are then talking about power. I may be wrong but what I understand their Honours to be saying is that whatever the position relating to jurisdiction, in respect of the power, the powers conferred by sections 737 and 739 are in terms powers conferred only on the Federal Court exercising jurisdiction in this State. It is a sort of expressio unius approach that therefore it is not a power conferred on the Federal Court in a larger sense and therefore the only power that is engaged is the power which 737 and 739 confer which is limited to the Federal Court in its purported exercise of State jurisdiction which cannot be done following Wakim.
MR JACKSON: Well, your Honour, if the situation is that the consequence of Wakim is that one excises the Federal Court from the equation, as it were, in the Corporations Law, then the case is one where there is no reference to the Federal Court. There simply is a case of jurisdiction conferred on State courts exercising State jurisdiction, and that is the very thing that accrued jurisdiction picks up.
McHUGH J: Yes. That is what I have difficulty in understanding, as I said to you earlier, in the argument. Even if you strike paragraph (a) out of the definition as part of the accrued jurisdiction, it would be exercising federal jurisdiction even though it is a non-federal matter.
MR JACKSON: Your Honour, it is a paradigm case.
McHUGH J: Yes.
MR JACKSON: Any difficulty is gone because the result - - -
GLEESON CJ: Subject to the possible qualification that if you were able to construe the law in such a way as to deny the possibility of it being applied in federal jurisdiction it might not be able to be picked up, but that would be a particular construction that would be needed then.
MR JACKSON: Well, your Honour, the difficulty in doing that is that, if one excises, for example, the Federal Court from the situation under the Corporations Law, one is still left with the situation that the terms of section 737 and 739 refer to the Commission.
McHUGH J: No one disputes that you could bring this action in the Supreme Court of Victoria..... Originally?
MR JACKSON: Well, your Honour, the difficulty with that is that the Supreme Court of Victoria, on this theory, the Supreme Court of Victoria would be exercising the jurisdiction of Victoria, but the problem would be that if ASIC is the Commonwealth, the jurisdiction would be federal, the jurisdiction then would not be the jurisdiction of this jurisdiction.
McHUGH J: Yes.
GLEESON CJ: And is not one of those provisions exclusive?
MR JACKSON: The provision your Honour is referring to is in the ASIC Act, yes; your Honour, that is a provision not directly related to the Corporations Law.
GUMMOW J: Section 12GJ.
MR JACKSON: So that, your Honour, what I was seeking to make was that the notion that, in some way, the Victorian Parliament was seeking to exclude federal jurisdiction or should be treated as doing so, is difficult to maintain in the light of the fact that, on any view, one of the persons referred to in both section 737 and 739, as having the ability to apply, is the Commission - - -
McHUGH J: But does that mean this cannot be a case of accrued jurisdiction at all; it is really a case of original jurisdiction?
MR JACKSON: Your Honour, that is our first submission. I mean, there is no doubt, if I could put it this way, that the case is one of original jurisdiction. No one debates that there was original jurisdiction attracted by the claims under the ASIC Act and the Trade Practices Act, in the first place.
McHUGH J: But the point you just made was that if this had been started by your client in the Supreme Court of Victoria, it would be an exercise of federal jurisdiction. So that the common substratum of fact, so to speak, would involve federal jurisdiction in Victoria.
MR JACKSON: Your Honour, there are really two things, in a sense: one is a question of interpretation of the Victorian law and one sees in the Victorian law a reference to the ability of the Commission to institute proceedings. Now, your Honours, leaving aside for a moment the question of the efficacy of such a provision, absent a Commonwealth law, what it does show, as a matter of interpretation of the Victorian law, is that the Victorian law is not to be treated as speaking only of State jurisdiction, when it uses the expression "the jurisdiction of this jurisdiction", because the concepts to which reference is made involve ones that are inherently federal as well as State. So there is not any exclusion. Your Honours, that is fundamentally why, or one of the reasons why the Court's decision in Smith v Smith is not germane to the present case. So, your Honour, that is the first thing. As a matter of interpretation of the State law, it is not intended to speak only of State jurisdiction.
McHUGH J: I think I should withdraw the comment I said about it not being an accrued jurisdiction because the truth is that an accrued jurisdiction is never State jurisdiction. Accrued jurisdiction is always federal jurisdiction where the criterion of rights and duties is State law, but it is federal jurisdiction. So it is not the Federal Court is exercising State jurisdiction, it is exercising federal jurisdiction, but with a different source for the criteria, rights and duties.
MR JACKSON: Yes. Now, your Honour, one does have a situation in the present case where, if one takes the Corporations Law of Victoria, as it stands, in addition to the provisions of section 737 and 739 referring to the Commission and, thus, recognising the existence of federal jurisdiction. One also has the provision of section 58AA itself. If one takes section 58AA itself, in speaking of courts, your Honours, one sees that - - -
KIRBY J: It must have meant something, I mean, the addition of that phrase "when exercising the jurisdiction of this jurisdiction". It could have been omitted. On your theory, you could have just said "any of the following courts".
HAYNE J: One reason it may not have is because of the cross-vesting State to State, and that is that State one may not have wished to cross-vest to State two with jurisdiction, and may not have been able to; jurisdiction other than under its own Corporations Law.
KIRBY J: That runs against your argument though, does it not, because it emphasises that it is State jurisdiction only, and it is to be read and explained in the context in which this was enacted which was on the assumption that the cross-vesting legislation was valid.
MR JACKSON: Well, your Honour, I do not dispute that proposition at all but it is a question of what the consequences - your Honour, the jurisdiction, State to federal, was not the only operation of the cross-vesting laws. As your Honour Justice Hayne has observed, there was the cross-vesting State to State but, as well, the jurisdiction of various courts is not limited - I am sorry, your Honour, I will start again.
The position is not that all of section 58AA, all its operations, have been struck out because the decision of the Court in Re Wakim does not touch at all, in our submission, the propositions we have been advancing about the interpretation of sections 737 and 739 in relation to the conferral of federal jurisdiction - I am sorry, your Honour, recognition of the potential existence of federal jurisdiction, nor does the fact that there is a definition of "court" or "Court", saying "when exercising the jurisdiction of this jurisdiction", affect the matter because, your Honour, there is no reason, in our submission, why that expression, "when exercising the jurisdiction of this jurisdiction", does not refer to, as everyone would seem to say, the jurisdiction of Victoria. But to say that, poses, rather than answers the question, in a sense, because what is meant by the term is to be derived from looking at other provisions of the Act and, your Honours, the "court", of course, is only a definition that goes into section 737.
KIRBY J: Yes, but we cannot ignore the fact that it was drafted in this way because this was a template and the template did not have "the jurisdiction of Victoria" because the template was - it was used in every State - "the jurisdiction of this jurisdiction" It is a frequently used phrase. It was designed to be the common formula that would not need fiddling in each particular State, so, I think you have got - you cannot excise that phrase entirely and I think it is meant to be "when exercising", in the Corporations Law of Victoria, "the jurisdiction of Victoria".
GAUDRON J: But perhaps that is not the question, is it, in a sense? Perhaps the question is whether by inserting those words in the definition the Acts operate in such a way as to prevent section 79 from picking them up and your answer to that is to say, "Well, they cannot have intended that because of the way the Commission is given powers".
MR JACKSON: We do say that. Could I just say one further thing in response to your Honour Justice Kirby: one sees in section 58AA(1) that it opens with the words "Subject to subsection (3)". Then it goes on to say - I will come to subsection (3) in a moment, your Honours, but the first thing it does is to define "court":
court means any court when exercising the jurisdiction of -
let us assume Victoria. Then "Court" says:
Court means any of the following courts when exercising the jurisdiction of -
"Victoria". Your Honours, what saying "of Victoria" means is a different question. One then sees subsection (3). Your Honours will see that subsection (3) says:
The jurisdiction that courts have in relation to matters under this Law is dealt with in Part 9 of each of the following.
It then refers to Part 9 of the various Corporations Acts around the Commonwealth and is speaking of the jurisdiction that courts, other than the courts in the sense referred to, when exercising jurisdiction referred to in the Victorian Corporations Law may exercise.
The point I would seek to make about that your Honours is simply this, that what you have is, in section 737, when one takes the definition of "court" into section 737 and into section 739, there is nothing, in our submission, to take away from the notion that the expression - if I could just read section 737(1) in that regard:
Where a person has acquired shares in a company in contravention of section 615, the -
Federal Court of Australia -
on the application of the-
ASIC may do the various things. Your Honours, one is speaking there about something that will be federal jurisdiction. No doubt, the State cannot, by itself, confer the jurisdiction, but the Commonwealth laws provide for the jurisdiction to be exercised.
McHUGH J: What is the function of section 58AA(3)? What does it actually do?
MR JACKSON: What it is saying is that if one goes to those provisions of the Corporations Acts of the various States, one sees set out in them the jurisdiction that those courts have in relation to matters under the Victorian law. Your Honour, I think it is dealt with - - -
GUMMOW J: This statute is full of these sort of explanatory statements.
McHUGH J: Exactly. It can only be explanatory, can it?
GUMMOW J: They are not enacting statements.
MR JACKSON: Yes, that is so, your Honour. It is dealt with, I think, in the Commonwealth submissions - and if I can give your Honour a reference in just a moment to that. If I could return for a moment to accrued jurisdiction, the point I would seek to make is that if one is speaking of accrued jurisdiction and where that jurisdiction is jurisdiction of a State, the underlying hypothesis of course is that the jurisdiction otherwise would be State jurisdiction and, your Honours, whether stated expressly or not by the State legislation, one would expect that jurisdiction to be jurisdiction which was exercisable in the ordinary course of events by the courts of that State. They may or may not state it, but it would be the normal thing.
But, your Honours, in circumstances like that it is not surprising that as is the case, for example, in relation to the other provisions of the Judiciary Act, the State provision is picked up but without the reference to the particular courts.
Could I refer to what your Honours Chief Justice Gleeson and Justices Gummow and Hayne said about this in Austral Pacific v Airservices [2000] HCA 39 at paragraph 13. Your Honours said:
The closing words of s 79 -
which are quoted immediately above -
indicate, as the authorities confirm, that the section does not enable a court exercising federal jurisdiction to give an altered meaning to a State statute which it is required to apply. The qualification expressed in those authorities, but inapplicable in this litigation, is that a State statute may be "picked up" in a federal court even though in its own terms the State statute is limited in its operation to the courts of the State in question. Here, of course, the federal jurisdiction was being exercised by a State court not a federal court.
Your Honours, the same position, in our submission, would obtain in relation to accrued jurisdiction.
I said I would give your Honour Justice McHugh a reference to where the provisions of section 93 were discussed. They are in the Commonwealth's submissions, paragraphs 3.9 to 3.21, pages 8 to 13. I am sorry, 58AA(3). I think I have said 93 - 58AA(3).
McHUGH J: You did, yes.
MR JACKSON: Section 58AA(3). Now, your Honours, the Full Court, as your Honours will see from paragraph 26 of the Full Court's reasons in volume 1 at page 192, relied on the decision of this Court in Smith v Smith [1986] HCA 36; (1986) 161 CLR 217. Your Honours, we have referred to this in paragraph 53 of our written submissions, page 16, but the first thing we would seek to say is that - your Honours will see the references at footnote 70 of our written submissions - the view taken by the members of the Court was that there were two controversies. Your Honours will see that, one under the State Act involving other persons, and a separate one under the Family Law Act. Your Honours will see that at page 237 about point 5.
GUMMOW J: If I can just distract you for a minute, perhaps the nub of it, in a way, is in Justice Gaudron's successful submission at page 220 under the heading "Accrued jurisdiction". Her Honour said:
An application for approval under that Act is not a justiciable controversy but a condition precedent to a binding contract -
et cetera.
MR JACKSON: That is so. If only the members of the Court had put it so briefly, with respect. I will come back to those references in a moment. The particular point I wanted to make about it was that one of the reasons - and this elaborates on what your Honour Justice Gummow just said - one of the reasons adopted by the Court was that there was a clear indication - was that the question was - the resolution of the question was in part a matter to be determined by consideration of the terms of the State statute. Your Honours will see that at page 236.
If your Honours look at the new paragraph on that page your Honours will see a reference to the fact that there are two separate matters falling for determination, first, whether the maintenance agreement should be approved, secondly, whether the Family Court acting for the purpose of section 31 could and should approve the release. Then their Honours refer to the fact that they are committed by federal and State laws respectively to the decision of two different tribunals. That is one thing. The second thing is at page 251. In the middle paragraph on the page their Honours construe the State Act and say, about two-thirds of the way through:
It is quite impossible to read the reference to "Court" in s 31, viewed in the light of the definition of "Court" in s 6(1), otherwise than as a reference to the Supreme Court.
The point we would seek to make, your Honours, is that the Full Court relied on what was said in Smith v Smith. Smith v Smith, construing the State statute, said the only court that is referred to as a matter of construction of the State court and the only court which has power to deal with the particular thing in question is the Supreme Court. Yet, your Honours, where one has in the State statute here the clearest recognition that the power is one which could be exercised by a Federal Court, the Full Court, without saying that the Federal Court provision is to be removed from the State statute, yet says that Smith v Smith is applicable. Your Honours exactly the opposite conclusion, in our submission, would result in the operation of Smith v Smith.
GLEESON CJ: Is that a convenient time?
MR JACKSON: Yes, your Honour.
GLEESON CJ: We will adjourn until 2.15 pm.
AT 12.46 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.25 PM:
GLEESON CJ: Yes, Mr Jackson.
MR JACKSON: Thank you, your Honours. There are a number of matters I wish to deal with in order to conclude the submissions we wish to make. May I commence by referring to something your Honour Justice Kirby mentioned before lunch? Your Honour spoke of questions of jurisdiction and power. Could I say two things about that? The first is that, in this case, what the Full Court held was no jurisdiction, and your Honour will see that in volume 2 at page 269 where the declarations made by the Full Court were, first, that order 7 was "invalid for want of jurisdiction" and, secondly, paragraph 2:
The Federal Court of Australia had no jurisdiction to hear and determine the proceedings brought -
to put it shortly -
under the Corporations Law.
KIRBY J: Yes, that I noticed during the lunch hour, but if that was simply a slip, and means no power, then that would merely be a matter of correcting the order.
MR JACKSON: However, your Honour, that seems not to be the case if one looks at what the Full Court said, for example, at page 267, at the bottom, one sees in - - -
KIRBY J: There is often a loose use of the word "jurisdiction" to mean power. I am not saying that they did not mean jurisdiction when they used jurisdiction. It is true that sometimes it is used. You point to the record, and you are entitled to do that, and you make a good point.
MR JACKSON: Your Honour, we rely on the record and if one looks at the reasons of the Full Court we would submit that they are talking about jurisdiction.
KIRBY J: They do slip at the critical moment into empower. It is a question of what they were really talking about.
MR JACKSON: Your Honour, empower is a phrase that is perfectly apt to describe jurisdiction, of course, as well. Your Honours, could I refer perhaps to page 265 paragraph 8 where they said:
it was the fact that the Federal Court could not exercise the jurisdiction of Victoria which led -
speaking of their earlier decision -
to the conclusion that the order for payment was beyond power.
So your Honours will see the underlying reason.
It is clear that, when the order was made, the learned judge at first instance was purporting to exercise the jurisdiction of Victoria that was believed to have been validly conferred.....In our view, these circumstances lead to the conclusion -
et cetera.
Your Honours, the second thing concerning the question of power is that the - I have taken your Honours to sections 737 and 739 but each of those contains a grant of power in the widest terms and, your Honours, without dwelling on the point, such a grant should not be treated as narrowed unless there are considerations in the empowering statute suggesting a reason for the adoption of that course.
Could I turn then to the question of jurisdiction a little more generally. Your Honours, on any view these were matters in which the Federal Court had jurisdiction. In that Court, the Commonwealth was a party and by section 64 of the Judiciary Act, the rights were to be those as in a suit between subject and subject, and the laws of Victoria were binding pursuant to section 79.
If I could just go to the Federal Court of Australia Act and, in particular, to sections 22 and 23. By section 22:
The Court shall, in every matter before the Court, grant, either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him or her in the matter -
in order to - and your Honour's familiar words then appear - to determine:
as far as possible, all matters in controversy between the parties.....finally -
and to avoid -
all multiplicity of proceedings.
And, your Honours, of course, section 23:
The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds.....as the Court thinks appropriate.
Now, your Honours, the powers conferred by those provisions in relation to matters in which the Court had jurisdiction, together with the application of sections 64 and 79, are broad. Could I in that regard refer your Honours to - perhaps I could just give the references without going to the paragraphs fully - Patrick Stevedores [1998] HCA 30; (1998) 195 CLR 1 at page 29 paragraph 27 and Cardile v LED Builders Pty Limited [1999] HCA 18; (1999) 73 ALJR 657 at page 670, particularly at paragraph 56.
Your Honours, in our written submissions in paragraphs 61 to 67 we set out various bases on which the Federal Court had power to make particular orders.
If I could turn to another matter, your Honours. Justice Gaudron, this morning, referred to the line of cases dealing with bodies that have co-operative bodies, in effect. Could I refer in that regard to what was said by the Court in Re Cram; Ex parte NSW Colliery Proprietors' Association Ltd [1987] HCA 28; (1987) 163 CLR 117 and in particular at page 128. The body in question there was a body established pursuant to Commonwealth and State legislation.
McHUGH J: What are you citing this for, Mr Jackson?
MR JACKSON: Yes, what I was going to say about it was two things. The first was to indicate that it was, in effect, a Commonwealth body, or the persons were officers of the Commonwealth, notwithstanding the fact that there was a Commonwealth element in it. The second was to draw to the Court's attention the absence of a provision in the ASIC Act similar to that which was adverted to in the middle of the long paragraph on page 128. Your Honours will see the paragraph commences:
Given then that the authorities derive their existence from the Commonwealth Act, although not exclusively so, and that the Commonwealth Act either confers or authorizes the conferral on the authorities of all or any of their powers and functions, the persons constituting the authorities are necessarily officers of the Commonwealth and remain so in respect of the exercise of all their powers unless, perhaps, the Commonwealth Act evinces an intention that in the exercise of powers derived from the State Act the authorities function in some different capacity.
Their Honours then referred to a provision that had been in the National Companies and Securities Commission Act that bifurcated on a Commonwealth/State basis, in effect, some of the exercises of powers or performances of functions of that body. There is no such provision in the ASIC Act 1990 .
Could I just say one other thing concerning the position which would obtain if the submissions made on behalf of the other sides are correct if the approach taken by the Full Court is correct. If that is so, the Deputy Commissioner of Taxation, whom one might regard as clearly the Commonwealth, is not able to apply under the Victorian Act to wind up companies. That is so because the jurisdiction being exercised is federal, the Deputy Commissioner being the Commonwealth relevantly, and because federal jurisdiction would be attracted. The result would be, if the Full Court is right, that the winding up orders could not be made.
There are two further things I would seek to mention. One is - - -
KIRBY J: Is that an argument of convenience, is it?
MR JACKSON: Yes, it is, your Honour. It is an argument of convenience, an argument that would seek to demonstrate the unlikelihood, with respect, of the approach taken by the Full Court.
KIRBY J: I will not be tempted to say anything. Convenience does not rule.
MR JACKSON: No, no, your Honour, but sometimes it is a matter to be taken into account. I use it as one example. But what it does demonstrate, in our submission, is that the view adopted by the Full Court of the meaning of section 58AA is probably not the better one.
GAUDRON J: On one view, 58AA might be read to be defining "court" only when the court was exercising State jurisdiction; not limiting it to courts exercising jurisdiction, if you follow the distinction I make.
MR JACKSON: Yes.
GAUDRON J: That the Act says nothing whatsoever to what is a "court" when exercising federal jurisdiction, or its own jurisdiction.
HAYNE J: The question of jurisdiction being dealt with primarily, perhaps wholly, but primarily by Division 9 of the Corporations (Victoria) Act, these provisions being explanatory and perhaps definitional, that is all.
MR JACKSON: Yes, your Honour. What one sees from the comparison of "court" and "Court" is that all that seems to really being done between the two is to say, to put it shortly, that sometimes a superior court should exercise the jurisdiction, other courts who cannot - and no more.
Your Honours, could I say two things. The first concerns the orders sought. In our written submissions, your Honours, we have left out, I think -I really do not know why, apart from inadvertence, a claim for mandamus, but - - -
GLEESON CJ: In paragraphs 69 and 70 of your written submissions you deal with this matter, as I understand it.
MR JACKSON: Yes, your Honour, that is the last page. What we would seek to say, your Honours, is we have, in our notice of motion for the prerogative relief, we have sought mandamus. That is at volume 2, page 345, and we would seek mandamus as well as certiorari.
GUMMOW J: Do you have all of these remedies? In the first place, if special leave - the order sought there on paragraph 68, the first order would be special leave granted. What then would be the judgment, decree, order or sentence that is being set aside? What is 1 and 2 of these - interlocutory declarations, are they?
MR JACKSON: Well, your Honour, yes - - -
GUMMOW J: I am wondering if the only order they made was not to proceed any further, to standover the appeal.
MR JACKSON: Well, your Honour, that - - -
GUMMOW J: I have no completed view at all, but I am just puzzled.
MR JACKSON: Your Honour, it is a curious thing, I would accept. But without taking time, I am conscious of the fact there are two views on the matter. The orders that are made, and I use the term "orders" in the sense of inverted commas, that are 1 and 2, are declarations and if one looks at the terms of section 73, then we would submit they fall within the terms of judgment, decree or order. Your Honour, in that regard, if one took a decision of the Full Court saying a judge below had no jurisdiction to entertain the matter and - - -
GAUDRON J: Then what they should do is go on and make orders accordingly, should they not?
MR JACKSON: Your Honour, that takes one into our prerogative relief.
GLEESON CJ: They have not set aside the orders made by Justice Merkel.
MR JACKSON: No, not in form, no. So that, your Honour - - -
GUMMOW J: Is it not a one or the other situation? I mean, if you are right about the appeal structure, we will follow that. If you are not right about that, we follow the prerogative relief structure, but you cannot have both.
MR JACKSON: Yes, your Honour, I understand that. One cannot have both. The one we would seek is the one that the majority of your Honours think is the more appropriate.
GAUDRON J: If one thought the more appropriate was prerogative relief, one would dismiss your application for special leave as unnecessary and if one thought the appeal structure was more appropriate, one would decline to grant relief as unnecessary.
MR JACKSON: Yes. Your Honour, I would not encourage your Honours to declare there was no jurisdiction in respect of - - -
McHUGH J: What do you say about what I regard as a rather strange submission of the Commonwealth, which it says that it is wrong, it is unprincipled, in effect, to talk about the Federal Court exercising jurisdiction when it determines it has no jurisdiction? It says, "The exercise is one of implied judicial power". If that submission was right, what would it say as to the power of this Court to issue 75(v) writs as a matter of power rather than jurisdiction? I think it is at paragraph 4.4 and 4.11.
MR JACKSON: I am sorry, your Honour - - -
McHUGH J: In the Commonwealth's submissions.
MR JACKSON: Yes, your Honour, I am sorry; 4.14, your Honour.
McHUGH J: Paragraph 4.14, is it? Judicial power is concerned with adjudicating upon disputes as to rights, duties and liabilities arising from the operation of law and past events and it is quite a different concept from jurisdiction which is an authority to decide in respect of particular matters, but the Commonwealth asserts as a principal analysis it is a question of judicial power.
MR JACKSON: Well, your Honour, it must depend, in a sense, on the context in which one is speaking and I suppose what is being said, your Honour, if I may say with respect, is not something we are seeking to advance and I would prefer, if I may say so with respect, the proposition to be one supported by my learned friend the Solicitor for the Commonwealth but, your Honour, I do not know, with respect, that it matters so far as for present purposes.
McHUGH J: I just do not know where it leads, what is at the back of it. If it is a question of power as opposed to jurisdiction, does it mean that 75(v) writs do not go?
MR JACKSON: Your Honour, I must say I find it a little hard to see why that would be so.
McHUGH J: These writs - prohibition goes to jurisdiction, does it not?
MR JACKSON: Your Honour, yes, it goes - a court is acting outside jurisdiction.
McHUGH J: A wrongful exercise of power would not attract prohibition.
MR JACKSON: Your Honour, prohibition, which does not arise directly, I do not think, in the present case, but prohibition undoubtedly goes to prohibit someone acting outside jurisdiction and, your Honour, jurisdiction, of course, in the sense that sometimes really relates to the power because if one looked at the various classes of cases in which prohibition has been granted in an Australian constitutional context by the Court, sometimes it is prohibition in relation to the exercise of particular powers because the court or body has no power so to act.
McHUGH J: Yes.
MR JACKSON: Now, your Honour, one can call that power in one sense. One can call it jurisdiction in another but, your Honour, I do not know, with respect, that the broad distinction or the exact distinction between jurisdiction and power is one that would apply in the fullest sense to prohibition in the way your Honour is putting it to me.
McHUGH J: Well, a jurisdiction is authority to decide, and usually power is concerned with what you do in the exercise of that authority.
MR JACKSON: Your Honour, if one took, for example, a Commonwealth industrial body, one could say that in respect of some matters, those matters were not within that body's jurisdiction. For example, the subject matter might be removed from it.
Equally, one might say that if it be assumed that the industrial body's powers were limited to making orders as between employers and employees, then an order that was made that affected some third party was an order that perhaps was made within jurisdiction but not within particular powers that could be exercised within that jurisdiction. There would not be any reason, in our submission, why prohibition in such a case - prohibition would not go in the second as well as in the first case.
Now, your Honour, that is why it becomes difficult, we would submit, to say that prohibition and jurisdiction are cognate things, that prohibition goes to more than that, your Honour, but equally - - -
McHUGH J: Anyway, I will take over the Commonwealth from there.
MR JACKSON: Your Honour, could I just say that I do not want to get into a lengthy discussion having said I would not about it, but the same would apply to mandamus, of course.
McHUGH J: Well, of course.
MR JACKSON: With mandamus, your Honour, a very common use of mandamus is to compel the exercise of power. Your Honours, I have not, of course, dealt with all the matters in our written submissions, but we would rely on those as well.
GLEESON CJ: Thank you, Mr Jackson. Yes, Mr Hayes.
MR HAYES: Your Honours, in the hope that this assists, we have prepared a table setting out the competing positions taken by the multitude of parties here, so who is advocating what in relation to the various matters. We handed this out to the parties this morning.
GLEESON CJ: Some of the arguments covered by the interveners are arguments that we have heard from them in other cases in the past and we do not expect them to be repeated.
MR HAYES: I think they are all here, your Honour. A number of them actually support us on various points and others obviously do not. The next matter I wish to address the Court on is that we, in a sense, join with ASIC in seeking prerogative relief. I think each of the major parties, Yandal, Normandy, Edensor and ASIC wants the Full Federal Court to decide the matter. We differ on some of the appropriate principles, but there is a strong mutual desire, I think, to have that happen. We would say that the orders made, or the declarations made, by the court on 9 March at page 269 of the appeal volume do constitute judgments, decrees or orders.
GAUDRON J: Except that - I mean, in one sense they do, but the difficulty with them is that the Federal Court has not then gone on to do anything about the orders made at first instance.
MR HAYES: And, as I recall, your Honour, it was that kind of matter that either your Honour or Justice Hayne raised with us when we came seeking special leave and the suggestion was that maybe we would be better off seeking prerogative relief, and, for our part, it would not matter much to us which form of relief it was, provided we got out of what would be, for us, the quite disastrous consequences of the declarations that appear there standing.
KIRBY J: But you could have approached the Full Court of the Federal Court and asked them to supplement the declarations and to make orders setting aside Justice Merkel's orders, because there is no doubt, is there, that the Federal Court has jurisdiction to do that.
MR HAYES: That is what we argued. After the first judgment in which they upheld our point about the construction of section 58AA, we said the appropriate order was set aside Justice Merkel's order 7. ASIC prevailed largely on that and said no, make certain declarations. So there was that debate, your Honour Justice Kirby, prior to the court making these orders, and the reasoning of the court makes it plain that the court sees these declarations as being linked into their conclusion that this was an ineffective judgment under the Jurisdiction Act.
KIRBY J: But in terms of the constitutional writs, because they derive their history from the prerogative writs, you have to address the record, and the record at the moment leaves Justice Merkel's orders standing. There is no impediment; there is just a declaration, and if that is set aside in the appellate process, there is no need for constitutional writs.
MR HAYES: We seek to have the Full Federal Court make an order setting that order aside and returning the money, the $28.5 million that has been sitting there for more than a year, and which is a matter of some real focus to the commercial parties. But we want to have that order set aside, and we want the Federal Court to so order.
Your Honours, I would just like to draw the Court's attention to a couple of passages - - -
KIRBY J: Could I just press this for one more moment. Where did the Federal Court refuse to make that order on a supplementary application by you?
MR HAYES: The only reasons that we have are those starting at page 262. Prior to that there had been submissions, and there is a transcript of the submissions of what was sought immediately preceding the Court's reasons. I think there are some written documents as well at the end of the first volume. The Court refers to oral and written submissions at the base of page 262. The Court goes on to say at the top of page 263:
The focus has largely been upon whether the Court should now order that the $28.5 million.....be repaid.
What was being sought in the written and oral submissions leading up to this judgment on behalf of my client, and supported by Normandy, was an order setting aside order 7.
KIRBY J: One could perhaps understand the Full Court taking the view that because a further appeal or application might be to this Court, that they would leave the money in kitty pending the determination of that application. But it does seem odd to have just made declarations and not to have carried forward the logic of their Honours' determination that Justice Merkel made his orders without jurisdiction.
MR HAYES: In adopting that course, the Full Court did not take up the submissions of myself for Edensor and Mr Young for Normandy Yandal.
KIRBY J: You say that the correct course would have been to have set aside those orders and if they were concerned to keep the money in court to agree to a motion by Mr Jackson's client to leave the money pending determination of an application for special leave.
MR HAYES: Yes. We invited that very thing. We said that is what ought to happen, there ought to be a limited stay whilst pending an application to this Court.
KIRBY J: But the fact is that the record leaves Justice Merkel's orders standing.
MR HAYES: Correct, your Honour, and we are - - -
KIRBY J: And courts, especially with constitutional prerogative relief, focus their attention on the record.
MR HAYES: Yes, your Honour. The record also includes declarations at page 269 to 270. What we seek to do is to have the record corrected by having those set aside and the Court directed to decide the matter what we would say is properly, and that is to set aside order 7.
GLEESON CJ: The reason why the Full Court acted as they did, as I understand it, is that they said, "This matter is now on its way to or in the Supreme Court of Victoria".
MR HAYES: That is plainly what lay behind the reasoning, your Honour. It is not expressed as such, but - - -
GLEESON CJ: It is expressed, for example, on page 266 in paragraph 11. They said it is up to the Supreme Court - - -
MR HAYES: It is now a matter, properly, for the Supreme Court, yes.
GLEESON CJ: Yes, it is up to the Supreme Court of Victoria to decide what should happen to that $28.5 million.
MR HAYES: Yes. We, with respect, take issue with that as to the correctness of it and we are seeking relief to correct that.
GLEESON CJ: But whether what they did was right or wrong, and that is the matter that we are here to decide, it is understandable.
MR HAYES: Some aspects of it are understandable, yes.
GLEESON CJ: They said, "This is an effective judgment. It is caught up by the remedial legislation of Victoria. The matter is now on its way to or in the Supreme Court of Victoria. We will assist that by declaring that this is an ineffective judgment".
MR HAYES: That particular application, then, when made to the Supreme Court to have the judgment enforced is faced with the declarations made by the Federal Court that this is, in effect, an ineffective judgment which is the direct result of the declarations that have been made and we seek to challenge that here as being incorrect.
KIRBY J: Is that meaning that the State Jurisdiction Act of the Parliament of Victoria is being taken by the Federal Court of Australia to control what the Federal Court of Australia in the exercise of the powers given to that court by federal legislation can and should do in the discharge of its functions as the Federal Court of Australia?
MR HAYES: It probably amounts to that because it was the Federal Court sending the matter, effectively, back to the Supreme Court sends it back with a message in the form of its declarations as to what the correct position is in terms of the applicability.
GLEESON CJ: Yes, speeding it on its way to the Supreme Court of Victoria.
MR HAYES: Yes, they were really wishing it God speed. They were very happy to see it go, but - - -
GLEESON CJ: It said "Bye-bye".
MR HAYES: "Bye-bye, and thank you for those long days of arguments we had. We will not trouble you further" because, the parties had, of course, argued the full appeal by the time the - I am sure the Court has picked up that the court came in and said, "Look, this is a matter that worries us", asked the parties to address, came in and said, "We would like to hear full argument"; heard full argument and then decided on the narrow point that it did, then heard further argument as to what it should do next.
McHUGH J: But the point is, is it not, that the money is held by the Federal Court, presumably under the control of the Registrar, pursuant to orders which are still on the record of the Federal Court. I cannot see, at the moment, any constitutional basis for the Supreme Court of Victoria to direct the Registrar of the Federal Court to hand the money over.
MR HAYES: No, nor can we. We would rather like to have that money, and we have been after it for over a year, especially when I hope to persuade the Court that of all of the matters are here, in the absence of parties either in person or represented who could have claimed compensation there was no legal warrant for the order under 737, in any event.
GAUDRON J: But that is really a different issue, is it not? It is one that is either to be determined by the Full Court, if it has jurisdiction, or one that does not matter, is it not?
MR HAYES: It does matter.
GAUDRON J: If the Federal Court had no jurisdiction, would not the appropriate order - indeed, the necessary order - for it to have made in this matter be to set aside the orders of Justice Merkel on the basis that he lacked jurisdiction?
MR HAYES: Yes.
GAUDRON J: "Pay the costs, go home, take your money", although he would not say that, but that would be the end of the matter. On the other hand, if the Federal Court has got jurisdiction, as Mr Jackson would contend, this is it not up to that court to determine the significance of the absence of parties? It really goes to power rather than jurisdiction, does it not?
MR HAYES: It certainly does, your Honour, but it is a pure issue of law able to be opined on by this Court and a relevant matter, we would hope, in the directions with which the matter is sent back to the Full Federal Court for decision.
GAUDRON J: Why would we take it on? I mean, realistically what is before this Court is very limited. At the moment there is before the Court applications for special leave to appeal, it being by no means self-evidently correct that they are even competent, and applications for prerogative or constitutional writs founded on jurisdictional error. Is that not all we have before the Court?
MR HAYES: That is what is before the Court. There is also error on the face of the record in terms of what we are seeking, so that adds a little bit to that. But your Honour is right; that is the narrow focus of what is before the Court.
GAUDRON J: Why would we give you special leave to appeal to argue something which was not decided by the Full Federal Court and is not reflected in the declarations?
MR HAYES: Order 7 and the power to make that order under section 737 is not a matter for which we seek special leave to appeal. We point out in our submissions, however, it is a matter that might well be relevant to the content of the prerogative relief that we are able to obtain. In other words, it is relevant to the issue of what the Full Court ought to be directed to do if the matter goes back. That is the only way we put that.
GAUDRON J: But the only thing the Full Court could be directed to do if the matter were to go back surely is to hear and determine the appeal before it. That is all it could be directed to do, whichever way it goes.
MR HAYES: That is correct, your Honour, in accordance with law and whatever it is that this Court determines should be taken into account by the Full Court when it comes to determine the matter.
GLEESON CJ: But if Mr Jackson's argument is right, the reason this $28 million is being kept in such safe hands for such a long time is that in addition to wanting to argue about the merits of Justice Merkel's decision, you promoted and, on Mr Jackson's hypothesis, persuaded the Full Court of the Federal Court to accept an erroneous argument to the effect that Justice Merkel lacked jurisdiction. We are at the point, if Mr Jackson is right, of correcting that error one way or another for the purpose of clearing the decks to enable the merits to be argued.
MR HAYES: And we are also seeking as part of clearing the decks to have the order 7 matter set aside and to get rid of, if we can, the declarations made by the court that at the moment effectively declare this to have been an ineffective judgment.
GLEESON CJ: What you will have succeeded in doing is leapfrogging the Full Court of the Federal Court on that point.
McHUGH J: I do not think it gets you anywhere practically, does it, because it seems to me that the Full Court, claiming to have jurisdiction to decide whether Justice Merkel had jurisdiction, that being so under section 28(1)(b) of the Federal Court Act, was authorised to make such orders if the circumstances of the case required it, which I would have thought required setting aside these orders and making some order in respect of a payment. But it has not done that now, and if you lose on the point that Mr Jackson has argued, all that would happen is that the matter would go back to be dealt with on the merits.
MR HAYES: That is correct. But if we win on the point that Mr Jackson is arguing, then what happens to the declarations that, we would say, are erroneous, and something has to happen about that? We want that record set straight. That is why we seek relief. We are here to both answer what Mr Jackson says and to get rid of, if we can, those declarations, they being the two impediments now that we have to face.
GLEESON CJ: Is there anybody here to support those declarations?
GAUDRON J: Did you not contend that the Federal Court lacked jurisdiction? One of us is confused. You may not want the declarations without relief, but was not your position before the Full Federal Court "no jurisdiction"?
MR HAYES: No. We said to the Federal Court that, on one view, there was no jurisdiction because there was no accrued jurisdiction, but we failed on that argument. We said if there was accrued jurisdiction, the remaining issue is one of power and that is a matter of the construction of section 58AA. That was the only point that the Full Federal Court really wanted to hear about when they came in on the morning of the appeal itself. What we argued, your Honour, was that, given jurisdiction, it was federal jurisdiction and it did not come within the relevant expression in section 58AA and therefore there was no power to make order 7.
GAUDRON J: Yes, and you have declarations that look suspiciously like that, do you not?
GLEESON CJ: And a great deal more besides. I am thinking of order 2.
MR HAYES: Yes, order 2 is the matter - what we asked was for the orders that the Court has been saying - we asked to have the order set aside and provision to be made for the money. That is what we asked for in the light of having got the - - -
GAUDRON J: But wait a minute. You cannot do it like that, can you, Mr Hayes? Let us assume we are talking about the appeal. This Court could only do what the Federal Court could have done, and that would be, on your argument, allow the appeal and set aside the orders and to get the money. The quickest way to get that order is to say there is no jurisdiction or power which, as I understand, is what you asked for. But you cannot just set aside those orders and then set aside order 7 without somebody determining the basis on which that should be done. It is all very well to do it on the basis that there was no jurisdiction, but to do it on any other basis requires a hearing and determination of the whole appeal, does it not?
MR HAYES: I accept that, but what happened was, we argued, successfully, that, on the proper construction of section 58AA, the Federal Court, in this case, was not the court, therefore, there was no power to make the order under section 737. That was what we succeeded on. That is all. That was all the court decided. There were many other matters argued but they were not determined. What ought to have happened after that, consistent with it, is the court ought to have set aside the order and made provision for the return of the 28.5 million subject to making either an application to the Supreme Court or an application to the High Court of some sort. Instead, the court declined our invitation to deal with the matter that way and made the form of the declarations that it did. We wish to have those set aside, that is all.
GAUDRON J: You wish to have the declaration set aside.
MR HAYES: Yes, your Honour.
GAUDRON J: In 1 and 2, at page 269.
MR HAYES: Yes, your Honour, and the matter referred back to the court to then determine the matter on the basis that if we are right, Mr Jackson does not persuade you, there was no power, that would be the only order that would then be available for the Full Court to make.
KIRBY J: I am not sure why you do not want to hang on, at least to assume declaration 1 is a proper declaration, hang on to that but get its logical and legal consequence, which is, you get the declaration that it was invalid and you then get the order setting it aside because it was invalid.
MR HAYES: The reason, your Honour, is because the basis of the argument that we put, that was upheld, was that it was invalid for want of power. Now, the reasoning here, the logic behind the wording here, 1 is linked into 2, that is how you get to this being an ineffective judgment. We submit that it is not an ineffective judgment at all if the failure is one of power and that it is quite clear that the Jurisdiction Act is concerned with failed cross-vesting, directly. So that the harm is that declaration 1, as worded, leads you straight into the ineffective judgment and the operation of the Jurisdiction Act.
GLEESON CJ: This is all aimed at sending everybody off to the Full Court of the Supreme Court of Victoria to argue the merits of the appeal.
MR HAYES: These orders?
GLEESON CJ: Yes.
KIRBY J: So that, in fact, the Full Court of the Federal Court, though it has power under its Act, a federal Act, properly to dispose of a precedent brought to it and invoking that Court's jurisdiction and power, says, "Because of a State Act, we will only use it in a limited and particular way", and, "Bye-bye, we will send you off to a State court". It sounds awfully like inconsistency between the State Act and a federal Act.
MR HAYES: We would agree, with respect. What we said to the court was that you ought to limit your - we did not argue, in fact, we argued to the contrary, we said, "You have jurisdiction, having disposed of the appeal, to make orders disposing of the subject matter of that appeal". We certainly did not argue that there was not jurisdiction to deal with the very matter that we had succeeded on. They seem to have taken the view that they either did not have, or should not, exercise it and, therefore, they left the matter in limbo and that is where all sides are aggrieved. Our grievance centres on the wording of the declaration and the failure to make the order we actually asked for which was the proper order to make if we are right, namely, setting aside the order.
KIRBY J: Where is your application where you sought - did you seek a declaration? Did you ever draft the form of the declaration you sought? Did it refer to power as distinct from jurisdiction or did their Honours pick up something you drafted erroneously?
MR HAYES: No, they certainly did not do that. That is nothing that we advocated at all.
KIRBY J: If it is in the documents at some time we could perhaps be referred to it. Do not bother about it now.
MR HAYES: I will have that found, your Honour. I have a feeling - we did give submissions in. We were asked by the court, I think - all the parties were asked to draft what would be the appropriate declaration, where appropriate to make a declaration.
HAYNE J: Is that right, Mr Hayes. When the court announced, that is the Full Court of the Federal Court announced its decision on 10 December, the order announced by Justice Sundberg on behalf of the court appears, at least, in the transcript that we have at 206 to have been appeal allowed and, in effect, matter stood over for further argument about consequential matters. Does anything, for present purposes, turn on what happened on 10 December and the then announcement that was made or is that simply part of the history that we need to put aside?
MR HAYES: I think it is the latter, your Honour. What happened was Justice Sundberg came and said, "Appeal allowed". My side then said, "That's nice. We'll submit an order". The order was submitted saying that. It was sent back. The court then said it wanted to hear argument as to what should happen. There then was argument. In that argument which was partly by, I think, phone link and partly face to face, the court asked the parties, before 10 December orders or declarations, to submit the forms of declarations they should make were it appropriate to make declarations. My side's interest, Mr Young's interests, argued that it was not appropriate to dispose of the matter that way. In answer to the Court's question as to whether or not the court took up a form of declaration, I will have to look and see what we and the others all put into the court but I am sure we did not put in a declaration in that form.
KIRBY J: You had the reasons of the Full Court, did you, at this stage?
MR HAYES: The first of the reasons, yes, we did, and we argued strenuously that on those reasonings this was a problem of power, not jurisdiction. It was not a matter in which the Jurisdiction Act applied and in any event it was not appropriate for the court to deal with the matter that way and that what they ought to do, if they thought there might well be an application of that Act, is to make the order previously discussed, that is set aside the order, grant a temporary stay whilst an application was made to the appropriate place to do something with it.
KIRBY J: Normally one would expect that the Federal Court would fully discharge and finalise its functions, which would lead to the making of orders disposing of the matter.
MR HAYES: Yes.
KIRBY J: Would you remind me, is there some problem in the State Jurisdiction Act that, in a sense, requires that the matter be kept alive? Would there have been any problem under that Act if the Federal Court had said, "Well, we set aside Justice Merkel's orders"? Is there any problem with the transmission of the matter then to the State court?
MR HAYES: Not that I am aware of, your Honour.
KIRBY J: Well, why would the Federal Court not complete and discharge its functions as the Federal Court of Australia?
MR HAYES: We do not know, your Honour. We asked them to. Your Honour Justice Kirby asked me the form of declaration. If you look at pages 222, 224 you will see that the declarations came from ASIC that the court has adopted. Not exactly, but in substance. They are the ASIC proposed declarations.
GAUDRON J: So your only interest here now, is it, is to argue that section 79 of the Judiciary Act does not pick up sections 567 and 569 of the Corporations (Victoria) Act?
MR HAYES Yes.
GAUDRON J: That is your only interest at this point?
MR HAYES: First of all, your Honour, we have an interest to say that the decision made by the Full Court the first time is correct, namely that the problem is one of power, that the court properly construed section 58AA. We also have an interest in going further and saying, and that very reasoning leads to the conclusion that this is not an ineffective judgment.
GLEESON CJ: But you also indicated an interest a little earlier in trying to persuade us if you could get us to deal with it, that Justice Merkel was wrong on the merits in the sense that he should not have made that order in a suit constituted as this one was.
MR HAYES: I did, and I do, and I was not getting the most encouraging of reactions to that, but we do seek that and that is in our submission and we say it is a pure issue of law, why not dispose of it. I mean, after all this money has been held up and this matter has gone into grid lock.
KIRBY J: But why would this Court deal with those matters when, by its order the Full Court of the Federal Court is never spoken on the matter? Why would this Court not merely, if it accepts your submission, perhaps set aside the declarations and require the Full Court of the Federal Court to complete the discharge of its functions before we do?
MR HAYES: That is what the court would usually do and the court can, if it wishes in its reasons, state what it believes to be the position in relation to the power to make the order. It is such a remarkable order that you would effectively either fine or order compensation under that section in respect of persons not before the court, not represented before the court, and so remarkable is it that we do hope to attract comments from the Court in its reasons, as relevant to when the matter goes back to the Full Court for consideration. We are well aware that normally the court, not quite invariably but almost so, would require the court below to have given its opinion on the matter before this Court has to deal with it. We appreciate the difficulties that that has, but we hope to persuade the Court that so strong is the point and in such short compass is it, that it can be dealt with in the Court's analysis of what has happened.
GAUDRON J: But that only arises in the alternative to your 58AA construction argument and the consequences that flow from that.
MR HAYES: That is true. We do say, your Honour Justice Gaudron, in our written submission that the logical order of matters here would have been, "Is this order 7 available under section 737; is there power?", and so on, but your Honour is right, in terms of the way this matter is before the Court, that is so.
Just to complete my answer to Justice Kirby: our submission about the matter was at page 215 in the first volume of the appeal book and we basically said, "The position is simple, we want our money back." Then we put in a further submission following the video conference, in which you will see, starting at page 218, again we are saying that, at point 4, the appellant endorses Mr Young QC's submission as to the power of the Federal Court as an appellant court to make final orders. We were very specific as to what it was that we were asking the court to do. What the court has done is adopt the submission of ASIC in this regard and, in so doing, it has fallen, we will say, into demonstrable error.
Just on that, before I get to the substance of the matter in terms of the arguments Mr Jackson has raised in particular, can I just draw the Court's attention in the second set of reasons, 9 March reasons, that the court says at page 265, that:
It is clear that, when the order was made, the learned judge at first instance was purporting to exercise the jurisdiction of Victoria that was believed to have been validly conferred on the Federal Court by the Corporations (Victoria) Act . In our view, these circumstances lead to the conclusion that the order for payment amounts to an ineffective judgment under the State Jurisdiction Act.
What Justice Merkel actually said in volume 1 of the appeal books, at page 113 is that:
the Court has accrued jurisdiction to determine the whole of the matter in controversy.
The Full Court, having correctly found, subject to perhaps some doubt about some of the wording, that there was a want of power here, then has made what we would respectfully submit is an impermissible leap and said, "Oh, Justice Merkel was exercising State jurisdiction. It is only the failure of that that is the problem, therefore it is an ineffective judgment". But Justice Merkel was not purporting to do that; he was purporting to exercise accrued jurisdiction.
I do not know whether the Court has picked up the history of the matter, but the Trade Practices claim was brought in after the action commenced. Whether the expression "jurisdiction insurance" was used, that was the sentiment; it was there in the light of the fact that Wakim was about to be decided and there were some pessimists around in terms of whether or not the decision would go the way it turned out to go. That was the basis of the amendment to bring in the Trade Practices Act claim to attract, if necessary, an alternative way of putting jurisdiction.
No one was there from ASIC saying, "We do not need any of this, we have section 39 of the Judiciary Act, we have section 11(7) of the ASIC Act", and so on. They brought in the Trade Practices Act as insurance in case it should turn out that Wakim was decided as it was. They, by doing that, had probably attracted, if nothing else, accrued jurisdiction. It becomes a federal jurisdiction matter. Once it is a federal jurisdiction matter, it is out of the realm of section 58AA, it is out of the meaning of "ineffective judgment".
GUMMOW J: The question is: what is the realm of section 58AA?
MR HAYES: I will come to that - - -
GUMMOW J: It seems deeply mysterious to me. I would have thought the relevant source of jurisdiction, in this case, back to what Justice McHugh has mentioned to you before, it is not in section 58AA, it is in 42(1) of the State Act.
MR HAYES: We agree with that, your Honour. But it is the meaning of "court" that I - - -
HAYNE J: And that is nothing to do, at least on this view of the Act, with jurisdiction.
MR HAYES: I agree with that. The problem is not purely one that - the Federal Court when exercising federal jurisdiction is not, in the language of the section, empowered to make order 7.
McHUGH J: The Full Court seems to have gone off prematurely. What I cannot follow is that you had an appeal on foot against declarations 1, 2 and 3 - - -
MR HAYES: We did.
McHUGH J: - - - which went to the merits, which the Full Court said Justice Merkel had jurisdiction with respect to - - -
MR HAYES: Which we accepted.
McHUGH J: And they have never been dealt with. Those declarations are still on foot, the appeal has not been dealt with; I get the feeling that somehow or other the Full Court did not want to make orders in respect of this money until the whole appeal was dealt with, or am I wrong about that?
MR HAYES: Your Honour, I cannot go beyond the explanation I have given. They did not do what we asked - that happens often enough - they plainly wanted to send the matter elsewhere as quickly as possible - they are only human. But the fact of the matter is they got out too early; they got out without disposing of matters that were squarely within their role to do, ie - - -
McHUGH J: What did the Full Court contemplate doing with the appeal against declarations 1, 2 and 3 about your breaches of the Trade Practices Act?
MR HAYES: This creates interesting arguments down the track in this matter because, if this is an ineffective judgment, you are going to have appeals on some matters in the State Supreme Court and presumably appeals in other matters in the Federal Court. The possibility of operational inconsistency arises. Presumably the Full Federal Court does not propose to deal with any aspect of the appeal, even those within their undoubted jurisdiction. The argument we put, I might say at the invitation of the court, because Justice Hill came in on the first morning and said, "We want to hear what you say on this point", was directed only at order 7, the vesting orders, if you like, or the alternative to the vesting order. That was what the object of that argument was about and only that. Indeed, part of the matter we were saying was, "Your Honour, the court's still got to dispose of whether there was a contravention of section 615 as the basis of the relief sought under the Trade Practices Act, for example".
KIRBY J: Can I just understand: is your theory of this that what the Full Court was doing was saying, "We've come to the view, we in the Full Court of the Federal Court, that this is an ineffective judgment. Therefore, we should do as little as possible. We'll merely make these declarations and then it's on its way, as they say, to the Supreme Court and it will be plugged into the Supreme Court at the level in the hierarchy that the State Jurisdiction Act provides and it will go to the Court of Appeal of Victoria instead of troubling us, and it's out of our list, it's gone"?
MR HAYES: Yes.
KIRBY J: And they do this without discharging the functions of the Federal Court of Australia.
MR HAYES: Yes, and nothing that was said by us or by Normandy Yandal was in any way asking them to do that. In fact, we were both saying, "What you've got to do is go ahead and complete the matters that you've undoubtedly got before you that you should deal with".
GLEESON CJ: Mr Hayes, the explanation may lie in the way the matter was put by one party or another to the Full Court but it is the relationship between the first and the second of the declarations on pages 269 and 270 that I cannot quite understand at the moment. Their reasoning was all devoted to declaration 1 but declaration 2 comprehends, does it not, so much of the decision of Justice Merkel as concluded, for example, that there was a contravention of section 615?
MR HAYES: I think the answer is that whilst on the face of it that is right, this court was dealing only with order 7.
GLEESON CJ: You would construe declaration 2 in the light of declaration 1?
MR HAYES: Declaration 2 taken on its face is clearly broader than that but, when I look at the reasons, I look at declaration 1, I look at the apparent purpose of what is going on. The only thing that could possibly explain it would be if it was linked in to declaration 1, otherwise what do you do about the admitted federal jurisdiction matters under the Trade Practices Act?
GLEESON CJ: But what explains the fact that the court then has not listed the matter for further argument in relation to the other aspects of Justice Merkel's decision that are unrelated to order 7?
MR HAYES: I am sorry, your Honour, could you just repeat that question?
GLEESON CJ: Unless declaration 2 is intended to be as wide as it appears to be and does not have the limited effect that you just suggested, why is not the Court hearing and determining so much of your appeal as is devoted to matters other than order 7?
MR HAYES: Your Honours see at the end of the order, page 270:
this appeal be stood over until a date to be fixed -
pending the -
application to the High Court -
What that means I am not sure, but it is consistent with the intention being, "Well, let us see what the High Court does to us and there might well be some other matters that have to be dealt with." I am having to surmise the order is expressed more broadly, but let us face it, there were plainly matters within jurisdiction which no one had argued were not, which had been fully argued, which had not been determined, which the court has declined, at least for the time being, to determine and the argument that went on that led to these declarations was all towards order 7 and what you do about order 7. That was the very specific, if not the exclusive, the predominant focus of that debate.
GLEESON CJ: I have not checked your notice of appeal but were you intending to seek to persuade the Full Court of the Federal Court that Justice Merkel was wrong in his findings of fact in relation to this agreement between - - -
MR HAYES: Yes, fundamentally.
GLEESON CJ: Yes.
MR HAYES: We said the findings of fact were wrong, there was no legal warrant to make order 7, there was no factual warrant to make order 7, there are a score of discretionary factors that - - -
GLEESON CJ: I am not limiting this to order 7. The declaration would have been a contravention.
MR HAYES: All of them. No, we argued against all of the orders, on all of the factual findings, essentially.
KIRBY J: Obviously, their Honours felt that having reached the conclusion which they gave voice in declarations 1 and 2, there was poison in their well. They had to get rid of the matter. They could not deal with the merits of the matter because they had no jurisdiction and the sooner they got rid of it to the Supreme Court of Victoria the better, that is obviously what their Honours thought, but my understanding is that the Full Court - the Federal Court still has the power and the duty to complete its part by setting aside invalid orders, orders without jurisdiction, to a superior court of record.
MR HAYES: We agree and we so submitted to the Full Court, that is all I can repeat. I cannot explain the mystery of what went wrong. The court obviously was concerned to decide as little as possible because of its feeling the matter was going to end up in the Court of Appeal, I would think, and either overlooked or had some reason unexpressed to not deal with the remaining matters.
HAYNE J: Of the matters in your supplementary notice of appeal to the Full Court of the Federal Court, which is at 143 and following, are the grounds undetermined grounds 5 to 10? Perhaps, if you want to consider that and answer me later, by all means do, but - - -
MR HAYES: No. Thank you, your Honour. I had looked at this a couple of days back. The answer is, yes, all of 5 to 10 has not been dealt with.
HAYNE J: The first four grounds being grounds related to questions of jurisdiction and only relating to questions of jurisdiction.
MR HAYES: I believe that is so, your Honour. Now, can I stand back from the procedural mess and try and deal with the substantive mess. Your Honour, our starting point is that, assuming we are dealing with one matter here - and there is a real issue about that, we accept, but we would point out that it was argued on the basis of one matter at all stages - but assuming that for a moment, the only source of power for the Federal Court to make order 7 was section 737 and only if it was the Federal Court exercising the jurisdiction of this jurisdiction.
GUMMOW J: That seems to me to start at the wrong point, because it ignores what flows from the Constitution, which is the bedrock here.
MR HAYES: Yes, of course, but - - -
GUMMOW J: And what was involved in the matter.
MR HAYES: Your Honour, it is one thing to know what is the subject - - -
GUMMOW J: Can I just put this to you. Take a case like Blomley v Ryan which is a student's case about the rescission of contracts for buying land from drunken graziers. It was tried here by Justice Taylor. He was tried with.....jurisdiction, and the Court ended up refusing specific performance and setting aside the contract, so the vendor lost the contract. If your argument is correct, if the vendor tried to assure the vendor's position by putting on a caveat, this Court could not have awarded removal of the caveat because the relevant State Act undoubtedly says you go to the Supreme Court to get caveats off.
MR HAYES: Section 79 would probably apply then, your Honour.
GUMMOW J: Well, why does it not apply here?
MR HAYES: For the very reason - - -
GUMMOW J: But just assume section 79 did not exist and I asked you go to the Constitution. Assume there was no section 79, why would it not flow out of Chapter III itself? What is the point of having an accrued jurisdiction, as one uses that expression, other than another law? And what that that law then operates by reference to, what triggers it is the invocation of federal jurisdiction. Because of covering clause 5, that is top dog. You begin down the tree.
MR HAYES: I do begin down the tree, a bit afraid of vertigo, I suppose. But I do submit it is the appropriate place to start here, because the court makes an order. No one disputes that it had jurisdiction to deal with the subject matter.
GUMMOW J: What does that mean?
MR HAYES: The facts, the matters in issue.
GUMMOW J: Yes, in issue, why? What is it that directs the issues?
MR HAYES: Either because there was accrued jurisdiction as a result of the Trade Practices Act or because there was original jurisdiction in a number of respects by reason of either the ASIC Act or the Judiciary Act, one of the sections that Mr Jackson has been arguing about. That brings the whole controversy - - -
GUMMOW J: No, not the whole controversy. The controversy with a leg chopped off, namely, remedy, which is why people go to court. They do not go to court to have a debate about rights. They go to court to get remedies. When you talk about resolving a controversy, you are not talking about having an intellectual debate, you are talking about getting a remedy, I suppose.
MR HAYES: Sometimes, your Honour, when it is found that the remedy, the leg that has been chopped off, means that, in fact, although there is a common substratum of facts, there is more than one matter and - - -
GUMMOW J: There is not more than one matter here.
MR HAYES: Well, Mr Jackson argues, as one of his alternatives, that there is, and it has not ever been said, but if you were to take the view that, without the ability to make a section 737 order, there would be no point in attracting the jurisdiction to deal with the relevant parts of the Corporations Law, the answer to that might well be that that really is quite a severable matter. In other words, the absence of the power in that particular instance might lead to the conclusion that there is a separate matter.
GUMMOW J: But why would the Constitution produce such a bizarre result, given the philosophy that underlies the whole of these cases.
MR HAYES: That is true, your Honour, but the underlying philosophy is to give jurisdiction and you are either going to make orders that are at common law - - -
GUMMOW J: Jurisdiction to do something.
MR HAYES: Yes. To decide the factual controversy, the matter - that is what - - -
HAYNE J: And do what? Simply make a declaration of right, to accept that declaration of right could be granted at the end of this controversy.
MR HAYES: Declarations could be made that there were, subject to factors, that there was a contravention. Injunctions could be granted to stop the conduct. We do not disagree with that.
GUMMOW J: On what footing?
MR HAYES: On what basis could you do that?
GUMMOW J: Yes. Where is the power to grant the injunction?
MR HAYES: The power there, I think, comes through either the Trade Practices Act or the Judiciary Act itself. There are provisions dealing with the granting of injunctions and declarations. Your Honour, the remedies do not just appear out of the ether. The remedies either come from common law or they come from some statutory - - -
GUMMOW J: Of course. They come from a State statute and whenever the State Parliament enacts a law of this description it is subject to the Constitution.
MR HAYES: Yes, always.
GUMMOW J: The Constitution says, when you invoke federal jurisdiction, this is what is lifted in.
MR HAYES: Correct.
GUMMOW J: End of problem.
MR HAYES: I do not seek to argue with that but, nevertheless, there has to be some source of the power to grant the remedy. Either the common law, equity, some statute. Now, here - - -
GUMMOW J: No, you keep saying some statute. It is Chapter III of the Constitution which operates in this way. That is the supreme law.
MR HAYES: My submission to the Court is that Chapter III does not create all of the remedies. It creates - - -
GUMMOW J: Of course, it does not.
MR HAYES: No, and the only remedy here is under 737, and 737 is a statutory remedy.
GUMMOW J: All right. Are you saying - I will not ask any more.
MR HAYES: I am answering your Honour as best I feel I can but, in my submission, if there was one matter here - - -
GAUDRON J: And you accept that there was?
MR HAYES: I submit that there was, but I raised the question of whether there was more than one, as you have to here.
GAUDRON J: Yes.
MR HAYES: Assuming, as I submit, that there was one matter, on any view, the Federal Court had federal jurisdiction to deal with the matter, and it had, with that, such remedies as the Federal Court was empowered to exercise.
One of those was under section 87 of the Trade Practices Act. Another, if the circumstances are right, would be under those 12D whatever provisions of the ASIC Act, although we say that Act does not apply here. Another would be if section 737, on its terms, was a remedy given to the Federal Court and at this point you have to go back to the co-operative scheme, I might add of which the ASIC Act is part, to work out what was intended to happen here.
KIRBY J: Can the orders made by Justice Merkel be viewed as orders under the Trade Practices Act, section 87?
MR HAYES: No, your Honour.
KIRBY J: Can they be seen as orders made in any other power of the Federal Court or are they in their terms justifiable only under section 737 or not at all?
MR HAYES: It is the latter, your Honour. Those orders could not be justified under any alternative source of power other than 737, in our submission. There is nothing in section 87. There is nothing in the ASIC Act that would enable you, in the way this action was constituted, without parties being represented before the court and proof of loss and damage and so on, to make these orders. You could not.
So you have to come in through section 737, and 737 is part of the co-operative scheme and the co-operative scheme of which the ASIC Act was part had the obvious intention of creating a patchwork of jurisdictions or rights to appear across the nation so that a matter being heard, say, in the Queensland Supreme Court, involving a company the subject of the Victorian Companies legislation would have jurisdiction to deal with the matter. The Federal Court, say, sitting in West Australia, dealing with a company subject to the Victoria Corporations Law, would be given the right to deal with those matters, that that is everything under the Companies Law arising from the vesting of that jurisdiction under the co-operative scheme from Victoria to the Federal Court.
ASIC was a part of that matrix and the ASIC Act was part of that matrix. Now, what happens then is there is no scope, you would think, under that scheme for the need for accrued jurisdiction because the Federal Court will always be exercising a jurisdiction from whichever company for whichever State the company comes, usually based upon its incorporation. Then you say that is why, in part, the expression "jurisdiction of this jurisdiction" is used. It is explained by the historical origins.
GUMMOW J: No, it is not. It is explained by section 9 of the Victoria Corporations Act.
MR HAYES: True, your Honour, but that in turn was based upon the co-operative scheme of which Part 9 is an important part and the wording from Part 9 is taken into, relevantly, section 58AA.
GUMMOW J: That is not quite right, is it? It is section 7 of the - we have been through this so many times - section 7 of the Corporations (Victoria) Act says that the Corporations Law of Victoria shall be the Corporations Act as set out in section 82.
MR HAYES: Yes, your Honour.
GUMMOW J: Right. So you read this in. It is the last schedule to this Act.
MR HAYES: Yes. You do.
GUMMOW J: And in the course of that Act you come to Part 1 and there are many pages of definitions and amongst them is 58AA.
MR HAYES: Yes, your Honour, and the definition in section 58AA comes from within and is, in our respectful submission, explicable by the co-operative scheme out of which the Act came, of which the sections that your Honour has drawn to my attention are also part, the intention being apparent that the Federal Court would, when exercising rights under the Corporations Law, would be always dealing with a State matter, always.
GUMMOW J: That cannot be so.
GAUDRON J: But that cannot be so. If the Commissioner of Taxation has applied to wind up ABC Ltd, federal jurisdiction.
GUMMOW J: Moorebank v Deputy Commissioner of Taxation makes it as plain as a pikestaff.
GAUDRON J: And it would not matter whether that was in the Federal Court or a State court, it would still be federal jurisdiction. So you have to read 58AA in that context.
MR HAYES: There are several possible answers to that, we respectfully submit. Before I endeavour to do those, can I remind the Court of what Justice Kirby said about the meaning of the expression in the decision in Merribee Pastoral Industries [1998] HCA 41; (1998) 193 CLR 502 at 512. I am relevantly here reading the passage as extracted in paragraph 23 of Normandy and Yandal's submissions in matter M20. The quote starts:
Where the word "court" appears.....Accordingly, the first definition contained in the Law applies. It means "any court when exercising the jurisdiction of this jurisdiction". The latter expression is awkward. However, especially by reference to the definition of "the Supreme Court of this or any other jurisdiction", it is clear that it is intended to mean the jurisdiction of Australia in which the Law is relevantly operating. With application to this case, such jurisdiction is that of New South Wales. Although this court is, by the Constitution, part of the judicature of New South Wales, an application to its original jurisdiction.....is not one which comfortably falls within the phrase "any court when exercising the jurisdiction of [New South Wales]". When performing its functions under the Constitution, this Court is exercising the jurisdiction for which that document provides. It is doing so for, and in relation to, the entire Commonwealth. It is not, as such, exercising the jurisdiction of a component part of the Commonwealth such as New South Wales.
We respectfully submit that Justice Kirby's statement is right and it is, with respect, also self-evidently right.
GAUDRON J: What about the Commissioner applying for the winding up of a company?
MR HAYES: They might have made another mistake.
GAUDRON J: Who might have made another mistake?
MR HAYES: The draftspersons of the legislation.
GAUDRON J: So there is no jurisdiction in the State court or the Federal Court, according to your submission, to wind up a company on the petitioner of the Deputy Commissioner of Taxation?
MR HAYES: That might well be a conclusion that follows after Wakim and from the construction that we are advocating. I am looking, however, at the plain meaning of the section in the context of the co-operative legislation out of which it comes. Of course, your Honour Justice Gaudron, when it was enacted, it was not thought to be a problem because Corporations Law matters were going to be able to be dealt with by federal and State court alike without any of these problems arising.
GAUDRON J: But what it was concerned with only, surely, was vesting jurisdiction that would otherwise be purely State jurisdiction and which the court would not have. You make it deal with all jurisdiction. The hypothesis on which you must proceed is that all jurisdiction with respect to matters arising under the corporations legislation is State jurisdiction unless it is Territory jurisdiction.
MR HAYES: Yes, your Honour.
GAUDRON J: But it is that hypothesis which does not withstand scrutiny.
MR HAYES: Before the decision In re Wakim, the position was that either the Supreme or the Federal Court at will was able to deal with a winding up application brought by the Commissioner for Taxation.
GUMMOW J: Yes, but nevertheless, it was exercising federal jurisdiction, just because of section 75(iii) of the Constitution. I invite you to go back up the tree again. In the case of the State courts, 75(iii) plus section 39 of the Judiciary Act.
MR HAYES: Yes, your Honour, and - - -
HAYNE J: What does that then say about the expression, "When exercising the jurisdiction of this jurisdiction" in section 58AA?
MR HAYES: It does not alter the plain meaning, in our respectful submission.
HAYNE J: So what does the composite phrase mean? "When exercising the jurisdiction of this jurisdiction" means, does it, on your submission, "When exercising State, not federal, jurisdiction"?
MR HAYES: Yes.
HAYNE J: How can that have operated, regardless of Wakim, in the case of the Deputy Commissioner petitioning for winding up?
GLEESON CJ: Which happens to be, and to have been for years, the most common form of proceeding under the Corporations Law.
HAYNE J: Taken always in the Supreme Court because the Commissioner, as I understood it, did not trust cross-vesting.
MR HAYES: Your Honour, the expression, "the jurisdiction of this jurisdiction" - to take up the first part of your Honour's question - the first reference to "jurisdiction" is in the general sense of the jurisdiction to deal with the subject matter. "Of this jurisdiction" has to mean something. We see it the way Justice Kirby saw it. We see it in the context of the co-operative scheme. We see it as being based on the fact that each State was authorising each other State to deal with company matters. Do not forget this all arose out of some difficult High Court litigation that had preceded the statutory scheme. We see it as having to give some meaning to the second part of the expression "of this jurisdiction". The only other meaning that has ever been put forward is that it is somehow geographical and, in our respectful submission, that cannot be right.
We say there are difficulties that have emerged with this scheme, but one has to give meaning to the second part of the expression "of this jurisdiction". Here, post-Wakim, the Federal Court was dealing on any view with federal jurisdiction, be it original or accrued.
GAUDRON J: So it was not exercising the jurisdiction of this jurisdiction for the purposes of the statute?
MR HAYES: It was not.
GAUDRON J: So why did the definition have anything to do with it?
MR HAYES: Because - - -
GAUDRON J: Just think about it. Why was that not a definition restricted to the situation where there would be no jurisdiction if there were not State jurisdiction?
MR HAYES: Your Honour, there is a definition given to tell you what "court" means.
GAUDRON J: Yes.
MR HAYES: It is not an inclusive, it is the definition.
GAUDRON J: Yes, but it is a definition in a context, means any of the following courts, let us say, when exercising Victorian jurisdiction, but it does not say anything, it does not speak to the situation when federal jurisdiction is involved.
MR HAYES: No, it does not; it does not include it within the power.
GAUDRON J: We are not looking at the power here, we are looking at a definition.
MR HAYES: Yes.
GAUDRON J: There is a definition which is limiting the jurisdiction which goes to the State and Federal Courts, in a sense, from Victoria. It is not concerned to limit the jurisdiction that goes to those courts from New South Wales, Western Australia, Adelaide or anywhere else, nor is it concerned to limit the jurisdiction that comes from the Constitution or the Judiciary Act.
MR HAYES: It is certainly not privative, it does not purport to exclude anything, but it is the only definition of what "court" means, which is the gateway into the remedy. That is what we put. Now, we say when ASIC is enforcing or acting under the Corporations (Victoria) Act, it is not, by so doing, acting as or on behalf of the Commonwealth. That was a matter that was left live by at least Justice Kirby in the Hughes' Case, the question being then whether or not, ASIC, for example when it is referred to in section 737, means in any capacity or means when only acting as the Commonwealth. Now, if ASIC is acting to enforce the State Corporations Law, ASIC is not, necessarily at least, acting as the Commonwealth, assuming it is the Commonwealth for this purpose. We also say that it is interesting that in parts of the Judiciary Act, the full expression from section 75(iii) of the Constitution is taken up and in other parts, such as the section 39 provision, simply the expression "Commonwealth" is used.
So we say, in fact, in this context, Commonwealth has a narrower meaning but if we are wrong about that, in any event, when ASIC is acting pursuant to or to enforce the Victoria Corporations Law, ASIC is not acting in that context as the Commonwealth.
GLEESON CJ: Mr Hayes, I am sorry to spend undue time on this but I would like to pursue the matter of winding up power. Section 459A provides that:
On an application under section 459P, the Court may order that an insolvent company be wound up -
Section 459P tells you who may apply and that includes "a creditor". Now, where the creditor is the Commonwealth and an application is made to the court for an order that the insolvent company be wound up, what is the source of the jurisdiction to make that order and what does section 58AA have to say about that?
MR HAYES: Would your Honour just pardon me for a moment? If the Deputy Commissioner of Taxation applies to the Victorian Supreme Court for a company to be wound up it is a court:
exercising the jurisdiction of this jurisdiction.
HAYNE J: No, the jurisdiction is conferred on the court by section 42 of the Corporations (Victoria) Act, is it not, and none other provision, because it is a civil matter arising under the Corporations Law.
MR HAYES: Yes, your Honour.
HAYNE J: Does it then admit of this understanding of section 58AA, that 58AA simply does not address any distinction between federal and non-federal jurisdiction, it is no more than a definition of two forms of court - upper case and lower case courts - not a conferral of jurisdiction, that subject being dealt with, relevantly, entirely by section 42 of the Corporations (Victoria) Act and 58AA takes the form it does, firstly, so as to distinguish between what might loosely be called superior and inferior courts, or superior courts and all courts, is probably a more accurate identification of the difference, and to do so in respect of matters which arise out of the Corporations Law of the particular State. And that is the only purpose of 58AA, it has nothing whatever to say about questions of jurisdiction.
MR HAYES: I agree that it does not have anything to do with jurisdiction. It has everything to do with what power there is for courts within that jurisdiction to make particular orders and that is a fundamental difference. That is why we start at this part of the tree we do. We are not doubting the jurisdiction. It is the power of the court to make the order. The Supreme Court of Victoria is "exercising the jurisdiction of this jurisdiction". So when the Deputy Commissioner applies to the Supreme Court of Victoria, the court can make a winding up order.
HAYNE J: And it is "exercising the jurisdiction of this jurisdiction" in the sense that it is dealing with a civil matter arising out of the Corporations Law of Victoria. Not - that is, a matter arising out of the Corporations Law of the Capital Territory, or New South Wales, or elsewhere, but out of Victoria.
MR HAYES: That is right.
HAYNE J: That is all 58AA is doing.
MR HAYES: Yes, but that supports what we are trying to say because the jurisdiction we are not doubting, it is the power to make order under section 737.
GUMMOW J: But just adapt that to the winding up analogy which is a point that has been put to you, what is the point of saying they have jurisdiction in the winding up case if they cannot make a winding up order?
MR HAYES: In a winding up case - - -
GUMMOW J: Do you say they can make a winding up order?
MR HAYES: Yes. In the Supreme Court of Victoria they could because it would be exercising the jurisdiction of this jurisdiction, Victoria.
GLEESON CJ: In a matter in which the Commonwealth is a party.
MR HAYES: Yes. That would not stop it being, your Honour, within the jurisdiction of this jurisdiction.
GLEESON CJ: Exactly. The fact that it is exercising federal jurisdiction does not stop it being within those words.
MR HAYES: It is under the jurisdiction of the Victorian Companies Act.
McHUGH J: But it is still federal jurisdiction. Just the same as was established in Commonwealth v Anderson, when the Commonwealth starts ejectment proceedings in the Supreme Court of a State by reason of section 39(2) of the Judiciary Act, it is an exercise of federal jurisdiction. It may be an ejectment action, but it is an exercise of federal jurisdiction.
MR HAYES: Yes, but in the context that the definition that gets you into the power to make the particular remedy requires you to be exercising jurisdiction in the sense of under the Victorian Companies Act or law.
McHUGH J: No, the Victorian law may provide the criterion of rights, duties, powers and liabilities but it is all done in the exercise of federal jurisdiction.
MR HAYES: I cannot take that matter further for now.
McHUGH J: No.
MR HAYES: I will try and regroup on that overnight but, your Honour, we do say that it is a definitional thing. It is a matter of what the power is. It is a matter of how you construe 58AA.
KIRBY J: As I understand it, your submission is simple. It is either right or wrong. Here is a very specific power. It is on very particular conditions. It is identified by reference to a juxtaposition which need not have been there but is there. That is a juxtaposition that draws a distinction between "the jurisdiction of this jurisdiction" and otherwise and either it falls within or it does not and by specifically confining it to that it limited the powers, and courts normally do not make orders unless they have power. They may have jurisdiction in a general sense over the parties. They normally do not give relief and make orders unless they have power to do it.
GLEESON CJ: If you are right on this point in relation to its application to winding up orders, the point would remain valid even if the decision In re Wakim had gone the other way, would it not?
GUMMOW J: Another aspect of 58AA is that it tells you why you go to the Supreme Court in exercise of federal jurisdiction, not, say, the County Court or the District Court. It is "within the limits" that are spoken of in section 39 of the Judiciary Act. There is an investment of federal jurisdiction within the limits of the State structure and this tells you what that limit is. It directs you to the Supreme Court. The Commissioner goes there. That is another way 58AA operates.
MR HAYES: It does, but in relation to subpart (b) - - -
GUMMOW J: But there is nothing empathetic to federal jurisdiction in all of that.
MR HAYES: The only limitation, your Honour, if there is one, is in the introductory words "when exercising the jurisdiction of this jurisdiction". Could I answer the Chief Justice's question in the morning, but deal with some other matters and then come back to that before I finish? I made the submission a moment ago as to what ASIC is in terms of whether it represents the Commonwealth when it acts in relation to the Victorian Companies Law. Can I now deal with the issue of what section 79 does.
If section 737 referred to "court" and there was no definition of "court", then there would be no difficulty in section 79 operating so that you read "Federal Court", otherwise you could not apply it. Even if "court" was defined as Supreme Court, there would be no difficulty, because if it is going to be picked up by the federal law there is no change to it by the Federal Court, there is no change to it that is required. You would happily read that as "Federal Court". Here there is a specific definition in relation to the circumstances in which the Federal Court is the court for this purpose. It, therefore, would require some true alteration to the section for it to be able to bring section 58AA into a form where it would empower the Federal Court.
Justice Mason, as he then was, dealt with that matter in John Robertson v Ferguson Transformers 129 CLR, and I am reading from page 95, at the top of the page, after a quotation:
The broad purpose of s. 79 is to ensure that the laws of the States are applied by courts in the exercise of federal jurisdiction. In general that purpose is achieved by the application of a State law according to its terms. Indeed, s 79 contains no express provision which would enable a court exercising federal jurisdiction to alter the language of a State statute and apply it in that altered form. However, the presence of the words "including the laws relating to procedure evidence and the competency of witnesses" exhibits a clear intention that State laws relating to those topics should apply to federal jurisdiction. This purpose would fail partly in its objective if State laws on these topics are to be given a literal application under s. 79 by courts other than State courts.
Then the next paragraph:
To ensure that State laws dealing with the particular topics mentioned in the section are applied in the exercise of federal jurisdiction by courts other than State courts, it is necessary that State laws be applied according to the hypothesis that federal courts do not necessarily lie outside their field of application. Section 79 requires the assumption to be made that federal courts lie within the field of application of State laws on the topics to which it refers, at least in those cases in which the State laws are expressed to apply to courts generally. This departure from the general principle that the section requires a State law to be applied according to its terms is justified, indeed demanded, by the clear requirement that State laws on the topics mentioned are to be applied in federal jurisdiction.
In a situation where you have a definition, it does not just say the "court", where the definition itself in its terms imposes some limits on the circumstances in which the Federal Court comes within the definition of "court", then we would submit it falls into what you might say is the third of the categories being mentioned by Justice Mason and that it requires some alteration, on our construction of what the section 58AA means, of that section to apply it under section 79. It is not just a straight adaptation in circumstances where either it just refers to court or specifically to Supreme Court or State courts, but where it comes with it the definition that is contained in section 58AA.
Now, that is what we say, your Honours, about why section 79 does not apply. If I could then deal with one other disparate matter before we break. Mr Jackson referred to the various provisions around 12DA in the ASIC Act. If I could ask the Court to go back to those provisions - - -
McHUGH J: Just before you go on to that, you seek to make section 79 inapplicable because of what you call a narrow view of section 58A, but when you look at 737 in the context of the definition in 58A, is it not plain that the Victorian legislature included it to have a wide range to include federal courts, supreme courts, family courts, and courts in respect of which proclamations had been - - -
MR HAYES: Yes, but when you are dealing with Federal Court, it did not just say "Federal Court", it is Federal Court in the specific circumstances that are there described, and that is limiting.
McHUGH J: Well, it is, no doubt, in one sense, but then this is an authority given to the Commission. That is to say, section 737 gives the Commission power to make an application. If one was looking at what the section did, does not that throw some light on the generality of it, that it was intended to protect the Commission, shareholders, and so on, making it a suitable case for section 79 to apply?
MR HAYES: Your Honour, section 79, prima facie, picks up a State law and applies it.
McHUGH J: Yes.
MR HAYES: In some circumstances it can adapt it as long as it does not alter its meaning. That has certainly been so in the case of procedural laws and arguably also in relation to substantive matters.
GUMMOW J: Well, not arguably.
MR HAYES: I accept that, your Honour. Justice Mason was talking about procedural orders in the passage that I read from.
GUMMOW J: Yes, I know. The section says "including".
MR HAYES: Yes. Without alteration, of course. The words at the end of the section are very important, in context, and you would be - - -
GUMMOW J: But it does not have those words either. It says:
in all cases to which they are applicable.
MR HAYES: Applicable. Now, in our respectful submission, where you have got something more than just either a word like "court" without definition or a word like "court" as the State court but where you actually contemplate the circumstances in which the Federal Court comes within the definition, then you have got something that would not be applicable in its direct application. You would have to find a way of altering those words. Now, you cannot apply something mutatis mutandis which alters the apparent intention of the section which because of the complexity of the definition in relation to Federal Court you would be doing.
GLEESON CJ: Mr Hayes, I am asking this question for the benefit of people in the next case. How long do you think you will require to complete your argument?
MR HAYES: Half an hour.
GLEESON CJ: Mr Young.
MR YOUNG: I expect to be between one and one and a half hours. (inaudible)
GLEESON CJ: Yes.
McHUGH J: Because you have to get leave on that.
GAUDRON J: Well, it is not so much the validity, is it, as the applicability? Does it go beyond appeal?
MR YOUNG: It is both, your Honour, but whether we need leave or not, it is not something we have turned our minds (inaudible)
McHUGH J: Perhaps you should go to the rostrum.
MR YOUNG: If the declarations concerning jurisdiction made by the Full Federal Court are to stand, then it is our submission that there is an immediate inconsistency between the Federal Court Act and the State Jurisdiction Act, moreover, there is an immediate interference by the State Act with federal judicial power. So the issue does arise immediately, on the hypothesis that our other arguments fail and the declarations made by the Full Court are to stand. Of course, no one is contending that those declarations are to stand - - -
GAUDRON J: If the declarations are to stand, and you get no further relief with the Federal Court.
MR YOUNG: No, your Honour, we would say that the validity issues arise immediately, regardless of the progress of the balance of the appeal.
GAUDRON J: They arise, do they not, only if the declarations stand and there is no 75(v) relief at the instance of Mr Jackson?
MR YOUNG: Yes. More accurately, your Honour, we would say the validity issues arise immediately. It is concluded that Mr Justice Merkel's judgment and orders were, in any respect, ineffective within the meaning of section 4 of the State Act, because that Act, in our contention, cuts in immediately there is a Federal Court order or judgment that falls within section 4 of the State Act.
GAUDRON J: But would your argument need to go any further than if those declarations are right, the only course available to the Federal Court is to set aside the orders of Justice Merkel and any law that says otherwise is inconsistent with it?
MR YOUNG: No, your Honour. That does not address the problems because, even if Mr Justice Merkel's orders are set aside on the basis that they were made without jurisdiction, the State Act cuts in and operates, we would say, inconsistently with federal law and Chapter III powers.
GAUDRON J: Even if set aside?
MR YOUNG: Yes, your Honour.
McHUGH J: But your leave application does not arise if we uphold Mr Jackson's argument, does it? If these orders of Justice Merkel were correctly made, then your application is irrelevant?
MR YOUNG: That aspect of our application.
GLEESON CJ: Correctly made in the sense of made in this jurisdiction.
MR YOUNG: Yes, and, of course, everyone is contending in a different way that Justice Merkel's orders were within jurisdiction, ASIC more broadly than Edensor and ourselves. We say they likewise were made within jurisdiction but it is simply a question of power, not want of jurisdiction.
GAUDRON J: Now, Mr Young, what worries me about your answer to me is it would seem to me that question is premature without there being some step taken. You might like to think about it before you make your submissions tomorrow because what would concern me is that the validity, on your argument, the question of validity would be premature unless and until some step were taken in the State court or - - -
MR YOUNG: We have thought about it, your Honour. We say the issue of validity has already immediately and directly arisen because there is on foot a valid and subsisting set of orders by Justice Merkel that the Full Federal Court has declared to have been made without jurisdiction. Those orders all being on foot, the State Jurisdiction Act is at this moment purporting to operate.
KIRBY J: And indeed, that was the reason given by the Federal Court for the orders they made and the form of those orders.
MR YOUNG: Yes, exactly, your Honour.
GUMMOW J: They only purport to operate if the criterion of operation is satisfied and that is a level of Justice Merkel's decision in ineffective judgment. In a way, that is one of the things we have to decide.
MR YOUNG: But we have at the moment a Full Federal Court set of declarations saying it is, in effect, not in terms, but in substance - - -
GUMMOW J: I thought that you were saying that the State Act bit at the moment of Justice Merkel's decision.
MR YOUNG: That is the effect of the Full Federal Court order. They did not set aside Justice Merkel's orders; they have, in a set of reasons and by declaration, said they were made without jurisdiction. The consequence is, on any view of things, that the State Jurisdiction Act is operating at this moment and we say there is an immediate case of invalidity to be made and it is not really a question that is contingent on the outcome of this appeal is there at the moment because of the orders that are in place.
KIRBY J: And by inference that is the very reason why the Full Federal Court did not set aside his Honour's orders because they took the view that under that Act it was "bye-bye" to the case and that they would be set aside, if anywhere, in the Victorian Court of Appeal.
MR YOUNG: Yes, we would say so, your Honour. Moreover, if they were to be set aside, there was the issue of effectively competing interlocutory applications as to the management and disposition of the $28.5 million.
GLEESON CJ: This argument arises in the context of what, an application for leave to appeal by you?
MR YOUNG: It arises in the context both of our application for leave to appeal for special leave and in the context of prerogative relief.
GLEESON CJ: In the context of your application for special leave to appeal, that is part of the submission you make in support of an argument for special leave.
MR YOUNG: Yes, your Honour. It is our contention that if there is any validity or any correctness in the orders that have been made and if, in fact, as the Full Federal Court has held, Justice Merkel's orders were made without jurisdiction, there is an immediate inconsistency that has already arisen. If your Honours please.
GLEESON CJ: Thank you. Then, subject to any response that the interveners may wish to make concerning that argument as it develops tomorrow, we notice in the written submissions that the interveners repeat a number of arguments that they have put to us in earlier cases and presumably they will not wish to repeat those orally. We will say that the next matters in the list will be taken not before 12.15 pm tomorrow, and we will adjourn until 10.15 am.
AT 4.25 PM THE MATTER WAS ADJOURNED
UNTIL WEDNESDAY, 30 AUGUST 2000
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