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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 WEDNESDAY, 30 AUGUST 2000, AT 10.22 AM
(Continued from 29/8/00)
Copyright in the High Court of Australia
MR HAYES: To start, can I go back to a couple of questions asked of me yesterday afternoon. Justice Gummow put to me a number of questions about where, in the tree, my argument was and particularly the source of jurisdiction under the Constitution. What we say to that, your Honour, to the Court, is that in the case of the Federal Court relevantly here the source of jurisdiction would be normally section 39B of the Judiciary Act 1989 . In the ACT Act, as part of the co-operative scheme by section 49(1)(d), its operation was abrogated; it was excluded by that section. When you look at the ACT Act in section 56 and you also look at the stated purpose of this being one uniform scheme appearing in all of the complimentary Acts, the apparent intention, we submit, was that the only source of jurisdiction to deal with matters under the Corporations Laws of the various States and Territories was as conferred by the legislation making up that statutory scheme.
KIRBY J: You are keeping to your distinction between jurisdiction and power?
MR HAYES: Yes, your Honour, and I want to then move on to the fact that in the questions put to me by Justice Gummow in particular, what I have to face is that the definition in section 58AA is but a definition and you have to go back to the jurisdiction-conferring provisions under the legislation making up the co-operative scheme.
KIRBY J: I just wonder if you are not getting off what at least at the moment I think is the strength of your argument, the distinction between jurisdiction and power. The Federal Court has before it - just let us assume for the moment the submission is for the purposes of the Commonwealth - has the Commonwealth therefore before it. To argue then that it does not have jurisdiction over that party is very difficult, it seems to me, virtually impossible - impossible. So that is why at least I understood your submission to be: let there be jurisdiction, but there is no relevant power to do
anything with it. There is authority over the parties but not the power to do anything with their jurisdiction.
MR HAYES: I do put the matter the way your Honour just articulated. The slight complication is that in the co-operative scheme, if it had operated fully as intended, the source of jurisdiction to deal with Corporations Law matters would have been through the co-operative legislation. Section 39B, not being intended to operate. Section 11(7) of the ASIC Act not being itself a conferral of jurisdiction. The source was the various provisions in the cooperative scheme. Reflecting that, the definition of "Court" in section 58AA, when we come to the issue of power, reflects the underlying source of the jurisdiction and explains the meaning of the expression "the jurisdiction of this jurisdiction".
What we have to face then is that, in the light of the decision in In re Wakim, there was not, as it turned out, at the time Justice Merkel made order 7, the envisaged source of jurisdiction. But we accept there was jurisdiction. That jurisdiction, apart from anything else was accrued jurisdiction by reason of there being trade practices claims, for example, under the Act before the court, and there being a common substratum of fact. But I was just wishing to deal with matters that Justice Gummow put to me that I was probably - - -
GUMMOW J: Were you saying that 39B was excluded in its operation here by something in some other Act?
MR HAYES: Yes.
GUMMOW J: What section?
MR HAYES: Section 49(1)(d), your Honour, of the ACT Act or the Corporations Act, and then you should also look at section 56(2) of the ACT Act, and then you should look at the provisions - - -
GUMMOW J: It is the federal Act, actually.
MR HAYES: Sorry, the federal Act, I am sorry.
GUMMOW J: No, it is expressed to be limited to the ACT, in some senses. Then 56 - - -
MR HAYES: Section 56(2), and to the fact that each of the State Acts are expressed in terms that this is to be a uniform scheme. Then you go to the explanatory memorandum which I would like to do now - the Solicitor-General for the Commonwealth has handed around to the parties this morning some extracts, no doubt he intends to rely upon, from the explanatory memorandum. I hope what I am about to do will not take the Court by surprise in that this was not in our list of matters to be read from but I would like to refer to some brief passages from the explanatory memorandum to the Corporations Legislation Amendment Bill of 1990. I want to draw the Court's attention to, first of all, paragraph 30 on pages 12 and 13, that:
The applied law is to have the characteristics.....for all practical purposes within each jurisdiction as if it were, a Commonwealth rather than a State -
law. Paragraph 40, which describes the jurisdiction as a federalisation of matters arising under the various Corporations Laws. Then we go to paragraph 299 relied upon in paragraph 3.14 by the Commonwealth Attorney-General's submissions and also referred to in paragraphs 21 and following of Edensor's principal submissions in matter M23.
McHUGH J: But with great respect to the Attorney, the statement in paragraph 299 is not accurate for the reason that was put to you yesterday, that frequently the jurisdiction of a Supreme Court of the State is federal jurisdiction. It is always federal jurisdiction whenever the Commonwealth or one of its entities is a party there.
MR HAYES: And the intent of this scheme, your Honour, was that there would be a uniform federalisation, as they put it, a uniform conferral of jurisdiction from the particular Act of the particular State applicable to the company in question. Taking this statement, set out in paragraph 3.14 of the Commonwealth Attorney-General's submissions, in relation to what had been proposed immediately before the relevant co-operative scheme, it would have been simply Commonwealth jurisdiction. There would have been one source of Commonwealth jurisdiction. That was what was proposed.
McHUGH J: Federal jurisdiction, I think, is the correct term. "Commonwealth" is a noun, although people frequently use it as an adjective.
MR HAYES: Accepting that, and replacing it as federal, your Honour, what is then being said is that here - and I called it a patchwork or a matrix yesterday - there are a whole series of interlocking Acts as part of a co-operative scheme between the Commonwealth, the States and the Territories, which has the effect that the definition now of "Court" will reflect the fact that it will be jurisdiction under the laws of the various States and Territories as well as, as put here, the Commonwealth, and not, as was envisaged immediately in the proposal before the co-operative scheme, simply Commonwealth or federal jurisdiction.
All of these indicate an intention that the source of jurisdiction of the Federal Court, when dealing with Companies Law matters, was through the various Companies Acts constituting the co-operative scheme. That is why, when you come to power, the definition is to "the jurisdiction of this jurisdiction". The second reference to jurisdiction - again, a question I was asked yesterday - is a reference to jurisdiction under the particular, or conferred by, the particular Companies Act or Law. You will see some support for that view in the bundle of explanatory memorandum handed up this morning by the Commonwealth Attorney-General. I do not know whether this was handed to the Court. It has been handed to the Court. I was given a bundle starting with the Corporations Act and it goes through to the explanatory memorandum to the 1994 amendment bill.
GLEESON CJ: Yes, we have a copy of that.
MR HAYES: Thank you, your Honour, and on the second-last physical page of mine there is item 21 that the:
Proposed section 58AA(1) defines the expression "court" to mean any court when exercising jurisdiction under the Corporations Law of the relevant jurisdiction.
That is, in fact, how we submit the expression "jurisdiction of this jurisdiction" is to be interpreted.
Now I am aware from reading the different decisions of this Court in Abebe that there were differences of opinion as to precisely what jurisdiction or what powers or remedies would come with a conferral of jurisdiction by legislation on the Federal Court and the majority, as indicated in the judgment of the Chief Justice and Justice McHugh at page 10 of the report in Abebe, accepted that it is possible that the legislation conferring the jurisdiction will limit the powers or the powers or remedies available within that general matter.
Some of the questions of Justice Gummow yesterday I thought might have been directed at inquiring whether or not the fact that, by reason of the Constitution Chapter III, and the fact that the Federal Court has jurisdiction in relation to Corporations Law matters, nothing else was needed to determine what powers the Federal Court had to deal with such matters.
McHUGH J: But it depends, does it not? It depends upon the legislation as to whether power and jurisdiction can be segregated. Ordinarily jurisdiction is authority to decide and power is the right to the manner or method of exercising that authority, but sometimes the two are coincidental as in Barrett v Opitz Case where the form of the legislation gave the Arbitration Commission power to make orders enforcing the rules of an organisation. Now, the statement was both a question of power, a question of jurisdiction and also, as the court held, it stated by implication rights and liabilities. So it had three aspects to it.
MR HAYES: Yes, well I accept that, your Honour. I mean, I have in mind what I have just been putting. Paragraph 27 of the judgment of the Chief Justice and your Honour in Abebe:
The power of the Parliament to make laws defining the jurisdiction of a federal court "with respect to any of the matters" mentioned in sections 75 and 76 is a power to make laws with respect to a class of things which answer a certain description. A law concerning that description brings within its scope each concrete factual situation which constitutes a "matter". But section 77(i) is not concerned with any particular case. It is concerned with the general, not the particular.
Paragraph 28:
As long as the law defining or investing jurisdiction is one "with respect to" any of the "matters", as so understood, it will be a law authorised by section 77.
And over then to paragraph 29. What I understand your Honours to be saying is, you look at the source, if it is a statutory source, of the jurisdiction and you see what it is that that statutory source has conferred on the Federal Court in terms of what it can do within that general subject matter. Now, in this case the particular Act was upheld as valid by the majority, even though it gave the Federal Court jurisdiction over a matter, but only limited power or as to only certain aspects of that general subject matter. Here the source of jurisdiction exercised by the Federal Court under the co-operative scheme is exclusively, we say, under that co-operative scheme, that is why you have the limit of power - - -
GUMMOW J: Well, can we just go back to section 49 of the ACTAct, as you called it? I do not see how it had any operation in these proceedings in the Federal Court involving the Corporations Law of Victoria. No matter raised under the Corporations Law of the Territory.
MR HAYES: No.
GUMMOW J: Nor was the court one of the ACT.
MR HAYES: No, that is absolutely right.
GUMMOW J: So section 49 is not speaking to it.
MR HAYES: That is why I took your Honours then to section 56 and to the intention that there be a uniform company scheme.
GUMMOW J: The question is whether 39B is being impliedly repealed or expressly repealed, and I cannot see how at the moment. Section 56(2) does not help you because relevantly it is invalid, or ineffective anyway, to confer jurisdiction, one view being, I think, that does not confer jurisdiction anyway. It did not purport to. It just consented to something coming from the States.
MR HAYES: I was addressing your Honour in the first instance as to what the intention of the co-operative scheme was, then I want to come to what is the effect of the partial invalidating of it.
GUMMOW J: Mr Jackson's first plank is that in this case the Federal Court, because of the position of his client as the moving party, the Federal Court was seized of jurisdiction under 39B.
MR HAYES: Yes, I accept that.
GUMMOW J: I thought you were saying 39B, in so far as it would have been such a source of jurisdiction, had been repealed.
MR HAYES: Yes, and I do submit that.
GUMMOW J: Well, how?
MR HAYES: By the inclusion of section 49(1)(d) together with section 56(2) and the co-operative scheme intending to have uniform application and the intention as taken from the explanatory memorandum that there be a uniform - - -
GUMMOW J: You have to take on board 49(2), have you not, as well?
MR HAYES: Yes, you do. Indeed, 49(2) is something which appears without the words in 49(1)(d) in all of the State Acts and when you look at it in the context of section 49, particularly 49(1), in our respectful submission, it is not talking about any other source of jurisdiction to deal with Companies Law matters. The intention of this co-operative scheme was, we submit - - -
GUMMOW J: You have to find a law of the Parliament which impliedly repeals 39B.
MR HAYES: Yes.
GUMMOW J: We will not get that by just looking at the clouds for intention.
MR HAYES: No, your Honour, you have got - - -
GUMMOW J: Intention of other legislatures as well. We have to find a law of the Parliament that expressly or impliedly repeals 39B in its operation to these proceedings in the Federal Court.
MR HAYES: You had Commonwealth legislation pursuant to a co-operative agreement between the Commonwealth and the States intending to have uniform application, intending to create its own jurisdiction in relation to corporations matters exclusively from the patchwork of legislation making up that co-operative scheme. You find that when you combine 49 with 56 with the aim of the co-operative scheme expressed in all of the legislation, you have got, in our submission, an implied repeal for Corporations Law purposes of section 39B. That is our submission. We say to the Court that the obvious and expressed intent of the co-operative scheme was it be a stand-alone source of jurisdiction to deal with Corporations Law matters across the States and Territories of the Commonwealth of Australia. It was expressed to be based upon a uniform scheme.
GLEESON CJ: What do you mean by the expression "stand-alone" in that submission?
MR HAYES: By that I mean, your Honour, the only source of jurisdiction; its own source of jurisdiction.
McHUGH J: That is because it excludes 39B in the Cross-Vesting Act.
MR HAYES: Yes, and because of the very complex myriad of cross-connecting legislation that makes up the co-operative scheme so that no matter which Companies Act 1990 it is incorporated under, each of the relevant courts has jurisdiction over it and the same jurisdiction.
It was not intended, we would submit, under this co-operative scheme that there be different types of jurisdiction, depending upon, say, whether it was the Commonwealth that was the moving party, or any other party.
I understand Mr Young will later tell the Court about the relevance of section 64 of the Judiciary Act, and I will leave that part of the argument alone. But in our submission - - -
McHUGH J: You are not going to deal with it, in fact I meant to say to you yesterday afternoon that I would like to hear from you on section 64. But if Mr Young will deal with that - - -
MR HAYES: Yes. I said to Mr Young overnight, I was very happy to hand the baton to him this morning as quickly as possible, and I do know he is going to argue for section 64 and I will adopt what he says on that particular matter, if that is convenient to the Court.
Taking up then the Chief Justice's question about the Deputy Commissioner of Taxation. The Deputy Commissioner of Taxation was very smart in making his winding up applications in the Supreme Court. As it has turned out, the court had jurisdiction there being conferral under the relevant Act making up the national grid, "the jurisdiction of the jurisdiction" meaning, in the case of an application in Victoria for the winding up of a company under the Victorian Corporations Law that authority to decide a matter arising as a result of the application of the Victorian Companies Act.
So the court had the jurisdiction of this jurisdiction, and no matter which combination of where you make the application within the State system, where physically and where the company is incorporated, the patchwork of the co-operative scheme operated successfully, and still does within the State system, to give that State court jurisdiction.
GLEESON CJ: Was the Supreme Court of Victoria exercising federal jurisdiction when it wound up the company on the application of the Commissioner of Taxation?
MR HAYES: Yes, in the sense, your Honour, that it was treated as a combination of Commonwealth and State jurisdiction or not purely Commonwealth, as that expression from the explanatory memoranda says. It was an attempt to federalise. So the intention was - this was a stand-alone source of jurisdiction. It came from a variety of sources.
GUMMOW J: Why did it not come from 39 of the Judiciary Act, not 39B just 39?
MR HAYES: Because, your Honour, the intent to repeat, our submission, I am afraid of - - -
GUMMOW J: There is no express or implied repeal of section 39 on any way.
McHUGH J: That is what I put to you yesterday, that if you go back to a case like Anderson's Case about ejectment, it turned on 39(2), not 39B.
MR HAYES: Yes, your Honour. We would still say it was subject to being impliedly abrogated to give way to the exclusive source of jurisdiction in relation company matters coming from the Corporations Law of the particular State.
McHUGH J: But 49(2) denies that proposition, does it not?
MR HAYES: What, by limiting itself to the exclusion of just 39B?
McHUGH J: Yes.
Nothing in this division affects any other jurisdiction of any court.
And "any other jurisdiction" must include 39(2) jurisdiction.
MR HAYES: Section 39B is excluded in 49.
McHUGH J: Yes, 39B is, but not 39(2).
GUMMOW J: Section 39B is not excluded in relation to anything other than Corporations Law of the ACT or the courts of the ACT. That is what it says, what paragraphs (a) and (b) say.
MR HAYES: Yes, and 56(2):
The Federal Court.....may:
(a) exercise jurisdiction.....conferred on it by a law of a State corresponding to this Division with respect to matters arising under the Corporations Law of a State.
This is the link-in between the Commonwealth Act and the various State Acts making up the intention of the - - -
GUMMOW J: An ineffective link.
MR HAYES: As has turned out, your Honour, yes. But there are two different points of tie we had to look at this. The first is what was intended when the co-operative scheme came in? The second is what is the consequence of the partial failure? I have been addressing my - - -
GUMMOW J: No, it does not operate prospectively.
MR HAYES: As it turns out, your Honour - - -
GUMMOW J: It is not a question of "as it turns out", the question is, as it always was.
MR HAYES: As has been now recognised to have always been as it was, that part of the scheme that was proposing to confer jurisdiction by State Acts on the Federal Court in relation to companies matters failed. That being so, the Federal Court has always, in those matters, exercised some kind of jurisdiction. We say, in this case, in relation to companies matters, it was accrued jurisdiction, because the only source of relevant original jurisdiction here was under the Trade Practices Act. Because, we say, in the context of this kind of application, ASIC is not the Commonwealth. Even if we were wrong about that, and ASIC is the Commonwealth, so there is yet another source of original jurisdiction in the Federal Court, it still lacks power because the only source of power is the power contained in that co-operative legislation. And the definition of 58AA is not just one way of looking at it. It is, in our submission, the only source of power. And it was predicated on the validity of the whole scheme.
So, once that part of the scheme failed, recognised in In re Wakim, then the Federal Court could not, in any view, be acting within the definition of "Court", because it would not be ever exercising the "jurisdiction of this jurisdiction". Therefore, in our respectful submission, the Full Federal Court, in this case, was absolutely correct in its first judgment. The only question would then be whether or not this is an ineffective judgment. If it is an ineffective judgment, then the matters that Mr Young is dying to tell the Court about, about validity, become very important.
GLEESON CJ: When the Supreme Court of Victoria, in the exercise of federal jurisdiction, winds up a company on the petition of the Commissioner of Taxation, the Supreme Court of Victoria is exercising "the jurisdiction of this jurisdiction".
MR HAYES: Yes, that is right, and nothing has changed after Wakim in that regard.
GLEESON CJ: Notwithstanding that it is exercising federal jurisdiction.
MR HAYES: That is the label that is put on it. It is a stand-alone set of jurisdiction and the definition, "the jurisdiction within this jurisdiction", refers to jurisdiction authority to decide of this jurisdiction conferred by the relevant Companies Act. So, the Victorian Supreme Court does have authority to decide and it is under its Act. It is if you go to the Federal Court now that there would be a real question as to whether the Deputy Commissioner could get a winding up because it would not be a "Court" in the way we put the matter.
We say, your Honour, that the provisions in the ASIC Act, 12AD and so on - sorry, the misleading conduct claims section, 12DA, et cetera - do not apply here because of the fact that this was not relevantly conduct in relation to financial services. Even if it applies, it does not alter the outcome of this matter because it is only another source of original jurisdiction which would potentially attract accrued jurisdiction in relation to the Corporations Law matters.
We have set out in writing why we say this was not an ineffective judgment. We have pointed out that Justice Merkel purported to, or stated that he exercised accrued jurisdiction. In our respectful submission, it is fundamental and obvious that the Jurisdiction of Courts Act was not directed at a situation where there was a failure of power within accrued or federal jurisdiction. Therefore, in our respectful submission, this is not an ineffective judgment and the Full Court was in error in its second set of reasons. So, in our submission, the Full Court got it right on the first occasion in its construction of the power provisions. In our respectful submission, the Federal Court got it wrong on the second occasion in, in effect, finding that this was an ineffective judgment.
There are other matters dealt with in detail in our submissions, but, unless there are particular matters - and I know Mr Young is to follow - they are our submissions.
KIRBY J: Can I ask you if, in fact, one concentrates on the record and on the orders and the orders of the Full Court that followed the second argument are wrong in the sense that there was jurisdiction in this notional sense that the Commonwealth was a party, is it necessary for this Court, in order to resolve the matter that is before it, to go on to the State Jurisdiction Act or can the Court simply confine its attention to the error that you have been asserting in the form of the declarations that were made by the Full Court of the Federal Court? If you take the view that I have suggested to you that the ASIC being present, the Commonwealth was present, and therefore there was jurisdiction, then there is a mistake in the declaration which, on one view at least, one should set aside and put it back to square one in the Federal Court.
MR HAYES: If this Court came to the conclusion that Mr Jackson was wrong and that the Full Federal Court was right in its first decision but accept our submissions that there were errors in the expression of the declarations, then we would ask that those declarations be set aside and the matter remitted back to the Federal Court to decide, which I think is what your Honour put to me as the second of the two propositions.
KIRBY J: It may be that the Federal Court would need guidance on the basis on which the orders were being set aside because, if there are two theories, that could inform such an order of this Court.
MR HAYES: The court's expression of the reasons for setting aside those declarations may well be decisive of what happens thereafter and we would hope also that the court would see the force of our arguments about the lack of any obvious legal power to make order 7 under section 737 and say something about that for the guidance of the Full Court when it went back. If the Court pleases.
GLEESON CJ: Thank you. Yes, Mr Young.
MR YOUNG: May it please the Court, we propose to commence by making a number of observations concerning section 58AA before turning to deal, firstly, with the arguments concerning jurisdiction and power and I ask the Court to go to that section. The following features, in our submission, are important both in construing section 58AA and in determining whether sections 737 and 739, when read with section 58AA, are applicable in such a way that they are capable of being picked up by section 79 of the Constitution.
GUMMOW J: The deciding point is really section 7 of the Corporations (Victoria) Act, is it not? We are talking about a Victorian statute throughout.
MR YOUNG: Yes, it is, your Honour. That applies the Corporations Law as a law of Victoria.
GUMMOW J: Yes, and then section 9 gives a bit of help with definitions.
MR YOUNG: Yes.
GUMMOW J: Then we have this enormous schedule tacked on, as it were.
MR YOUNG: Yes, your Honour, but we implicitly accept that that is the starting point, namely that the Corporations Law is applied by the Corporations (Victoria) Act as a law of Victoria. The first feature of section 58AA that we would point out is that in the definition of "Court" the words "when exercising the jurisdiction of this jurisdiction" qualify the reference to each of the courts, that is to say, "Court" means, for instance, the Supreme Court of Victoria but only when exercising the jurisdiction of the polity of Victoria.
GAUDRON J: Then you have written words in, you see, already. You have said "but only"; the words "but only" do not appear there.
MR YOUNG: Let me withdraw them for the moment, your Honour. That is ultimately the effect of our construction.
GUMMOW J: Well, I know it is, but there is an alternative construction to section 58AA which does not involve reading those words into it.
MR YOUNG: With respect, your Honour, our submission will be that there is no alternative construction that does not do violence to the words of the section, but it is a different question whether those words of limitation are of such a kind as to prevent the operation of section 79; that is a different question. But purely as a matter of construction, the words "when exercising the jurisdiction of this jurisdiction" have a clear and precise meaning which cannot be re-written.
GAUDRON J: They may have a clear and precise meaning, but the question is, at what point you bring them into play. Now, prima facie, one would think, on ordinary legal principle, this Act would say nothing about federal jurisdiction. One would think it would say nothing about it simply because Victorian laws cannot regulate what happens in the exercise of federal jurisdiction.
MR YOUNG: We agree with that, your Honour.
GAUDRON J: So, in that context, one would think what it is speaking to is only those courts when exercising State jurisdiction, leaving the work to be done by some other law or perhaps by, if there is no other law, the choice of law rules, to say what happens when a court is exercising federal jurisdiction.
MR YOUNG: Can I say, in essence, we do not disagree with your Honour's analytical framework. There will be a point though where, what we say, the real question emerges, which is whether sections 737 and 739, when the definition of court is properly construed is read into them, operates at all in relation to the powers of a Federal Court exercising federal jurisdiction.
GAUDRON J: Or the powers of the Supreme Court exercising federal jurisdiction.
MR YOUNG: Yes, we agree with that.
GAUDRON J: You have got to go - the logical consequence of your conclusion is that there is no provision picking up the Corporations Law if the matter happens to stray into federal jurisdiction, even in the Supreme Court.
MR YOUNG: No, that is not our submission, your Honour. We say there is a different outcome when one moves from the Federal Court to the Supreme Court.
GUMMOW J: Why?
MR YOUNG: In essence our argument is, and I will develop it in stages, that section 79 does not pick up sections 737 or 739 and make those laws applicable when the Federal Court is exercising federal jurisdiction in relation to the matter that was before it in this case, but if we hypothesise that the Commission had gone to the Supreme Court of Victoria, or the Deputy Commissioner of Taxation goes to the Supreme Court of Victoria, to make an application in a matter arising under the Corporations Law of Victoria, federal jurisdiction is being exercised by the Supreme Court of Victoria, section 79 cannot be picked up for the same reason, as it cannot be picked up in the context of the Federal Court, but section 64 will ensure that the rights that would prevail as between subject and subject will prevail notwithstanding that the applicant is the Commonwealth, and that is the argument that we wish to develop.
It is a very different argument than the one advanced by Mr Hayes but if I could try the Court's patience and try and develop it step by step, if I may. The first step is the proper construction of section 58AA which is to be read into 737 and 739 as laws of Victoria. The point we make about those words "when exercising the jurisdiction of this jurisdiction" is essentially this. They must be given a meaning. They must be given a meaning that accords with their plain language and that meaning is a meaning that qualifies the reference to each of the courts. So it has to be a meaning that makes sense not just for the reference to the Federal Court but for the reference to the Supreme Court of each other State, that makes sense for the reference to the Supreme Court of Victoria and for the Family Court.
Secondly, this is a general definition of "court" which is read into many, many sections in the Corporations Law of Victoria. Many of them do not mention the Commission or give any standing to the Commission expressly to make the application. Some foreclose the possibility that the Commission can be the applicant because they, for instance, give a standing to a controller, an administrator, a receiver or a liquidator to make an application. Some give standing to officers of corporations to apply for relief such as 1318 and it is not capable of applying to the Commission. Others provide for compensation to persons injured in terms which specifically exclude the Commission. Sections 1325(1) and (2) compare to subsection (3) where the Commission is bringing a representative action.
The final example is that considered by your Honour Justice Kirby in Merribee, namely an action in the High Court, an application for security for costs, and the question was whether that power was conferred on the High Court by section 1335 of the Corporations Law.
GUMMOW J: Of course it cannot be conferred on the High Court by that section. It may be picked up by section 79.
MR YOUNG: Your Honour is correct, it is a two-step process.
GUMMOW J: Yes.
MR YOUNG: I collapsed it but - - -
GUMMOW J: I know, for some perceived forensic advantage.
MR YOUNG: No, your Honour. I am conscious of the separation but the reason his Honour Justice Kirby gave in Merribee for the conclusion - - -
GUMMOW J: No submission concerning 79 was put in that case, was it?
MR YOUNG: Well, the reason Justice Kirby concluded that section 1335 conferred no power on the High Court via section 79 was that "court" was confined by the words "when exercising the jurisdiction of this jurisdiction" and those words meant "when exercising the jurisdiction of the polity of Victoria", and his Honour disagreed with an interpretation of those words that attributed a geographic limitation to them, that is to say, when exercising the jurisdiction under the Corporations Law in the geographic territory of Victoria.
But any construction of section 58AA has to accommodate the fact that the word "court" is used in these very many different applications and the simple point we seek to make is to meet a point raised by Mr Jackson, namely that the reference in sections 737 and 739 to ASIC, to the Commission, to give the Commission standing to make an application cannot be the driver for the proper construction of section 58AA, yet that is how he sought to use it.
HAYNE J: But do you accept that 737 with its diverse group of persons who may invoke it, including former members and the like, must be read with the definition from 58AA in a way that accommodates each of the cases contemplated by 737, one of which is, according to Mr Jackson's argument, the Commonwealth as the moving party?
MR YOUNG: No, your Honour, for this reason: whilst the construction must take account of the fact that the words "when exercising the jurisdiction of this jurisdiction" is a qualifier of each of the four courts, so to that extent, yes to your Honour. But as to the core of your Honour's question, no, because federal jurisdiction is addressed not by distorting or rewriting the language of the definition but by addressing the provisions of the Judiciary Act 1990 which would make a State law applicable in federal jurisdiction not by force of State law but by force of Commonwealth law in the provisions of the Judiciary Act. That is where the accommodation is reached, not by altering the definition of "court".
HAYNE J: Does your argument then proceed from the premise that 58AA is dealing with a distinction between federal and non-federal jurisdiction, or at least contemplating that distinction in its various forms of operation?
MR YOUNG: The answer is yes, it is contemplating that distinction. It specifically addresses the Federal Court, so State Parliament has turned its mind to the position of the Federal Court. It specifically addresses the position of the Supreme Court and qualifies each by the words "when exercising the jurisdiction of this jurisdiction".
HAYNE J: Does any part of that phrase address the question of the distinction between federal and non-federal jurisdiction?
MR YOUNG: If your Honour is asking me whether you read in effectively words to this effect, "either when exercising the jurisdiction of this jurisdiction or when exercising federal jurisdiction", so that is the kind of contemplation, we would say no, that is to rewrite the section. But by confining the definition of "court" to the situation when the jurisdiction of the polity of Victoria is being exercised, in picking that out there is necessarily a contemplation that what is left outside it is federal jurisdiction.
McHUGH J: But why should you do that? If you just translated all those literally, "Court" means any of the following courts when exercising the authority of courts to decide in this jurisdiction. The authority of courts to decide in this jurisdiction includes the authority to decide matters arising in federal jurisdictions. Does your argument come to this, that you could not cross-vest under the Corporations Law any matter of federal jurisdiction arising in the Supreme Court of Victoria?
MR YOUNG: No, your Honour, it does not come to that. Your Honour, in effect, reworded that phrase by more or less transforming it into a geographic limitation, "in this jurisdiction" having a geographic sense rather than "exercising the jurisdiction of the polity of Victoria".
McHUGH J: In section 9 "jurisdiction" means "a State or the Capital Territory", does it not?
MR YOUNG: Yes, and so when read in, "when exercising the jurisdiction", we would say that first reference is to a reference to the authority to determine rights, obligations, et cetera.
KIRBY J: The natural language for a geographic construction would be "when exercising jurisdiction in this jurisdiction".
MR YOUNG: Yes, your Honour. So the second reference "of this jurisdiction" does pick up the definition, that is, "the jurisdiction of the State of Victoria", "of the polity". That is the natural reading of the words.
GUMMOW J: What it is designed to do really is to make it clear that you do not go to Magistrates Courts and you do not go to the County Court, is that not what you are on about?
MR YOUNG: No, that is only part of the function - - -
GUMMOW J: Well, that is the problem, that is a constructional problem, it seems to me.
MR YOUNG: Yes, but we would say - - -
GUMMOW J: Bearing in mind what Justice Gaudron put to you.
MR YOUNG: Well, that cannot be any part of - - -
GUMMOW J: And it was a source of some irritation in some quarters, that quite trivial matters arising under this law were going to the Supreme Courts and not to the County Courts or District Courts.
MR YOUNG: The point your Honour makes addresses the difference between a "court" and a "Court". It does not address the meaning to be given to the words of limitation that precede subparagraph (a) in the "Court" definition.
HAYNE J: But you take the words "this jurisdiction" at the end of that phrase as referring to the polity.
MR YOUNG: "The jurisdiction of the polity of Victoria", which conforms to the definition of "jurisdiction" in the earlier section.
HAYNE J: Does it? That is the relevant definitions being found in section 9 of the Corporations (Victoria) Act.
MR YOUNG: No, section 9 of the Corporations Law picked up by Victorian law.
HAYNE J: Well, you start with section 9 of the Corporations (Victoria) Act, do you not, in the Corporations Law?
GUMMOW J: That is why I referred you to section 9.
HAYNE J: "`This jurisdiction'" means" Victoria.
MR YOUNG: Yes.
HAYNE J: And you go from there perhaps to section 9, the dictionary, and you find some geographic expansion, you are out into the coastal sea - a matter of considerable importance, no doubt.
MR YOUNG: But none of that alters, your Honour, the meaning in the context of "the jurisdiction of this jurisdiction".
McHUGH J: Yes, but what is "jurisdiction"? Obviously, "jurisdiction" when it is first used in that phrase is not referring to a geographical location.
MR YOUNG: No, it is not.
McHUGH J: It is not. What is the natural meaning of "jurisdiction"? It refers to the authority of courts to decide. So, why does it not mean, "when exercising the authority of courts to decide of Victoria"?
MR YOUNG: Yes, that is as we read it, your Honour. "When exercising the authority to decide of courts of Victoria".
McHUGH J: Yes, why does that include "that is arising in federal jurisdiction"?
HAYNE J: And that is, the section is wholly silent on matters of division between federal and State jurisdiction. It is simply talking about matters arising under the Corporations Law of Victoria, not matters arising under the Corporations Law of New South Wales.
MR YOUNG: Yes, but "the jurisdiction of this jurisdiction", the authority to decide "of the courts of Victoria" in its natural meaning - - -
McHUGH J: But that includes law, equity, federal jurisdiction, State jurisdiction, it might even include non-judicial jurisdiction.
MR YOUNG: That is the reading of it. Then the effect of 737 and 739 is to confer judicial power on the Federal Court, which was never the intention, and that would remain. Those words are still there. The effect of Wakim, we would say, is to put a blue pencil through the reference to the Federal Court and the reference to the Family Court. But the words "when exercising - - -
GAUDRON J: So be it. That does not advance you either, because let us say that the Federal Court and Family Court go out, but there is a matter within federal jurisdiction, what would prevent section 79 operating? I do not think anything would.
MR YOUNG: Section 79 only operates to pick up a State law, if it is applicable, and the qualification - - -
GAUDRON J: One says that, but I wonder whether, in the light of what has been said in Pfeiffer, for example, one should not see section 9 as specifying governing laws, generally, which would be picked up in exactly the same way as a substantive law would be by a choice of law rule.
HAYNE J: If the result that the forum reference, or the location reference in 79, where the Federal Court is sitting, may take you off into choice of law questions. It may or may not. I do not know.
McHUGH J: It is very close to it, it seems to me, and if 79 is just read literally it would not have too much operation.
MR YOUNG: No, your Honour.
McHUGH J: Robertson's Case makes plain, you have to do a bit of surgery on it. Prima facie, all laws apply, one might think, unless there is something so specific about it that it cannot apply.
MR YOUNG: Robertson and Pedersen and the other cases dealing with that qualification all recognise that it is a qualification of a very limited nature, and it has never been taken beyond saying that general or generic references to "a court" which, in context, would be construed as the Supreme Court of Victoria, for example, should not be regarded as preventing the operation of section 79.
McHUGH J: I know. But you throw the whole weight of your argument on the term "court" in sections 737 and 739. Maybe the weight of the argument should be thrown on the substance of the section, bearing in mind that it is just a reference to a court in that particular jurisdiction. What 79 is picking up is the substantive rights.
MR YOUNG: But, your Honour, if it simply meant the court in each jurisdiction of Australia, the definition would have read very differently. It simply would have listed the Federal Court, the Supreme Court of each other State, the Supreme Court of this State, the Family Court of Australia, et cetera.
GUMMOW J: No, no. You keep turning it upside down, Mr Young.
MR YOUNG: Well, with respect, we do not agree to that, your Honour, nor do we understand which way your Honour says should be upright.
McHUGH J: But you start with the proposition that you are in federal jurisdiction when you are in the Federal Court and the question arises, is there some non-federal matter which can be brought across under the accrued jurisdiction or whether it can be brought across under 79 or perhaps 64.
MR YOUNG: Yes, that is right, your Honour, and each of them brings things across in a different way. Accrued jurisdiction brings the authority to decide, but not of itself, the content of the law. You then need to look to State statute or common law for the content of the law and for the remedy. Likewise with section 79. It brings things across according to its own terms only if they are otherwise applicable in the situation and section 64 operates differently because it has no such qualifier in section 79. It operates to secure the position that the rights of the parties in a suit involving the Commonwealth are the same as in a suit between subject and subject, so they operate differently. They can have different consequences and we say they do in this case. The weight of the whole argument against this construction is that, in effect, ASIC or the Commissioner of Taxation have nowhere to turn if the words of the definition are given the meaning that the Full Court gave them. We say those are wrong because it simply misunderstands the operation of sections 79 and 64, accepting that it is federal jurisdiction.
Can I just go back and make a few other points about section 58AA. Your Honour Justice McHugh asked about the function of subsection (3). It seems to us to have this significance. First it is a recognition the jurisdiction is not conferred by the definition of "court" operating in conjunction with sections such as 737 and 739. Jurisdiction, it is pointed out by way of explanatory note, first of all, that jurisdiction is conferred otherwise by other Acts.
That point that the definition of "court" read with other sections of the Corporations Law is not dealing with jurisdiction and not purporting to confer jurisdiction is confirmed when one turns to 737. Its opening words are:
Where a person has acquired shares in a company in contravention of section 615, the Court.....may make -
certain orders. So plainly there is a matter, a broader matter involving a contravention, and all that 737 is doing is giving the court a power of relief in circumstances where a contravention has been established and likewise section 739. So quite clearly 737 and 739 and the definition of "court" are not dealing with the conferral of jurisdiction. They are dealing with making available a power to a court which otherwise has jurisdiction. There is nothing unusual in that. Section 22 of the Federal Court Act does exactly that. See Philip Morris.
Section 58AA(4) perhaps explains why we have that explanatory note in subsection (3). It seems to us the point of including the reference in subsection (3) in terms of noting that jurisdiction is dealt with in certain Acts is a precursor to subsection (4), namely to say the matters dealt with in those Acts that actually confer jurisdiction include their own limits on jurisdictional competence.
HAYNE J: All this is done in pursuance of the general chatty nature of the Act which is revealed by section 7 of the Law, that you will find most of the provisions here, there are some relevant there and some are found elsewhere. You have lots of circles and arrows and diagrams pointing you to where to look.
MR YOUNG: Yes, but I was making a simple point that the purpose of subsection (3) is connected to subsection (4) which is to confirm or stress that the definition of "court" is not dealing with the conferral of jurisdiction.
GUMMOW J: But the only conferral of jurisdiction is in section 42 of the State Act, is it not?
MR YOUNG: No. That is civil jurisdiction.
GUMMOW J: Yes.
MR YOUNG: Criminal jurisdiction is conferred by section 53 of the State Act.
GUMMOW J: Yes. I know but we are talking about civil jurisdiction. The only conferral of civil jurisdiction here is in 42 and the only conferral of any jurisdiction is under the State Act.
MR YOUNG: No.
GUMMOW J: Where else?
MR YOUNG: The Commonwealth ASIC Act confers jurisdiction in relation to administrative review.
GUMMOW J: Yes, but in this case the sections - - -
MR YOUNG: Relevantly to this case, but I thought your Honour was dealing with the general position.
GUMMOW J: Yes, this case.
MR YOUNG: In this case, relevantly, the source of jurisdiction is the Corporations (Victoria) Act.
GUMMOW J: Section 58AA is not a conferral of jurisdiction provision.
MR YOUNG: Yes, that is so. That, in a sense, makes part of the point we make, the distinction between jurisdiction and power. But in this context it leads, perhaps indirectly, to this proposition, which is to address what your Honour Justice Gaudron put to me. Recognition of the fact that the words "when exercising the jurisdiction of this jurisdiction" are not addressing federal jurisdiction does not really lead anywhere. That does not give a different consequence to the definition of "court" than it would otherwise have as a definition. It is simply a recognition of the fact that those words are addressing the jurisdiction of the State of Victoria conferred by these other Acts.
GAUDRON J: Yes, I know, but I am still not entirely sure that one is asking the right question for the purposes of section 79 of the Judiciary Act 1990 . I am not sure that one should not be asking, "Does 58AA manifest an intention that `court' does not mean any of those courts when they are exercising federal jurisdiction?". That is to say, you have to take a negative implication, it seems to me, to exclude section 79, which is hard to draw if you accept the framework that the Act does not, for the very simple reason that it could not, address itself to federal jurisdiction.
MR YOUNG: Yes, but that still leaves unaddressed the definition and the words "when exercising the jurisdiction of this jurisdiction" because, when you read the definition for section 737, the relevant power to make the orders is only given to the Federal Court "when exercising the jurisdiction of this jurisdiction". Now, that has been held - - -
GAUDRON J: Again, if you are picking up the power of a State Supreme Court to grant an injunction, for example, for breach of a statutory duty, let us say, which happened to get involved in it, you would normally read "Supreme Court" as meaning "Supreme Court when exercising the jurisdiction conferred on it by the laws of this State", would you not? But you would still pick that up and you would do that because, invariably, your Interpretation Acts say that is what - - -
MR YOUNG: Yes, but when we take our case of the Federal Court, hearing a matter involving trade practices and allegations of contravention of section 615, and it gets to the remedy stage and it asks what remedies are available and it turns to 737, on no view of the definition can it really be said that the Federal Court qualifies as a Federal Court when exercising the jurisdiction of the courts of Victoria or of the State of Victoria, it matters not, because the Federal Court is never exercising the jurisdiction of the State of Victoria or of the polity of Victoria or of the courts of Victoria. So, to answer your Honour Justice McHugh, that reading, when read into "court", does not produce any different outcome when one turns to section 737.
The Federal Court is simply not relevantly exercising the jurisdiction of Victoria or the courts of Victoria or anything like it; it is exercising federal jurisdiction conferred on it by the laws made by the Commonwealth Parliament and that is the end of the matter. So therefore we would say, on no construction of 58AA is 737 or 739 applicable and, that being so, they are not relevantly powers that the Federal Court has in the exercise of its federal jurisdiction. That is, we would say, the clear intention of the State Parliament.
KIRBY J: Well, its intention was to operate in a milieu before Re Wakim.
MR YOUNG: Yes, your Honour. It was intended to affect a result that was efficacious for the cross-vesting scheme.
KIRBY J: You cannot, surely, be blind to that fact.
MR YOUNG: You cannot, we say it is significant.
KIRBY J: This is how it was intended to operate; it is just that it cannot now operate that way.
MR YOUNG: They are, at the end of the day, and there is no getting away - - -
GAUDRON J: But, on your argument, it would not have operated pre-Wakim, would it?
MR YOUNG: It would not have operated pre-Wakim if you make the assumption that the State court cannot confer the jurisdiction of the State of Victoria - - -
GAUDRON J: No, let us leave aside that. Let us assume pre-Wakim, ASIC bringing proceedings, admittedly within jurisdiction, in the Federal Court seeking relief in addition under the Corporations Law of Victoria. On your argument, pre-Wakim, section 79 would not have picked up the relevant section, because the Federal Court, even then, because it already had jurisdiction in the matter, would not have been exercising the jurisdiction of this jurisdiction, within the meaning of the definition.
MR YOUNG: That is so, your Honour.
GAUDRON J: Yes. So your argument has nothing to do with Wakim really?
MR YOUNG: No, that is not entirely so, your Honour, because that the terms in which jurisdiction is purportedly conferred on the Federal Court by section 42 of the Victorian Act is this: jurisdiction is conferred on the Federal Court with respect to civil matters arising under the Corporations Law of Victoria. So, to pick up Justice Kirby's point, the premise of section 58AA and of section 42 is that jurisdiction can be conferred on the Federal Court directly by the Parliament of Victoria and, moreover, the premise would seem to be that judicial power as well as jurisdiction can be conferred on the Federal Court by the Parliament of the State of Victoria. Now, that is wrong, but that was the assumption under which it was apprehended that the Federal Court, in a case such as this, would be able to make orders of the kind described in section 737 and 739.
GAUDRON J: Well let us assume that had been held valid. Why would the Federal Court have power under 737 in a matter such as this?
MR YOUNG: If that were held to be valid?
GAUDRON J: Your argument would still have to be, would it not, no power?
MR YOUNG: Correctly, yes, because we would say when you have accrued jurisdiction, the Federal Court is exercising federal jurisdiction to the exclusion of any State jurisdiction and so your Honour is right. But that is only to indicate that the draftspeople of the scheme misunderstood, not just one principle of constitutional law but, perhaps, a second principle as well. That is to say that when Corporations Law jurisdiction is conferred by the State of Victoria on the Federal Court, it somehow remains a discrete area of jurisdiction that the Federal Court is exercising, regardless of what other jurisdiction it is exercising. But that, too, is apparently - I do not mean apparently but it is perceivably the premise on which these sections proceed. That is to say, the Federal Court, no matter what other jurisdiction it is holding and exercising, it will be discretely at the same time exercising jurisdiction conferred by the various States under the cross-vesting legislation.
GLEESON CJ: Does it not at least follow from what you say that it misrepresents the position to suggest that this is a problem that arises out of the decision of Re Wakim?
MR YOUNG: It does, your Honour. Certainly, that is not a complete statement of the problem. It is a partial statement of the problem.
KIRBY J: You just say that they have made two mistakes. One, the one revealed by Re Wakim; and two, the one of the face of the definition of "Court".
MR YOUNG: Yes.
KIRBY J: But it still has the mistake of Re Wakim written all over it, because - - -
MR YOUNG: It permeates the whole thing, we would say, your Honour.
GUMMOW J: Why? How does it permeate it, apart from giving it some forensic colour?
MR YOUNG: Because the premise of section 42 of the Victorian Act is that the Federal Court - - -
GUMMOW J: Given the answer you just gave to Justice Gaudron, how it does not seem to follow.
MR YOUNG: It permeates it because the premise is that the Federal Court is able to have conferred upon it a discrete area of State jurisdiction which, no matter what else it is dong, it will, when it is dealing with matters under the Corporations Law, be exercising the jurisdiction of the polity or the courts of Victoria.
GLEESON CJ: You would be running exactly the same argument if Re Wakim had gone the other way.
GUMMOW J: I thought you agreed with that.
GAUDRON J: Yes, you have told me that twice.
HAYNE J: The third time of asking.
MR YOUNG: It was exactly the same argument, but in large measure, yes, your Honour.
GUMMOW J: More forensic colour.
HAYNE J: I think you have just consulted the vendor on the third time of asking, Mr Young.
MR YOUNG: But whatever the sources of the error, we say that those words of limitation, and they are intended to be words of limitation, cannot be disregarded. The Commission's argument was one in which they advanced no meaning of the limiting phrase. The burden of their argument was simply, "Disregard it because it ought not to be allowed to deprive the Federal Court of the power to make these orders, because otherwise ASIC would have nowhere to go."
Now, can I turn to ASIC's arguments and address what seem to us to be their dual aspect? My learned friend, Mr Jackson, really seemed to shift between two forms of the argument. The first was what might be called the more extreme form, namely that because federal jurisdiction inheres in the Federal Court in this matter, either because of accrued jurisdiction or 39B(1A)(a) or 39B(1A)(c), it matters not which, but because federal jurisdiction inheres in the Federal Court then it follows, without recourse to sections 79 or 64 or anything else, that the Federal Court can exercise all necessary powers and nothing can stand in its way.
GUMMOW J: Well, what do you mean nothing can stand in its way? More frenzied colour, some sort of wicked juggernaut rampaging the countryside.
MR YOUNG: The second form in which the argument was advanced is the one I just articulated, namely that as sections 737 and 739 give standing to the Commission, the reference to the court must be construed so as to empower the Federal Court to make orders on ASIC's application.
Can I deal with each of those arguments taking the first argument? I am really endeavouring to address questions and issues that were debated with Mr Jackson, for instance, the point made by Justice McHugh and Justice Hayne that jurisdiction is something quite distinct from a law to be applied and the remedies to be granted. I think your Honour Justice Hayne expressed it by referring to jurisdiction in the sense of authority to decide is one thing; what can be done in exercising jurisdiction is another.
McHUGH J: But take the illustration I gave early this morning from Barrett v Opitz 70 CLR. I mean there everything was framed in terms of the power. The Arbitration Commission, which was understood to be a court in those days, may direct the performance of the rules of the union. Full stop. That was it.
MR YOUNG: I do not mean to quarrel with that proposition, your Honour. Jurisdiction can be conferred in a way where there is no real segregation between jurisdiction and power. But that is not this case. Jurisdiction is conferred in relation to trade practices allegations by the Trade Practices Act and, if it is relevant, section 12DA of the ASIC Act.
An accrued jurisdiction arises in relation to the contravention issues because they arise out of a common substratum. But that is jurisdiction in the sense of authority to decide those issues. What substantive law is to be applied, what restrictions and limitations on rights exist under that law, what issues of standing arise and what orders may be made then is the matter that needs to be addressed once jurisdiction in the sense of authority is attracted.
McHUGH J: I know, but your argument seems to accept that breach of section 615 was part of the jurisdiction of the Federal Court. But you seem to want to hive off the 737, 739.
MR YOUNG: For the reason, your Honour, that the power to make those orders - those orders are set out in the Victorian statute. The Victorian statute says that the power to make those orders is confined to a court when exercising the jurisdiction of the State of Victoria or of courts of Victoria.
GAUDRON J: Or it says that when a court is exercising the jurisdiction of Victoria it has power to make those orders.
GLEESON CJ: The word "confined" as an ambiguity in it when it comes to its relationship to section 79.
MR YOUNG: Yes, but we would say only that identified in Robertson. The question ultimately becomes whether the terms in which the State statute is expressed as properly construed, are such that you can say it is applicable in the section 79 sense or not.
GLEESON CJ: That is the importance of your addition of "but only".
MR YOUNG: Yes, that is so your Honour.
McHUGH J: Take a section like the NSW Testators Family Maintenance Act, now called the Family Provisions Act, which gives the Supreme Court jurisdiction in respect of certain estates. Why cannot that jurisdiction be picked up by section 79?
MR YOUNG: I know section 79 was not addressed in Smith v Smith, but the reasons for saying it cannot be picked up are really the reasons given in Smith v Smith. Smith v Smith made the express assumption that let us assume that the application under the Family Provision Act did fall within the accrued jurisdiction of the Family Court. Having made that assumption, they said, "Nonetheless, the Family Court does not thereby gain power to make orders under the State Family Provision Act".
The reason was that the subject matter and the terms in which the State statute was expressed made it clear that that was not a power to be exercised by the Family Court, even a Family Court assumedly exercising accrued jurisdiction over an area that embraced the issues raised by the Family Provision Act. There are two passages in Smith v Smith [1986] HCA 36; 161 CLR 217that I could quickly take the Court to, if I may. The first is at the foot of page 237, four lines from the bottom:
If, however, contrary to our opinion, it be assumed that the two issues form part of a single justiciable controversy, of which the approval of the agreement forms an integral part, it does not follow that the Parliament has given the Family Court jurisdiction to resolve the whole of that controversy.
The other passage is at 240, first complete paragraph. That is in the joint judgment of Chief Justice Gibbs and Justices Wilson and Dawson. Further, there is a passage at page 251 which Mr Jackson read in the middle of the page. That, again, makes the assumption that
if the Family Court assumed an accrued jurisdiction to make an order under section 31.....the order would none the less not be an order of the Supreme Court.
Et cetera. So, the wide argument - - -
McHUGH J: But that was obviously because the Justices took a particular view of the nature of that power of approval.
MR YOUNG: That is so, your Honour, but the point I make, and it is made in Robertson and Pedersen and other section 79 cases, is that whether the law is applicable depends upon the terms of the State law and its subject matter. We contend here that the terms in which this power is conferred makes it plain that it is not exercisable by the Federal Court - - -
McHUGH J: I know, and that is why I said to you, you throw all the weight of your argument on the term "court" by reference to 58AA, but 58A is definitional and identifies the courts that can exercise this substantive power. But the thrust of 615, 737, 739, is on the substantive liability, not on the court. True it is, it is the Supreme Court of Victoria that has the power, but the critical thing is the substantive rights and liabilities which are created by sections 615, 737, 739, as opposed, as in Smith, where the Court took the view that it was the authority of the Supreme Court of New South Wales which was the critical factor in the law there involved.
MR YOUNG: Yes. But, your Honour, it is not as if order 7 was the only order made. It is not as if it was the only order sought. It is not as if other remedies were not available to the Federal Court in the exercise of its federal jurisdiction. The question is whether this particular remedy to make these far reaching orders in the nature of order 7, if it can only be sourced, as the Full Court said, in 737 and 739, is that power available; is it picked up by section 79, having regard to the limited terms in which the availability of that power has been expressed by State Parliament? That, in our respectful submission, is the issue and there is really no broad argument that is, at the end of the day, sustainable. If it were, Smith v Smith would be wrongly decided.
HAYNE J: What do you say were the orders that were available, or the relief that the Federal Court could have ordered?
MR YOUNG: Your Honour, they could, as they did, grant declarations and make injunctive orders.
HAYNE J: A mandatory order directing one of the parties to do something as, for example, to pay money?
MR YOUNG: Not in the nature of this order. We would say that the powers of the Federal Court fall short of this, your Honour. This is directing Edensor to pay an amount of money to shareholders who have declined to annul their contracts with the offeror under the takeover. But we start to get into the merits that are still before the Full Federal Court and have not been resolved.
HAYNE J: Just so, and trying to leave, if we can, those merits to one side, can I just understand what kind of order you say the Federal Court could legitimately have made? Could it have made a mandatory injunction?
MR YOUNG: We would say, yes, but you need then to ascertain what sort of injunction qualifies within that term because, of course, the Federal Court Act operated, sections 21 to 23 were available to the Federal Court, and there were a range of remedies that could have been given. They may have extended to avoidance of the contracts for the acquisition of shares from the offerees.
HAYNE J: At the moment what strikes me as the feature of the order to which attention might first be drawn is that it is an order in favour of people other than parties.
MR YOUNG: It certainly is that, your Honour, in circumstances where there are provisions of the Act dealing with precisely that situation that would limit the powers of ASIC.
HAYNE J: I understand that.
MR YOUNG: Can I give another example which is the Thomas v Ducret Case [1984] HCA 12; 153 CLR 506. I do not think the Court has it, but let me explain what the issue was. To explain the facts briefly, it is a case in which the Federal Court made an order that a person convicted of trade practices offences should pay a fine and, in default of such fine, should be in prison for six months. The only power to imprison in default of payment that was arguably capable of being attracted to the Federal Court was section 106(1) of the Magistrates (Summary Proceedings) Act of Victoria - it is the second paragraph of the headnote the Court will see that identified - and the argument proceeded not by reference to section 79 but by reference to its analogue in the Commonwealth Crimes Act, but relevantly it was treated as to the same effect.
The High Court held that section 106 of the Magistrates (Summary Proceedings) Act was not applicable and could not be picked up and applied to the Federal Court exercising federal jurisdiction. The relevant holding, after extensive quotations from Robertson's Case about section 79, is in the last paragraph at page 511 and the first paragraph at the top of page 512.
So again, if limitations in State statutes which this time confer that power to imprison in default to a Magistrates' Court are to be disregarded for the purposes of section 79 or its Crimes Act analogue, the result of this case would have been the opposite of that which in fact was held. The nature of the subject - - -
KIRBY J: You get to a point when you are not picking up the State law and applying it but are, in a sense, making a new law, a different law.
MR YOUNG: Yes, your Honour.
KIRBY J: Now, where has that point been best described in the authorities?
MR YOUNG: I think it is best described in Robertson, your Honour.
KIRBY J: Well, what is the essence of it?
MR YOUNG: The essence of it is this, that some State statutes, but not others, may be expressed in terms that make it impossible for them to be picked up by section 79. A generic reference to "court" which, in context, means Supreme Court - - -
KIRBY J: That does not apply here, because of the juxtaposition, you say?
MR YOUNG: - - -is not a barrier, because of the Pedersen/Robertson qualification, but, if the subject matter or the terms of the law are expressed in such a way as to make it inapplicable, for instance, a limitation period in the South Australian Statute of Limitations that was considered in John Robertson as not applying to a treble damages claim instituted in the High Court. If it is in terms inapplicable, while section 79 affords no warrant for rewriting the law to make it applicable or ignoring restrictions of that substantive kind in the State law, effect must be given to it exactly as in Thomas v Ducret, where the High Court said State law limits this power to Magistrates, it was not intended to be conferred in such a way that it is picked up and applicable to a Federal Court.
KIRBY J: Now why, putting the blue pencil through Federal Court and Family Court following Re Wakim, can one not pick up 58AA and simply say remove those from the contemplation, that now you have the Supreme Court with power and therefore we will apply this to the Federal Court within its jurisdiction?
MR YOUNG: Well, the reason we would say is this: the limiting phrase was intended to limit which courts qualified as Courts. It was not confined to the Federal Court. It went to all the various superior courts and if the natural meaning of those deliberately limiting words is "when exercising the jurisdiction" of the polity of Victoria or of the courts of Victoria, then that is its proper construction. When that construction is read into 737 and 739 those sections on their face are inapplicable to a Federal Court exercising federal jurisdiction on ASIC's application.
GLEESON CJ: The limiting words are in the paragraphs, (a), (b), (c) and (d). Why do you treat the words "when exercising" as limiting rather than as being exigetical?
MR YOUNG: Because, your Honour, it must always have been in the cognisance of Parliament that the Federal Court would have another jurisdiction, namely federal jurisdiction. It must always have been in the cognisance of the State Parliament that the Supreme Court of Victoria or of other States would, from time to time, be invested by section 39(2) with federal jurisdiction. So they have turned their mind to the position of each of the States. They have turned their mind to the Federal Court but they have singled out "when exercising the jurisdiction" of the polity of Victoria and that is why we say they are limiting words.
GAUDRON J: Or perhaps they are words just describing the limit of their legislative power, words which would be read in, in any event.
MR YOUNG: No. Well, your Honour, that might have some semblance of support by reference to the Federal Court but not when those words are applied to the Supreme Court itself or to the Supreme Courts of other States, as they are.
GAUDRON J: Well, where would it get legislative power to talk about the Supreme Courts of other States?
MR YOUNG: That part of the cross-vesting scheme has not been struck down. It was part of the cross-vesting scheme that one State - - -
GAUDRON J: That is right, but they could legislate, I dare say, with respect to the Supreme Courts of the other States exercising the jurisdiction of Victoria conferred by whatever it was that conferred it.
MR YOUNG: Yes, but the intention of this Act, your Honour, is that "when exercising the jurisdiction of this jurisdiction" should have real bite as words of limitation.
GAUDRON J: Well that is the question.
MR YOUNG: So that when the Supreme Court of the State of New South Wales dealt with a company law matter it would be exercising the jurisdiction of New South Wales under the New South Wales Corporations Law but there might be circumstances in which it would, in addition, be exercising jurisdiction conferred upon it by Victoria and that is when this Act and those words would bite, instil themselves into 737 and 739 so that the reference to the "court" in that context included the Supreme Court of New South Wales, both when exercising its own jurisdiction and when exercising jurisdiction conferred upon it by the State of Victoria, because it has complementary pieces of legislation in exactly the same terms, 737 in each. One of them says New South Wales Supreme Court when exercising the jurisdiction of the polity of New South Wales complemented by identical Victorian Act.
McHUGH J: But you want to read both 79 and 58AA very, very literally but, at least so far as 79 is concerned, why should we not treat it as stating a principle rather than something to be parsed and analysed? After all, section 79 is derived from a combination of Chapter III and 51(xxxix) of the Constitution. I have always thought that if those sections were not there, it would never have affected the jurisdiction of this Court to deal exactly in accordance with sections 79 and 80. Indeed, I am not sure that they should be regarded as exhausting the content of the jurisdiction of Federal Courts to deal with associated matters.
MR YOUNG: Your Honour, the jurisprudence on section 79 starts with a proposition that section 79 merely picks up State laws with their meaning unchanged. That is the starting point in all of the cases.
KIRBY J: I suppose there is a point where you have to be careful that you are not going beyond the judicial power that if legislatures do something, that is their business, and picking it up and applying it, that can be done either under the Constitution or by the Judiciary Act. But to the extent that you are redesigning the law, there will be a point at which it has passed beyond the judicial power into effectively making a new legislative imprint.
MR YOUNG: Yes, that is so.
KIRBY J: The problem that I have is knowing where that point is reached because, once you exceed that, you have really gone beyond the judicial mandate.
MR YOUNG: Yes.
McHUGH J: It is like codifying the law. Principles are flexible and they can be applied and their content can grow over a period of time but, once you codify something, you tend to make it very rigid. I am not sure that we should not look at 79 as stating a principle rather than rigidly - - -
MR YOUNG: Your Honour, section 79 is an ordinary Act of the Commonwealth Parliament, just like - - -
McHUGH J: But so are Limitation Acts. In one of the judgments Sir Owen Dixon said in these Limitation Acts giving special protection to public authorities, although they change and their language differs, one ought to treat them as in effect to be determined in accordance with the principles rather than the literal terms of - - -
MR YOUNG: But can I add one thing to it, your Honour. Section 79 has never been regarded as applying State laws so as to bind the Commonwealth. That work has been done by section 64. So immediately, in addressing the closing words of section 79, the question arises: does this law bind the Commonwealth if one of the parties is the Commonwealth? The answer that has been given is: section 79 does not do that work. It does not make a finding on the Commonwealth because it is of the essence of State laws that they are not read so as to bind the Commonwealth directly. Hence limitation periods and so forth have not been read as binding the Commonwealth and not been read as extending to actions in the High Court of Australia out of State legislation.
So, immediately, there is recognition of the need for the fact that section 79 could be amended by Parliament to be broader than it does, but as it is, it picks up State laws unchanged, and if they are applicable on their proper construction, it applies them. But it does no more than do that. It does not attempt to work any violence to limitations or restrictions on the availability of remedies that State courts have enacted.
KIRBY J: Is it relevant to take into account at this point of decision the fact that there would have been nothing to stop the federal Parliament enacting a law empowering the Commission, out of federal power, to take action against constitutional corporations to do exactly what, by this roundabout method, is being suggested, despite the court and Court, that the state legislation via section 79 is empowering the Commission to do?
MR YOUNG: It is relevant, we would say, because you do not search into section 79 for some underlying principle that would alter effectively the accepted meaning of that expression to date. If there is an underlying principle, the power lies in the federal Parliament to change the Judiciary Act to give section 79 a reach, which would pick up State laws - - -
McHUGH J: I know you say that, but it is not for today. The day may come when one has to consider whether or not the Parliament can confine the power of the Federal Courts to deal with matters that arise under Chapter III of the Constitution. I know Sir Garfield Barwick said it, and three Judges of this Court approved in one of the cases that the accrued jurisdiction is discretionary. At the moment, I am afraid I do not accept that and, indeed - - -
MR YOUNG: That was doubted in Wakim by Justices Gummow and Hayne.
McHUGH J: Not only do I have doubts about it, but I have serious doubts whether the Parliament could prevent the court from fully dealing with a matter in so far as it is before it.
MR YOUNG: Yes, but we would say that is not this case, because this is not the federal Parliament attempting to intrude upon - - -
GUMMOW J: It might have been though, if the Federal Court had been sitting in New South Wales. Section 79 would not then have operated relevantly. It would have picked up the New South Wales Corporations Law, and this company is not a company for that purpose.
MR YOUNG: I have not investigated those details but, relevantly, that is not this case and the provisions we are concerned with, I think, are identical in the New South Wales Corporations Law and this Law.
GUMMOW J: No, but the New South Wales Corporations Law would not attach to this particular corporation, would it not?
MR YOUNG: It would.
GUMMOW J: Would not. It is not incorporated in New South Wales.
MR YOUNG: No.
McHUGH J: The reason I say these things - I mean, I took the view that the Constitution required us to reach the result we did in Wakim and my judgment makes it plain. I was not very happy with the results we reached in that particular case. But why should we read language narrowly here to do something that makes the system work?
MR YOUNG: Well, your Honour, that should not be done if what it involves is rewriting the State law so as to eliminate a limitation which State Parliament intended. Can I contrast it with Abebe? This Court, by a majority decision in Abebe, said that Part 8 of the Migration Act, which restricted grounds of review in migration matters very narrowly, and much more narrowly than one would normally expect in the context of judicial power of review, was nonetheless valid, even though it constrained the matter much narrower than it would be regarded, effectively, as a matter for determination. Now, that was the majority view.
Now, if federal Parliament can restrict grounds of review in the Migration Act in that way, validly, all that is happening here is that State Parliament has restricted the availability of remedies and sought from its courts, in terms, which means that that restriction has a particular impact on the Federal Court when it is read into the definition of "court" - - -
GAUDRON J: And on the State court when exercising federal jurisdiction?
MR YOUNG: Yes.
GAUDRON J: So your argument is - - -
MR YOUNG: I will come to that in a moment if I can, your Honour.
GAUDRON J: - - - except for 64, yes.
MR YOUNG: Yes, I will come to that in a moment. But just to complete what I was saying, that what you have in contrast with Abebe is, rather than federal Parliament operating directly to limit remedies or rights of review, it is here operating through section 79 which then picks up the State law and furnishes the State law, but only if it can, only if that law is otherwise applicable, and so, it is just like Abebe. It may be that the matter involves the Federal Court having more restricted remedies than would otherwise be the case. But federal Parliament has simply enacted, through section 79, a proposition that if State law applies certain limitations and we pick up the law as we find it, those limitations will operate to restrict the powers of the Federal Court and that is by force of federal enactment, not by force of State laws limiting federal powers, it is by force of federal enactment, and that is the Abebe situation.
McHUGH J: Yes, but the distinction is that Abebe holds the Parliament can define what matters can come before particular federal courts. But once a matter - the court does have a matter before it, then to what extent can the Parliament confine a Federal Court's power to deal with that matter and what is necessarily associated with it?
MR YOUNG: Well, as I would understand Abebe, the federal Parliament can constrain the powers of the Federal Court in that regard.
HAYNE J: But the central premise for your argument is, is it not, that the words of 58AA are words of limitation, not words of recognition. What I mean by "words of recognition" is that the words are added to acknowledge the fact that by section 42 there is a conferral of jurisdiction on the courts of other States and the additional words in 58AA are words to recognise the consequences that will follow from the conferral of jurisdiction on the courts of other States. You must say, must you not, that they are not of that kind, they are words of limitation?
MR YOUNG: Well, we do say that, your Honour, but we also say it does not matter that you treat them as words of recognition. The words are there. They must be given a meaning and when given a meaning they cannot be given a meaning that allows 737 to be read in such a way that "court" includes Federal Court. As a matter of construction we would say it cannot legitimately be done. It is a separate question whether section 79 has a more expansive operation than has hitherto been thought to be the case so as to allow that intention to be effectuated through a wide reading of the closing words of section 79.
Can I give the Court a reference to New South Wales submissions, paragraph 6. Paragraph 6 and following deal with the operation of section 79. In paragraph 6 New South Wales advances three categories of laws upon which section 79 might operate. Firstly:
State laws which are expressed.....to apply to courts other than courts "in and of" the State;
(b) State laws which are expressed in general terms apt to apply to all courts without restriction; and
(c) State laws whose operation is expressly confined to a particular State court or courts.
Now, in our submission, contrary to what New South Wales goes on to submit, it is plainly not the first case because to say there is a reference to courts other than the courts of the State is a partial truth. It does not really address the meaning to be given to the phrase we have been debating.
It is certainly not case (b) and they and ourselves are in an agreement about that. We would say it is case (c) and we would say that the arguments advanced in paragraphs 16 to 24 carry considerable weight. They make the point in paragraph 22 that:
Section 79 does not authorise a federal court to do -
in the last words of 22 -
that which a State law in terms.....mandates may only be done by a particular State court.
They make the point that an expansive reading of section 79 would not only operate in favour of Commonwealth courts. Quite rightly they say it would operate in respect of every State court exercising diversity jurisdiction.
GUMMOW J: So - - -
MR YOUNG: Section 79 applies to State courts exercising federal jurisdiction.
GUMMOW J: Yes.
MR YOUNG: So in every diversity case, say wrongful dismissal between an employer in one State and an employee in another, it might be contended that section 79 when an action commences in New South Wales picks up the Victorian law on termination of employment or some other consequence like that. So to give the closing words of section - - -
GUMMOW J: It would be the law of New South Wales it would pick up.
MR YOUNG: No, it will be - - -
GUMMOW J: We are talking about an action commenced in New South Wales.
MR YOUNG: If it is a diversity case the court will be exercising federal jurisdiction and section 79 would make applicable State laws. It seems to us that that factor is relevant to what meaning is given to the words applicable in section 79. It is really the contemplation that section 79 might be picking up and overriding limitations in State legislation in a wide variety of circumstances and not just for the benefit of the Federal Court but in a way that affects the courts around the country.
GAUDRON J: What is wrong with that?
MR YOUNG: It may be thought there is nothing wrong, your Honour, but - - -
GAUDRON J: We are, after all, talking about federal jurisdiction in respect to which the States have no legislative power, with respect to which the Commonwealth does, subject to Chapter III, have legislative power, and in respect of which it can, I would have thought, provide as to what substantive law of a State should be applied with or without its meaning unchanged.
MR YOUNG: Take Ducret's Case, your Honour - - -
GAUDRON J: We are talking about the legislative power at this stage.
MR YOUNG: Yes. What I was going to say is that the consequence may be that what gets picked up by section 79 by a State court exercising federal diversity jurisdiction ends up being a modified form of the law that would otherwise apply in the same court in a dispute between subject and subject resident in the same State.
GUMMOW J: That is right. That is a consequence of Federation, is it not?
MR YOUNG: Can I turn to section 64 and put some submissions based on that section. The argument advanced by ASIC is that the Full Court's construction of the sections and its conclusion that section 79 did not operate should be rejected because it would have the consequence that there is no court to which ASIC could apply. It is said ASIC being the Commonwealth, it could not apply even to the Supreme Court of Victoria because, in that event, section 39(2) would invest the Supreme Court with federal jurisdiction and it would only be exercising federal jurisdiction. Let me accept the predicate that ASIC is the Commonwealth for the purposes of this set of arguments. We do not accept it generally, for reasons I will come to, but accepting that for the moment, the argument leaves out of account section 64.
If ASIC or the Deputy Commissioner of Taxation - let us take ASIC because it is this case - were to make an application in the Supreme Court of Victoria under the Corporations Law and of the kind made here, the Supreme Court of Victoria would, we accept, be exercising federal jurisdiction. We do not join in the contentions advanced by Edensor that there is some kind of implied abrogation of either section 39B or section 39(2).
We say section 79 would not apply for the reasons we have given, to pick up sections 737 and 739 and make those powers available to the Supreme Court exercising federal jurisdiction. However, section 64 would do that work, for this reason: in a suit between subject and subject in the same terms in the Supreme Court of Victoria, the powers under section 737 and section 739 would be available and rights would be determined in accordance with those powers.
Section 64 provides that:
the rights of the parties shall as nearly as possible be the same.....as in a suit between subject and subject.
That has been said to mean that all questions of right are to be determined in the same way as they would be if the Commonwealth were a subject. So, in our respectful submissions, section 64 would operate to ensure that if ASIC went to the Supreme Court of Victoria, the rights of the parties would be determined in the same way as between subject and subject, and there would be no barrier to a court granting remedies under sections 737 and 739. The Court would do that, notwithstanding it is exercising federal jurisdiction, because it is empowered to do so by section 64. It would be empowered to do that, notwithstanding the proper construction of section 58AA, because section 64 has a substantive operation on substantive rights.
The case I should take the Court to immediately is Austral Pacific Group Ltd v Airservices Australia HCA 39, which deals with both sections 79 and 64. Paragraph 15 deals with the matter - that is in the joint judgment of the Chief Justice and Justices Gummow and Hayne. Justice McHugh deals with the matter more extensively commencing at paragraph 54. I draw particular attention to the propositions his Honour states in paragraph 56, including the proposition that section 64:
is a source of substantive, not just procedural, rights....applies in suits in federal jurisdiction.
There is no inconsistent law of the Commonwealth or any constitutional barrier to section 64 doing the work we say it does. There is a suit, undoubtedly, in the proceedings in this case. "Suit" in Commonwealth v Western Australia, 196 CLR 392 at page 438, was described as a word embracing proceedings "for the determination of existing rights and obligations.....which involve the exercise of the judicial power.
Justice McHugh goes on to raise a matter that we need to deal with. In paragraph 62, and further in paragraph 64, there are elements of his Honour's discussion which seem to presuppose that section 64 and section 79 operate in tandem. For instance, mid-way through paragraph 64, there is the sentence:
If, as I think, section 79 is the provision that furnishes the body of law which is to be applied by the court exercising federal jurisdiction and section 64 is the provision that gives a right to proceed against the Commonwealth, then arguably in Dao the State law was not "picked up" by section 79.
However, paragraph 63 does contemplate separate and independent operation of the two sections.
It is our respectful submission that section 64 does operate independently and can operate even if section 79 is not available, because there is no applicable State law to pick up. First, there is no warrant, in our submission, in the language of section 64 for denying it an independent operation and assuming that it can only work if section 79 first works; secondly, the cases that have dealt with section 64 have presupposed its independent operation in Maguire v Simpson [1977] HCA 63; 139 CLR 362. Only one judge, Chief Justice Gibbs, referred to section 79. All of the other judgments treated section 64 as having an independent operation. Likewise in Evans Deakin [1986] HCA 51; 161 CLR 254 and likewise in Commonwealth v Anderson [1960] HCA 85; 105 CLR 303.
Further, it is our submission that section 64 must be able to operate independently and one reason is this: section 79 applies where a court is exercising federal jurisdiction and where there is no Commonwealth party, so they operate in different fields. They may overlap, but they can operate in different fields.
McHUGH J: I think my discussion in Airservices was premised on the basis that there was no common law doctrine applicable on which section 64 could operate.
MR YOUNG: Yes.
McHUGH J: You were dealing in a vacuum there.
MR YOUNG: Yes, well, in case there is any issue about it, because our position is, of course, that section 79 does not operate and does not do the work of making this power available to the Federal Court, hence ASIC cannot access that power of proceedings in the Federal Court, but it could in the Supreme Court, not by force of section 79, because it is equally inapposite, but because of section 64.
Now, the other case I should mention is Commonwealth v Anderson [1960] HCA 85; 105 CLR 303 which your Honour Justice McHugh mentioned. I am not sure it is on the list of authorities. It dealt with a State statute that took away the general ejectment jurisdiction of Supreme Court and placed it in a specialist tribunal. The Commonwealth instituted proceedings in the Supreme Court for ejectment in a section relying on federal jurisdiction conferred on the Supreme Court by section 39(2) of the Judiciary Act.
The case that I think - the leading judgment is that of Chief Justice Dixon with whom the other Judges agreed. The two important passages commence at the very foot of page 309, last two lines, continuing until about point 4 on the page that follows. The second passage is at page 311 commencing at about point 2 on the page with the sentence "It is difficult" and concluding at the end of that paragraph.
The case, in our submission, presents no barrier to the argument we advance based on section 64, for this reason: the case simply stands for the proposition that a State Act of the kind there in question did not operate to deny the Commonwealth the right to institute proceedings in the Supreme Court under section 39(2) of the Judiciary Act, taking advantage of the invested federal jurisdiction. The fact that proceedings between subject and subject had to be brought in a specialist tribunal had no relevance to the Commonwealth action and section 64 did not operate to apply the restrictions that would apply between subject and subject to the Supreme Court's entertainment of the ejectment proceedings brought by the Commonwealth.
Finally, the words "as nearly as possible" in section 64 present no barrier to our argument. There is reference in a number of cases to the possibility that those words might exclude section 64's operation in relation to functions peculiar to government. Those references have never really been expanded beyond a cautionary note. There is such a reference in Maguire v Simpson 139 CLR at 394 point 4 in the judgment of Justice Stephen. There are similar references in Commonwealth v Western Australia 196 CLR 392 by Justice Gummow at 438 to 439, by Justice McHugh at 421, by Justice Kirby at 447, and by Justice Hayne at 475 to 476.
KIRBY J: Is this on the hypothesis that if it is purely governmental it is not something apt for a subject and subject?
MR YOUNG: Yes, your Honour. But we would say there is no reason to suppose that ASIC should not be able to avail itself of the benefit of section 64 if it brings proceedings in the Supreme Court because there is nothing about its function that renders inappropriate the operation of section 64 in its favour to make these remedies available. Now, I have put that argument on the assumption that ASIC is the Commonwealth. In our respectful submission, there is an issue about that. Our learned friend, Mr Jackson, said the question posed by section 39B(1A)(a) of the Judiciary Act was to be approached by posing two questions: first, is ASIC the Commonwealth, in the sense that it is established, funded and staffed by the Commonwealth, and secondly, is ASIC seeking an injunction or declaration? To pose the question in that bifurcated way assists our learned friend to get the answer he wants but it is not the language of 39B(1A)(a).
GUMMOW J: Do you say it is the Commonwealth at section 64?
MR YOUNG: Yes, your Honour. I mean, for the purposes of that argument, yes, but I am addressing the situation where what is put is there is a difficulty. ASIC cannot go to the Supreme Court. The difficulty arises because it is the Commonwealth. If it were not the Commonwealth section 64 would operate differently but what we say is this, that the cases dealing with section 75(iii) have all regarded the question of whether the relevant Commonwealth authority was relevantly performing Commonwealth powers and functions as of central importance.
Now here, we would say the substance of the matter is that ASIC is not performing the Commonwealth powers or functions in joining as a party in this litigation. The relevant provisions are the provisions of the Corporations (Victoria) Act sections 58, 62 and 66. By those sections the State of Victoria confers powers and functions on ASIC to take action under Victorian law.
Secondly, section 2 of the Corporations Law of Victoria gives ASIC the general administration of the Victorian Act. The only connection with Commonwealth power is section 11(7) of the ASIC Act 1903 by which it said that:
The Commission has any functions and powers that are expressed to be conferred on it by a national scheme law of another jurisdiction.
So, by Commonwealth authority in the form of 11(7), ASIC is empowered to accept the State conferral of powers, but that does not alter the substance of matters. When ASIC institutes proceedings in respect of this takeover to allege contraventions of section 615, it is our respectful submission that it is performing State powers and functions, and let us assume validly because of the backing of section 11(7). It does not alter the fact that this is really ASIC in the guise of a State agency performing State powers and functions, because it wears those two hats.
The question is that which is being put in a number of cases, namely, is the agency in question really one by which the Commonwealth, through that agency or an emanation, is carrying on the relevant activity? That is the way it has been put in Inglis and I will just give the Court references: [1969] HCA 44; 119 CLR 334 at 348 and 342; State Bank of NSW v Commonwealth [1986] HCA 62; 161 CLR 639 at 644 to 645 and 652; The Commissioner of Taxation v State Bank [1992] HCA 6; 174 CLR 219 at 230 to 231 and 232 to 233 and Residential Tenancies 190 CLR 410 at 448.
The other consequence of treating ASIC as the Commonwealth whenever it seeks the declaration or injunction or, for that matter, of treating any Commonwealth authority whenever it seeks a declaration or injunction as the Commonwealth, is to give a very far-reaching ambit to section 39B(1A)(a) of the Judiciary Act. Again, there may be nothing wrong with that, but it means that in any matter in which any Commonwealth instrumentality seeks an injunction or declaration about any matter, not necessarily a matter under Commonwealth law and not necessarily a matter that affects the interests of the Commonwealth as the Executive Government, the Federal Court has jurisdiction, be it a contract matter, an industrial matter, or whatever. The other way in which the Commonwealth puts - - -
HAYNE J: What is so startling about that when this Court has original jurisdiction in such matters anyway?
MR YOUNG: This Court has original jurisdiction in matters in which the Commonwealth is a party or the party is there on behalf of the Commonwealth.
GUMMOW J: Yes, and we can remit it to the Federal Court.
MR YOUNG: Yes.
GUMMOW J: Thank goodness.
MR YOUNG: Exactly. But my point is that in the jurisprudence of this Court, 75(iii) has always been applied by asking the question whether the relevant function or power being performed is truly that of the Commonwealth? The argument for ASIC slides over that issue and says, "ASIC is established, funded and staffed by the Commonwealth", about which there can be no debate, "therefore, necessarily, whenever ASIC brings a proceeding it falls within the constitutional provision".
KIRBY J: Yes, but presumably within the co-operative scheme this is the way the Commonwealth has contended that its agency should perform its functions.
MR YOUNG: Within the co-operative scheme, yes, your Honour, evidenced by section 11(7). But does that alter the question of whether it is really the Commonwealth that is a party to this proceeding in the constitutional sense, or in the sense required by section 39B(1A), which is presumably the constitutional sense?
The final matter about ASIC's status as the Commonwealth is this: ASIC also relies upon section 39B(1A)(c) for the contention that the Federal Court was exercising federal jurisdiction. That paragraph deals with matters arising under any laws made by the Parliament. The only way in which they say this matter before the Federal Court arose under a law made by the federal Parliament, is, in our submission, a tenuous one. It is this: they say because ASIC made the application and had the standing to make the application, that means that the whole matter arises under a law made by the federal Parliament. That does not look at the heart of the matter, the controversy, which involved allegations of contravention of the Trade Practices Act and the State law. Rather, they say, simply because ASIC made the application that qualifies. In our submission, that is tenuous.
GLEESON CJ: Mr Young, leaving to one side the argument that you want to make concerning the validity of the State Jurisdiction Act, how long do you expect to require to complete the remainder of your submissions?
MR YOUNG: Five or ten minutes, your Honour.
GLEESON CJ: Well now, it may be convenient for us to hear what other parties and interveners want to say about the arguments you have put so far after you have completed that five or ten minutes.
MR YOUNG: Yes, your Honour.
GLEESON CJ: And we can then, having heard all the arguments, decide on the future course of the proceedings. So we will take that course and we will adjourn until 2 pm.
MR YOUNG: If your Honour please.
AT 12.44 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.03 PM:
GLEESON CJ: Mr Young, we are honoured to have with us this afternoon Lord Hutton of the House of Lords and he will listen to your argument for a short time, without expressing any opinions on it. Yes, Mr Young.
MR YOUNG: If your Honours please. There remains only one brief point. Before the adjournment Justice Gummow asked me whether the argument I was putting, based on section 64 of the Judiciary Act, depended on the assumption that ASIC was the Commonwealth, to which I answered, yes. The question and the answer though, suggest that I may not have fully explained the point we are putting concerning section 64, which is this: if ASIC is assumed to be the Commonwealth, and this application is assumed to be made in the Supreme Court, section 64 has the operation we explained prior to the adjournment.
If ASIC is not the Commonwealth, then the Supreme Court, on an application by the Commission, under section 737 and 739, would be "exercising the jurisdiction of this jurisdiction". So, in that scenario, section 64, of course, would not operate because the Commission is not the Commonwealth but there would - - -
GAUDRON J: But if it was a person being sued on behalf of the Commonwealth?
MR YOUNG: Well, your Honour, if that falls within - - -
GAUDRON J: No, but that would bring it within federal jurisdiction, yes.
MR YOUNG: Yes, it would, your Honour, but we would be back to the previous assumption.
GAUDRON J: Yes.
MR YOUNG: The point I am endeavouring to make is to contrast the two scenarios, Supreme Court to Federal Court, so the second and alternative position in the Supreme Court is that if ASIC is not the Commonwealth, section 64 does not operate, but there is no problem in the availability of the orders, because the Supreme Court, on such an application by the Commission, would be "exercising the jurisdiction of this jurisdiction" and hence it could make orders of the kind described in sections 737 and 739. If we transpose the illustration to the Federal Court situation, in the Federal Court the Federal Court would always be exercising federal jurisdiction and that is necessarily so following Wakim. The consequence therefore is that in a suit between subject and subject in the Federal Court, section 58AA, 737 and 739 would not operate to make the orders available in such a context.
So if ASIC is the Commonwealth, section 64 does not operate in that scenario for a different reason. There is no different position subject to subject. It is always federal jurisdiction and the containment effected by sections 58AA, 737 and 739 always operates in the Federal Court context, regardless of whether ASIC is the Commonwealth or not. If the Court pleases - - -
KIRBY J: Can I just ask you before you resume your seat: talking about scenarios, because that seems to be a word that you like, is the scenario of your attack on the use of the State Jurisdiction Act as severable, additional and different argument or is it in some ways related to the matters that you have just been putting to the Court? If there is an inter-relationship between the arguments, I would like to understand it before you complete the argument on the first issue.
MR YOUNG: Yes. The point of contact, your Honour, is the existence of what the State Act defines as an "ineffective judgment" in a State matter of a Federal Court. If there is no "ineffective judgment" of the Federal Court at first instance - - -
KIRBY J: Being defined as?
MR YOUNG: Being defined in section 4 of the State Act - - -
KIRBY J: In terms of jurisdiction, is it?
MR YOUNG: It is, your Honour, but in terms of the exercise of jurisdiction it is defined as follows:
A reference in this Act to an `ineffective judgment' is a reference to a judgment of a federal court in a State matter given or recorded, before the commencement of this section, in the purported exercise of jurisdiction purporting to have been conferred on the federal court by a relevant State Act.
KIRBY J: What does that mean, "purported" as distinct from when legally analysed, real? Or does it mean "purported" in the sense that it is, in fact, or in law an exercise of that jurisdiction?
MR YOUNG: The parties have debated that issue in their submissions, your Honour, and that is why there is a possible overlap, depending on what view is taken of the true meaning of this definition.
GAUDRON J: But if your argument were accepted, it could never be an ineffective judgment because the order was purportedly made in the exercise of federal jurisdiction and not otherwise.
MR YOUNG: Yes, your Honour, but that begs the question of what is meant by "purported". If "purported" means an ostensible or avowed exercise of jurisdiction, there might be one view of the scope of the definition. If "purported" means an exercise of jurisdiction that has now been held by the Full Federal Court to have involved a want of jurisdiction, then the State Act would already have attached simply by virtue of the fact that we have those declarations on foot by the Full Federal Court.
KIRBY J: I realise that, but how do you use that to bolster your argument on the matter which you have been putting before us until now? How does it supplement or strengthen that argument?
MR YOUNG: It does not, your Honour.
GLEESON CJ: You did not complete a sentence. You said, "If there were no ineffective judgment". What were you going on to say?
MR YOUNG: If there were no ineffective judgment within the meaning of section 4, then the validity issues are discrete and separate.
GLEESON CJ: Thank you.
KIRBY J: The Full Court of the Federal Court assumed that there was an ineffective judgment?
MR YOUNG: They assumed that there was an ineffective judgment at the point at which Justice Merkel made his orders. They treated order 7 from that point of time as an ineffective judgment, there and then attracting the operation of the State Jurisdiction Act.
KIRBY J: But it is not attracted by the order of the Federal Court; it is attracted by its own operation.
MR YOUNG: Yes. The State Act operates upon an ineffective judgment as soon as it is pronounced. It is not dependent upon the Federal Court's view or declaration that the orders were ineffective; the State Act operates on its own force. That is why last evening we said that there is, at the moment, this conflict between the operation of the State Jurisdiction Act and the extant orders made by Justice Merkel, which have not yet been set aside.
McHUGH J: I know we discussed it this morning, but do you concede that this phrase "the jurisdiction of this jurisdiction" in section 58AA includes federal jurisdiction exercised by the Supreme Court of Victoria?
MR YOUNG: No.
McHUGH J: You do not?
MR YOUNG: We do not concede that. We say, on the contrary, its plain meaning is that it is confined to the exercise of the jurisdiction of the polity of Victoria. On that reading, it necessarily excludes the exercise of federal jurisdiction.
McHUGH J: Thank you.
GLEESON CJ: Thank you, Mr Young. Yes, Mr Solicitor-General for Victoria.
MR GRAHAM: May it please the Court, we will be very brief. We submit that there is no need for the Court to consider the question of the validity of the State remedial legislation in this case. It seems to be accepted on all sides that the Federal Court exercised federal jurisdiction when it dealt with the application of ASIC, not State jurisdiction.
KIRBY J: Well, you say it is accepted on both sides; I do not think Mr Hayes accepted it. He talked of an implied exclusion of jurisdiction.
MR GRAHAM: Although there was still the Trade Practices Act accrued jurisdiction part of the argument which still means that there was federal jurisdiction.
GUMMOW J: Yes, that is why he differentiated between jurisdiction and power, as I understand it.
MR GRAHAM: Yes, and perhaps I should not have set them all aside, your Honour, but - - -
GUMMOW J: Well, I think you are right.
MR GRAHAM: But we say that, as is obvious, the State Act only applies in cases where there is either an ineffective judgment that has been given by a Federal Court which is a judgment in a State matter as defined in section 3 of the State Acts or whether there is a State matter pending in a Federal Court when section 11 may be invoked. In order for the question of validity to arise at all this Court must hold that Mr Justice Merkel, as well as exercising federal jurisdiction in a federal matter, that is to say what I will call a non-State matter for the purposes of the remedial legislation, he was also purporting to exercise purely non-federal jurisdiction as distinct from federal jurisdiction, including accrued jurisdiction in a State matter.
GAUDRON J: That is to say we have to find that there are two matters.
MR GRAHAM: That is right, your Honour, and that is very difficult.
KIRBY J: Where do you say the applicants' opportunity to challenge the validity of the State Act arises when the matter goes back to the Supreme Court of Victoria?
MR GRAHAM: That may never occur, your Honour.
KIRBY J: Well, that was obviously the intent of the Full Court of the Federal Court.
MR GRAHAM: Yes. On the argument put forward by ASIC, the Federal Court at first instance and the Full Federal Court will have complete jurisdiction to deal with all the matters that arose for determination before - - -
KIRBY J: That gets back to the question of whether they have the power as distinct from jurisdiction.
MR GRAHAM: Yes, and that is the question that has been agitated - I do not wish to return to it at any length. The jurisdictional sources of the Federal Court have been identified by our learned friend - it was the Trade Practices Act, the Judiciary Act and the accrued jurisdiction, all ultimately going back, of course, to Chapter III. The only question remains is whether there is a distinct issue as to whether jurisdiction must be distinguished from power and then whether there is a source of power in the Federal Court to make order 7 and this Court has been favoured with argument relating to those possible sources of the power invoked under section 737 with the aid of section 79. On that analysis, we say no question of want of jurisdiction, in part, arose before the Federal Court. There is no ineffective judgments and there is no occasion to invoke the State remedial legislation.
KIRBY J: Does the State of Victoria support the broad view of section 79?
MR GRAHAM: Yes, your Honour. How broad that is may fall to be determined in later cases, but we would say it is sufficient to attract to the Federal Court the capacity to make orders of the kind contemplated by section 737 and 739 if the Federal Court lacks jurisdiction under its own Act to make such orders. That is, of course, a possibility, given the breadth of the powers under sections 23 and 24 of the Federal Court of Australia Act. Those are our submissions, if the Court pleases.
GLEESON CJ: Mr Solicitor for Western Australia.
MR MEADOWS: May it please the Court, we submit that sections 737 and 739, when read with section 58AA of the Corporations Law, do not apply to proceedings in federal jurisdiction of their own force but are picked up as surrogate federal law by section 79 of the Judiciary Act. So, in that regard, we are in agreement with my learned friend, the Solicitor from Victoria. It is a matter of the construction of section 58AA and we submit that the phrase "exercising the jurisdiction of this jurisdiction" means exercising the authority to adjudicate of the polity of the State of Victoria conferred under sections 42 and 42A of the Corporations (Victoria) Act.
All parties seem to accept that the reference to jurisdiction, when that term is first used in that section, that is section 58A, is clearly used in the sense of authority to adjudicate. We would say that it follows from that proposition that the term "jurisdiction" when used for the second time must be referring to the polity of the State of Victoria. This is because it is only a polity which can confer authority to adjudicate. Quite clearly, a geographic area could not confer authority to adjudicate.
It is also relevant in this context, we would submit, to note the difference in language between subsections (1) and (3) of section 58AA. Subsection (3) refers to:
The jurisdiction that courts have in relation to matters under this Law -
Now that authority to adjudicate may be derived from the Acts of a number of polities. Whereas subsection (1) refers to "the jurisdiction of this jurisdiction", if subsection (1) had been intended to refer to courts applying the Corporations Law of Victoria, wherever their authority to adjudicate was derived from, then language of the type employed in subsection (3) could have been expected to have been used in subsection (1).
If the section was intended to facilitate the conferral of power on courts dealing with matters arising under the Corporations Law of Victoria, the words "jurisdiction of this jurisdiction" would have been unnecessary. This is because any application to a court under sections 737 and 739 of the Corporations Law of Victoria, which could only be made when there was a contravention of section 615 of the Corporations Law of Victoria, necessarily involves the court dealing with a matter under the Corporations Law of Victoria. The definition of "court" could only apply for the purposes of matters under the Corporations Law of Victoria, even if the words "jurisdiction of this jurisdiction" had been omitted.
Now it is true that the Corporations Law contemplates applications being made by the Commonwealth, which will necessarily be in federal jurisdiction. However, those references merely give to the Commonwealth standing to make applications under a State law and we would say that they are included in recognition of the fact that the provisions of the law will be applied in federal jurisdiction when they are picked up by section 79 or indeed some other Commonwealth law. So, we would submit it follows that section 58AA, applying sections 737 and 739, does not of itself say anything about the powers that may be available to a court exercising federal jurisdiction. It is necessary to have resort to section 79 or some other Commonwealth law.
There are two points that should be noted about the phrase "exercising the jurisdiction of this jurisdiction" in section 58AA. These are the provisions on which Edensor and Yandal focus attention for their argument that the provisions are not applicable to these proceedings for the purposes of section 79.
The first point - and I think this has actually already been made - is that if those arguments are accepted, it would apply equally to prevent section 79 of the Judiciary Act from applying those sections to a Supreme Court or another State court exercising federal jurisdiction such as in a winding up application by the Commissioner of Taxation. We also submit that it is only section 79 and not section 64 which can pick up sections 737 and 739. The contrary submissions of Yandal fail to take adequate account of the diversity jurisdiction.
For example, it may well be that a State Supreme Court would be exercising federal jurisdiction where a member of a company applied under section 737 and the person who allegedly acquired the shares were residents of different States. On the argument of Yandal, the Supreme Court would not in those proceedings be "exercising the jurisdiction of this jurisdiction" and sections 737 and 739 would be picked up by neither section 64 nor section 79. What this example illustrates is that one cannot assume that a matter is in State rather than federal jurisdiction simply because the matter is between subject and subject rather than subject and the Commonwealth. The matter may well still be in federal jurisdiction even though the Commonwealth is not a party.
In the present context the effect of section 64 is that the rights of the parties are the same as they would be as if the suit was between subject and subject in federal jurisdiction. On the argument of Yandal, the power to grant remedies under sections 737 and 739 does not exist if the case is in federal jurisdiction. The logical consequence of that submission, we would say, remains that in any proceedings by ASIC or the Commonwealth, powers that the Corporations Law vests in a "court" or a "Court" will not be available unless they are picked up by section 79.
Could I also make this point, that if Yandal's submissions as to the operation of section 64 are correct, then there would seem to be no reason why the same argument could not be applied to the present proceedings in the Federal Court because their argument is that the omission of the Commonwealth as a party means that the rights of the parties must be the same as if the proceedings were in State jurisdiction, so that sections 737 and 739 can apply. The same assumption could be made, we would say, in the case of the Federal Court which may have federal jurisdiction simply because the applicant is ASIC.
So it is a necessary consequence of the arguments of Edensor and Yandal that the Commonwealth and ASIC could never obtain relief where the power is conferred on a "court" or "Court". The impact which this result would have on the operation of the Corporations Law makes it quite unlikely, we would say, that this was intended by the draftsman.
KIRBY J: The draftsmen intended that it work in the context of pre-Wakim. That is why talking of what was intended is completely likely to mislead.
MR MEADOWS: He did. I am talking about in terms of the proper construction of the section, not some discernment of the intention of the draftsmen in any other way.
What we say is that the express contemplation which is to be found in sections 737 and 739 that the Commission will make applications with respect to the relief which is available under those sections, makes it clear that it was intended that section 79 should apply, because if it was not the case that section 79 were to apply, then the reference to the Commission would be redundant.
May I just make one other point, and this is relative to what Justice Gaudron pointed out and that is that these sections should be construed and, particularly, section 58AA, on the basis that the State has recognised that it has limited power to regulate the powers available to courts exercising federal jurisdiction. It is by reason of that limited legislative authority that section 58AA does not purport to confer a power on a court exercising federal jurisdiction. As we have said, it is necessary to have resort to some federal law in order to provide those powers and in this instance we would say section 79 is clearly applicable. If it please the Court.
GLEESON CJ: Mr Solicitor for South Australia.
MR SELWAY: If it please the Court. In our view, the case turns on the proper interpretation of section 79 and, in particular, its breadth.
In relation to that, what we say section 737 does is, firstly, it confers power on ASIC and, by reason of that conferral of power, it confers standing on ASIC. Secondly, it provides a remedy in particular courts. Several submissions have described section 737 as conferring a power on courts and either expressly or impliedly those submissions seem to deny that State legislation, having these effects, that is to say creating standing or creating a remedy, is effective in federal jurisdiction.
The implication seems to be that there is some constitutional prohibition upon a State law having such an operation in federal jurisdiction but for a Commonwealth law picking it up. The problem with that approach, we say, is that it skews the interpretation of section 79 and puts the emphasis in the wrong place.
In our submission, even in the absence of section 79, a State can legislate to create new causes of action to confer standing and to create remedies. In the absence of any inconsistent federal legislation under sections 107 and 108 of the Commonwealth Constitution those laws of the State are laws recognised as part of Australian law and courts giving effect to Australian law, including federal courts, are required to give effect to those laws.
Indeed, we would say under section 75(iv) diversity jurisdiction and perhaps of somewhat more importance to the States that it is jurisdiction dealing with the States, the Commonwealth makes the power, we would say, to create a substantive matter. The matter has to pre-exist the conferral of jurisdiction and will probably come out of either common law or State law. The Commonwealth clearly has incidental power but its substantive power, we would say, is limited.
Consequently, we would say, as a number of your Honours have said in the course of argument, that if section 79 did not exist the common law and/or the Constitution would probably come up with something to the same effect. Of course, section 79 now operates. In this case we say it has two effects. The first is that if the State law had purported to direct a Federal Court or any court exercising federal jurisdiction as to what law it should apply, then the State law would be invalid for inconsistency with section 79. We have dealt with that issue in paragraph 5b of our written submissions.
GAUDRON J: Well, would it be invalid inconsistency or just - because you have no power to legislate with respect to the federal judicial power. It is just outside your scope of - - -
MR SELWAY: It begs the question, with respect, your Honour.
GAUDRON J: Yes.
MR SELWAY: Your Honour may well be right but if we can create the matter, including standing, remedy and cause of action, and that is adopted by whether the Constitution or the common law, then it does not seem to us to go very much further for the State to say you apply it as well and if there was not a section 79 the State law would merely be consistent with the Constitution and the common law and probably not invalid, though whether it meant anything may be another question. But with section 79 there, one can say the State just has no business legislating on those matters. The Commonwealth has covered that field.
KIRBY J: Yes, but there are always those last key words "in all cases to which they are applicable".
MR SELWAY: Yes.
KIRBY J: And that takes you back. You said this case is about the interpretation of 79 of the Judiciary Act but there is a prior question of the interpretation of section 58AA because you have to see that to see if it is something that is applicable.
MR SELWAY: Yes, your Honour. Well, that leads to the second thing that section 79 does. The first of them is the potential inconsistency if the State law had tried to identify a law. The second is that section 79 picks up and applies a valid State law, and we would say in this case section 737 of the Corporations Law. We have dealt with that in paragraphs 8 to 11 of our written submissions but what we would say is that by expressly referring to ASIC in section 737 the only consequence can be a parliamentary intention for this section to apply in federal jurisdiction. Whatever section 58AA says and however it is interpreted, the clear intention of the Victorian Parliament was that this provision was to be picked up and applied in federal jurisdiction and how, in that circumstance, one can - - -
GUMMOW J: Well, unless you say, "Or to legislate conformably to section 79".
MR SELWAY: Yes, your Honour. Clearly the knowledge that section 79 exists.
GUMMOW J: Not to legislate in a way that would make 79 inapplicable.
MR SELWAY: Yes, your Honour.
KIRBY J: But at the stage it was legislated it did not mean 79. At least it was so thought.
MR SELWAY: With respect, your Honour, it still did because, on any view, if ASIC is the Commonwealth - which I must say is the premise upon which we put this submission - then if ASIC is a party it is within federal jurisdiction. It is not a conferral to State jurisdiction.
KIRBY J: The question is whether that is the second mistake that the drafter made.
MR SELWAY: What we would say is it is relatively self-evident. Our submission is that one does not leap to the conclusion that the draftsman has made an error when the issue is - - -
KIRBY J: Well, he has made one error.
MR SELWAY: When the issue is does section 737 in its terms suggest that it is not appropriate to be picked up, that it does not apply in its terms? We say that the very opposite is the case. The very fact that ASIC is a party to the proceedings and is clearly contemplated as being a party, necessarily means that it is in the contemplation that this remedy be applied in federal jurisdiction.
KIRBY J: Could you remind me - I think we were told this - was the original scheme of the legislation that the Federal Court would have exclusive jurisdiction in these matters?
MR SELWAY: My understanding is not, your Honour. I understand my learned friend the Solicitor for Victoria was to put submissions on the history, but my understanding from my quick perusal of the State provisions he intended to hand up, both the Supreme Court and the Federal Court were both to have jurisdiction.
Your Honours, the only other matter is that if the Court comes to consider the validity of the State Act, paragraph 3 of our written submissions will require some variation. But I do not need to take the Court's time with that. Paragraph 13 of our written submissions would require a variation. If it please the Court.
GLEESON CJ: Thank you. Mr Solicitor for New South Wales.
MR SEXTON: Your Honours, Mr Young has largely stolen our thunder, although I note not our conclusion, in relation to the operation of section 79 of the Judiciary Act, which was, in fact, the only point on which we made written submissions in this case.
In those circumstances, can I simply refer the Court to two other authorities in relation to section 79. Your Honours will recall that when Mr Young went through the three categories that we set out in relation to the operation of section 79 on Federal Courts, we had a first category, which is where the State laws were expressed to apply to courts other than State courts. We say that is this case. But the second category was one where the State laws were expressed in general terms to apply to all courts. One example of that would be The Commissioner of Stamp Duties (NSW) v Owens [No 2][1953] HCA 62; , (1953) 88 CLR 168. Although in that case this Court held that the relevant provision of the New South Wales Suitors Fund Act did not apply to this Court, but we would give that as an example of the question of construction that is involved in our second category.
In relation to the third category, that is State laws whose operation is expressly confined to a particular State court or courts - - -
KIRBY J: Could I just ask you to pause there. I have not read Owens, or if I did, years ago. What was the key - I mean it sounds like a procedural law applicable to the courts of New South Wales. Now why did the Court not pick that up and run with it in this Court?
MR SEXTON: Well, your Honour, it was held as a matter of construction, which all these categories really involve of that particular statute, that it was not intended to apply to this Court, that is, to the High Court. So, in those circumstances, section 79 did not pick it up.
GLEESON CJ: Because it was a step in machinery provided for indemnifying an unsuccessful litigant in respect of costs out of a fund set up and administered by the State.
MR SEXTON: Yes, your Honour.
KIRBY J: It is a question of where you draw the line. It sounds as though this is an area where a more and more expansive view has been taken of section 79. The point will be reached where then this Court, or other Federal Courts, are effectively re-crafting legislation out of the judicial power.
MR SEXTON: We would say, your Honour, that the authorities indicate that there are limits to the operation of section 79 and perhaps the one point on which we take issue with my learned friend the Solicitor-General for the Commonwealth, that if their submissions suggest that there are no limits then we would contest that and we say the authorities reflect that. Your Honours, the third category which I mentioned, Mr Young - - -
McHUGH J: But Mr Solicitor, it is not a large step to say, having regard to the fact that section 79 refers to laws relating to procedure, evidence and the competency of witnesses, that section 79 intended that where a State law refers to a State court, you construe it to include the Federal Court.
MR SEXTON: Your Honour, it is a question of construction. In some cases, and the authorities suggest that, that may occur. But the authorities also suggest that there are cases where that would clearly not be intended.
KIRBY J: It is not a big step to say that the Suitors Fund Act will apply in the High Court in respect of a State matter where the High Court is part of the State judicature but the Court did not take that step.
MR SEXTON: It did not take that step, your Honour.
GUMMOW J: I do not think we are part of any State judicature.
KIRBY J: Well, the State is part of the Commonwealth judicature and we are the top of the national judicature.
MR SEXTON: That decision, of course, has stood for some time, your Honour.
KIRBY J: I am not criticising the decision at all. I am trying to see where the line is drawn in the sand.
MR SEXTON: Well, your Honour, it is - there may be very difficult questions of construction as to where the line is drawn. But we say this case is not one of those.
KIRBY J: What, even though the State Act, in turn, drew a distinction between "court" and "Court"?
MR SEXTON: Yes, your Honour.
HAYNE J: Mr Solicitor, into which of your three classes would you put legislation which, in terms, relates to a particular court or courts but, as a matter of construction, you conclude does not manifest an intention to do so in a way that is exclusive of any other relevant head of jurisdiction or power?
MR SEXTON: I am sorry, the legislation that your Honour posits - - -
HAYNE J: Intends to relate to a particular court or courts but does not manifest an intention to do so to the exclusion of any other relevant head of jurisdiction or power.
MR SEXTON: Your Honour, in our submission, that would probably fall in category 2. It would be then a question of construction as to whether section 79 picked up the relevant legislation and applied it to the State legislation and applied it, for example, to a Federal Court.
GUMMOW J: Is it not a category (d)?
MR SEXTON: Well, I was working on a series of closed categories, your Honour.
GUMMOW J: You seem to have set up an incomplete universe, that is all.
MR SEXTON: That is possible, your Honour. In the context of this case it seemed to us that these were the categories that really came out of the authorities. Your Honour may have created a separate category which needs to be analysed itself.
KIRBY J: I think we will need a new category to uphold the submissions of Mr Jackson.
McHUGH J: Just a flexible application of section 79 will do.
MR SEXTON: That may be so, your Honour.
GAUDRON J: It really turns on "if applicable", does it not?
MR SEXTON: Yes, your Honour.
GAUDRON J: Why would that not just mean if the law has anything to say to the subject matter of the controversy? After all, one is talking about substantive laws, procedural laws, both, in terms of section 79. "If applicable" seems to me to really be talking about nothing more than if they bear on the matter at issue.
MR SEXTON: Your Honour, we agree with that. One of the authorities to which I was going to refer the Court was - - -
GAUDRON J: Indeed, if they do not say that, it does not do much good. If 79 does not say that, it really does not serve much purpose.
MR SEXTON: In the context of that third category, your Honour Justice Gaudron said in Kruger [1997] HCA 27; 190 CLR 1 at page 140:
There may be statutory provisions couched in terms which make it impossible for them to be "picked up" by s 79 of the Judiciary Act. Similarly, there may be provisions which impose functions which are beyond the reach of s 79.
That is really the - - -
GUMMOW J: Owens' Case would be an example of that. Indemnity certificates out of State moneys.
MR SEXTON: Mr Young referred to Ducret which seems to come to that conclusion. Your Honours, those are the submissions we had on section 79. Can I simply add in one sentence that we have annexed to our written submissions our previous submissions on the State Jurisdiction Acts in Residual Assco and in Saint on the basis that if the Court gets to consider that issue, it will have those submissions again before it. If the Court pleases.
GLEESON CJ: Thank you, Mr Solicitor. Mr Solicitor for the Commonwealth.
MR BENNETT: May it please the Court, after eliminating matters which have already been sufficiently dealt with, I have produced a short table of contents on six remaining points I want to deal with very briefly, which is about to be handed up.
KIRBY J: A table of contents sounds as though there is a whole book.
MR BENNETT: No, your Honour, there are eight, but two of them apply to the State Jurisdiction Act and therefore there are, in fact, only six, and they are on one page. Your Honours, items 3 and 8, I should say, are only concerned with the State Jurisdiction Act and therefore I can leave those out.
Your Honour, the first submission is a very simple one, and that is, it really does not matter what section 58AA says, it really does not matter what the Victorian Act says. When one says that either the implication from Chapter III and the nature of accrued and associated jurisdiction or section 79 - for the purposes of this case we do not need to decide which -when one says that those pick up State law as it is, this Court has always recognised a qualification to that and, we would submit, a necessary qualification, and that is that, to the extent that the State law is merely determining what court the matter will be heard in, one has to ignore that, because that is something which is - the obvious reason - if one were to apply that, one would never be able to apply section 79, one would never be able to apply a principle that federal jurisdiction in a Federal Court picks up where necessary State law.
KIRBY J: Is that as absolute as that? What about the Land and Environment Court and the rights that are limited to that court or the Workers' Compensation Court, Commission, or the Industrial Court of New South Wales?
MR BENNETT: Yes. Your Honour, there are three qualifications I recognise: the first qualification is the Smith v Smith qualification - and this enables me to dispose of point 4 in the middle of point 1, so there will be one less point, your Honour. The Smith v Smith qualification is that where the State Act is not so much conferring jurisdiction as creating a condition or something which itself leads to further State rights, then, of course, one does not pick it up. In Smith v Smith there was a rule which said that an agreement between spouses had some effect, if approved by a particular court. One could imagine if a State statute said that where the Land and Environment Court has declared the zoning to be industrial, no one shall build a residence in that area, that would be a matter that would not be picked up, because it is simply a condition which is some further exercise of judicial power on a different occasion to the creation of a different right.
CALLINAN J: Is it an exercise of judicial power to approve a settlement?
MR BENNETT: It would not matter whether it was or was not, your Honour, because that exercise, itself, would not be picked up. If that exercise itself was picked up and accrued then, of course, the Smith v Smith exception would not apply.
CALLINAN J: But is it an exercise in judicial power to approve an arrangement or a settlement of the kind that it fell for consideration in Smith?
MR BENNETT: I think it probably is, your Honour, but I am not certain of the answer to that question.
CALLINAN J: It seemed to have been assumed, did it not?
MR BENNETT: Yes. But it would not affect the result because - - -
CALLINAN J: No, I understand that.
MR BENNETT: It probably was, your Honour, yes. The second qualification is the one which is implicit in your Honour Justice Callinan's question and that is that if the conferral of power on the State body is one which is incapable of being a judicial power, that is, if it is one which is not something which is judicial if given to a court and administrative if given to an administrator, but something which is, on any view, non-judicial then, of course, it cannot be picked up.
The third possible qualification is, there may be cases, and it is hard to imagine any, where the nature of the tribunal is so bound up with the conferral of the right that it is impossible to separate them. One could let one's imagination roam to think of such examples, but it is hard to think of any at the moment. There may be some. But subject to those three qualifications, we would submit that there is no difficulty in saying that whenever a State law creates rights and says that they are only determinable by particular courts, that is, nevertheless, picked up by section 79.
The case of Thomas v Ducret may be an example of the third kind where the State law was really characterised as something that was specifically distinguishing between magistrates and courts, and the different result was come to.
GUMMOW J: Well, summary offences.
MR BENNETT: Yes, your Honour. It might be, if this were the appropriate occasion for it, that we would have submitted that that case was wrongly decided, but this is not the occasion to do that, because one can distinguish it on that basis for present purposes. But it may be in that third category of case.
The second matter which really flows from that is that one consequence pointed to by New South Wales and referred to by your Honour Justice Gummow yesterday, is what happens where you have this scenario, to use my learned friend's phrase: you have a State statute which says exclusive jurisdiction is conferred on the District Court to deal with claims for damages in motor accidents; you then have a Commonwealth vehicle involved in a motor accident and the Commonwealth is a party to litigation and a claim is brought in the Supreme Court, pursuant to section 79. We would say, so what? The effect of that is that, because it is federal jurisdiction, the federal jurisdiction rule as to choice of court applies and the State law is picked up, except for the bit which says which court it is.
GUMMOW J: I am not sure that is right, Mr Solicitor, because first of all you have to find the investment, have you not?
MR BENNETT: Yes.
GUMMOW J: And 39(2) says State courts, within such limits as to "subject-matter".
MR BENNETT: Yes. It may be one would have to take a different example to make the point.
GUMMOW J: It may be one would have to go to a District Court because of that.
MR BENNETT: Yes. It may be in that particular case one would have that, yes, your Honour, but if it was diversity, say, or some other basis of federal jurisdiction or accrued jurisdiction, then we would submit one could bring the action in the Supreme Court.
Might I just remind your Honours, without going through all the cases, the leading case for this proposition is John Robertson v Ferguson Transformers [1973] HCA 21; 129 CLR 65 and I only refer to it for this reason, that the headnote is a little misleading on the counting of heads and I would ask your Honours if you use this case not to use the headnote to see which way Justices went on particular issues.
The clearest passage is Justice Gibbs at page 88 where his Honour makes the point that if one did not allow that qualification to picking up State laws as they are, section 79 would rarely have any operation and the same, of course, applies to accrued and associated jurisdiction. That was the view taken by three Justices in that case, Justices Gibbs, Menzies and Mason. Justice Walsh took the opposite view and Justice McTiernan did not refer to the issue.
GUMMOW J: Justice Sundberg seems to have been the author of the headnote.
MR BENNETT: Yes, your Honour. As a matter of delicatesse I refrained from pointing that out to the Court. So those are our submissions on section 79. Before I come to section 58AA, may I just say this and this is point 5, that in relation to whether ASIC is the Commonwealth, that has been fairly fully debated and I do not want to add to the debate beyond saying this, that there is a convenient checklist in State Bank of New South Wales v Commonwealth Savings Bank [1986] HCA 62; 161 CLR 639 at 644 to 645.in which the Court distilled from Inglis v Commonwealth Trading Bank six tests. When one applies those six tests here all of them say that ASIS is the Commonwealth. I will not go through the six tests but it is a very convenient checklist. Your Honours need not go to it now.
CALLINAN J: Mr Bennett, where is the definition of "the Minister" in that Act, in the ASIS Act?
MR BENNETT: The ASIS Act?
CALLINAN J: Yes. Is there a definition of "the Minister" there?
MR BENNETT: It may be, your Honour, it is simply the definition - no, the definition would be section 19 of the Acts Interpretation Act - - -
CALLINAN J: That is what I was wondering.
MR BENNETT: - - - which directs one to the administrative arrangements which, in turn, say which Minister administers which Acts.
CALLINAN J: And which may change from time to time.
MR BENNETT: Yes.
CALLINAN J: That is why it is in that Act.
MR BENNETT: Yes, your Honour. That brings me to section 58AA and without detracting from my primary submission, it does not matter what that section says for present purposes, may I just say this, that the drafter of that section has specifically contemplated the sort of problem in this case and excluded it because whatever the words "jurisdiction in this jurisdiction" mean and whatever they were intended to mean, subsection (3) of section 58AA specifically says that:
The jurisdiction that courts have in relation to matters under this Law is dealt with in Part 9 of -
amongst other things, "the Corporations Act 1989" and Part 9 of the various Corporations ([name of State]) Acts. Under section 40(2) of the Corporations ([name of State]) Act specifically says that:
Nothing in this Division affects any other jurisdiction of any court.
So one can just read out anything in section 58AA that says, even if one could so read it, only particular courts can exercise these powers, because of the specific provision saying nothing affects the jurisdiction of any other jurisdiction of any court. Now, it does not matter whether they have said that or not, because it is implied by federal law, but it is a little unfair to the Victorian draftsman, or the general draftsman, to say that the section in some way conflicts. It specifically preserves it.
The second aspect is that the words "jurisdiction of this jurisdiction", if one does get to them, really flows from the definition of "court". We gave your Honours, this morning, a bundle of Acts with the Corporations Act 1989 on the front. Now, your Honours will recall that was the Act which gave rise to some validity problems because it dealt with the incorporation of companies. But may I just show your Honours this part of the history? If your Honours go to the third page of that bundle, your Honours will see the definition of "Court" in the federal Corporations Act was:
the Federal Court of Australia or the Supreme Court of a State or Territory;
When the new scheme was introduced in 1990 that was changed, and your Honours see in the next Act in the volume the definition of "Court" is any court "when exercising the jurisdiction of this jurisdiction" - that same phrase. That phrase is then explained in the explanatory memorandum, which is the next document in the bundle, and your Honours will see on page 96 of that memorandum, under the heading `Court', the author of the document says this:
The replacement definition reflects the fact that jurisdiction under the Corporations Law will be jurisdiction under the Laws of the various States and the Northern Territory as well as the Commonwealth (and not simply Commonwealth jurisdiction).
In other words, what was being said was, "Well, now are not having a Commonwealth Act, we are having an Act in each State. We have to have a different formula and that seems like a convenient formula, let us use that".
KIRBY J: Yes, it is the formula pre-Wakim.
MR BENNETT: Yes, but it was not a formula which was designed itself to be a term of art. If I could use the modern clique, they were intended to be "vanilla words", simply saying "as applicable to this State".
KIRBY J: At that stage there was no felt need for "vanilla", it was simply the words apt for the conferring by State legislation of jurisdiction on federal courts.
MR BENNETT: Well, your Honour, it was not a conferral of jurisdiction in this section as everyone seems to agree, but subject to that, it was thought to be appropriate words. But we would submit, all that they were saying was "when administering this Act", when exercising the jurisdiction in that sense and nothing more. But, as I say, at the end of the day none of that matters.
The only other matter I should mention, your Honours, is there was some discussion about section 64. It seems to us that section 64 has no application for the very simple reason that if it was to be applied, one would say the ASIC is not in the same position as a citizen because a citizen is only given the remedy if the citizen suffers a loss. It is clearly performing a governmental function in what it is doing and, to that extent, we would submit, section 64 really has nothing to do with the case. Unless there is some specific aspect your Honours wish to hear me on, those are our submissions. We do, of course, adopt the whole of our written submissions and I have not addressed on the State Jurisdiction Act.
GLEESON CJ: Thank you. Yes, Mr Jackson.
MR JACKSON: Your Honours, may I turn first to section 49 of the Corporations Act, the provision which was referred to by our learned friends this morning. The position, of course, is that section 49, which is the provision which was said to take away the jurisdiction under section 39B of the Judiciary Act in, with respect, the absolutely clearest terms, refers only to the position in the Australian Capital Territory, and that that is so, your Honours, appears from section 49(1) itself. Your Honours will see that it says:
This Division provides in relation to:
(a) the jurisdiction of courts in respect of civil matters arising under the Corporations Law of the Capital Territory; and
(b) the jurisdiction of the courts of the Capital Territory in respect of civil matters arising under any Corporations Law of a State;
and so provides -
so, of course, referring back to the two preceding paragraphs -
to the exclusion of -
amongst other things -
section 39B of the Judiciary Act .
Could I just invite your Honours to note one further thing about section 49(1), that it reflects of course an appreciation that not only the cross-vesting legislation might have been germane to the scheme as it was, but also that the Judiciary Act would otherwise play a part. The reference to section 39B of the Judiciary Act must have been a reference to the Federal Court. The third thing about it is that the provisions of section 39B(1A) to which reference has been made in this case were provisions which are later in time than the terms of section 49 of the Corporations Act.
Turning next, if I may, to something in connection with section 58AA, it is by no means an unusual thing to find expressions such as "laws", "jurisdiction", I suppose, in appropriate cases when one is referring globally to not only the laws of the particular polity which enacts a piece of legislation but also to laws made by other polities which are in force in that jurisdiction. One sees it, for example, in the observation of Justice Menzies in relation to laws in John Robertson 129 CLR 80. If I could give your Honours another reference in another context to a decision of the Court per Justice Mason in State Government Insurance Office (Q) v Rees [1979] HCA 52; 144 CLR 549. (at 564)
Could I just say one other thing in relation to that. We used the expression "geographical" to describe an operation of section 58AA. What we intended to refer to was the expression "jurisdiction of the jurisdiction" meaning by that jurisdiction referred to in the Corporations Law of Victoria as distinct from the Corporations Law of any other State. It is not a question about State or federal jurisdiction but the provisions of the law of Victoria as distinct from the laws of New South Wales or any other State but not, your Honours, to convey with it a second aspect, that one is speaking about jurisdiction being exercised geographically within Victoria and of course the coastal sea.
Could I come then to section 737 and section 739. I wanted to say a couple of things about them. The first is that section 737 is not merely a provision which confers power. It also identifies the persons who may apply for the exercise of the power - one uses the expression "power" - and one of them is the Commonwealth. Inevitably as a matter of construction of the Victorian statute, the Victorian legislature is accepting that federal jurisdiction will be attracted. It has done so not only in the provisions of sections 737 and 739 but in many other provisions - many other provisions indeed - of the Act.
Without going through the Act in any way exhaustively, may I just say that one sees in addition the provisions of section 1330. Section 1330 is the provision which empowers the Commission to intervene in proceedings and when it intervenes in proceedings it is said it is deemed to be a party in the proceedings, and thus of course one is speaking again of federal jurisdiction.
Your Honours, as I said I will not go through the provisions of the Act. There are many which refer to applications which may be made by the Commission or applications in which the Commission is made a party. But what appears from all those provisions, your Honours, is that, as a matter of interpretation of the Victorian Act it recognises that the jurisdiction that will be exercised - perhaps I should say something neutrally - in relation to the provisions of the Act will be both State jurisdiction and, on many occasions, a jurisdiction which is federal.
Your Honours, in speaking as section 58AA does of the "exercising the jurisdiction of this jurisdiction" and in referring specifically to two Federal Courts in that provision, what should be accepted, we would submit, is that the Victorian legislature is recognising that, subject no doubt to there being a suitable Commonwealth authority, that the provisions of the Victorian legislation will be the subject of proceedings in both the Federal Courts and in the State courts.
Your Honours, once one gets to that situation, it is very difficult to say, in our submission, that if one is looking at, say, section 79 that section 79 should be treated as in some way inapplicable because the very law that is to be brought in by section 79 recognises itself that one of the circumstances in which it may be applied is in federal jurisdiction. Your Honours, that is really the first thing I want to say concerning section 737.
The second thing, your Honours, is that one sees, of course, that in relation to section 737 and section 739 that they reflect what is to occur upon there being a contravention of section 615. If one goes to section 615, your Honours, one sees that what the provision does is simply to impose a prohibition upon the acquisition of shares in a company in circumstances not otherwise permitted by that part of the provision.
GUMMOW J: It is just a norm of conduct, like section 52.
MR JACKSON: Indeed, your Honours. I was going to say two things. The first is, as your Honour said, but may I come to that second - the first of them is, your Honours, that it is a provision for which there is prescribed a penalty. There is a penalty provided for a contravention of the provision.
The second thing, as your Honour said, is that all that it does is to provide for a norm of conduct. Now, your Honours, what is to happen and what the ambit of what may be done for a contravention of that, is then to be found in the provisions which are in Part 6.10 of the Act commencing with section 737.
Now, your Honours, I will not go through them, but your Honours will see that each of the provisions deals with - and this is where one comes to situations like Barrett - one comes to a number of provisions which indicate the types of orders that may be made and the circumstances in which they may be made. So that, your Honours, one has to take together section 615 and the provisions of Part 6.10, which include section 737 and 739, to find out, whether one calls it power or whether one calls it jurisdiction, what maybe done by any court in relation to a contravention of section 615.
Your Honours, what I was going to say also about them is that, if one comes then to the central provisions with which this case is concerned, section 737 and 739, what one sees from them is that section 737(1) gives power to make:
such order or orders as -
the court -
thinks just.
Section 739(1):
such orders as it thinks necessary or desirable to protect the interests -
Your Honours, those expressions, and particularly the first of them, seem to be no different from what is provided for by section 22 of the Federal Court of Australia Act, the provision which empowers the making of - I am sorry, your Honour. I should say, one goes to section 22 it provides that:
The court -
meaning the Federal 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 -
et cetera. Your Honours will see the expression "as the Court thinks just".
Your Honours, it is very difficult, in our submission, to say that if one is looking at the position of the Federal Court, the orders that it might make would be in any way different from orders that might be made pursuant to sections 737 and 739.
McHUGH J: Yes, the indication of section 58AA may have been a mistake.
MR BENNETT: Well, your Honour - - -
McHUGH J: There is some problem, is there, about the Commission, I think.
MR BENNETT: Well, not really, your Honour. Could I just say, what it is intended to do is really to do two things: the first is to say, particular things have to be brought in superior courts, not in other courts; that is the difference between small "c" and capital "C" courts.
McHUGH J: But it may be, if you are trying section 22, for instance, the Commission might have to prove some loss or something of that nature.
MR BENNETT: Well, in our submission, not, your Honour, because what one is doing is - your Honour, if I could put it this way, a special subject matter as it were. A special subject matter that arises because of a contravention of a particular provision. If one looks to see what is the right thing to happen in relation to a contravention, if I could pick up section 22, to:
grant, either absolutely or on such terms and conditions as the Court thinks just -
and I will mention the terms and conditions in the particular order in a moment -
all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim -
Now, your Honours, so far as the Commission is concerned, one has to bear in mind section 11(7) of the ASIC Act which gives by Commonwealth law the Commission the power to do the things that are referred to in sections 737 and 739.
McHUGH J: But your starting point is 615.
MR JACKSON: Yes.
McHUGH J: You can assume a breach of 615 and then 22 operates in respect of that breach. You may be right. It just occurred to me that maybe you do not have any legal or equitable claim unless you can prove some loss or some other particular damage, whereas 737, 739 give you a particular remedy.
MR JACKSON: Your Honour, can I say two things about that. One is a matter of the content of 615 and the other is what is meant by 22.
McHUGH J: Yes.
MR JACKSON: As to the first of those, your Honour, 615 is a shortly expressed provision and it provides a prohibition, which is of a positive kind. It then says it is breached by doing those things where not otherwise approved by that part or chapter, I have just forgotten which. But the nature of the potential prohibitions is elucidated by the circumstances in which it is lawful to do the things otherwise prohibited. So, your Honour, that gives a great deal of possible content to orders that might be made. One sees the nature of things. One sees the interests that are being sought to be protected and it is from that that the types of possible orders are indicated.
Your Honours, each of the provisions, when one goes to sections 737 and 739, speaks of making an order that is just in the circumstance, then one is talking about specific circumstances. But when one comes to section 22, this is the second point, it does speak of legal and equitable claim. But "legal", as would very, very frequently be the case in relation to federal jurisdiction, and in particular jurisdiction which is conferred in relation to matters arising under a law of the Commonwealth, would necessarily be not just legal rights arising under the general law as compared with, say, equitable rights, but statutory rights. When one speaks in section 22 of a "legal or equitable claim", it is not just speaking about causes of action arising under the general law.
In dealing with the question of orders, may I go to a matter that was raised by your Honour Justice Hayne, and that concerns the question of parties. I want to say, if I may, two things about the question of parties in relation to the matter. Before I go to that, could I give your Honours a reference - I gave the wrong one a moment ago - - -
GLEESON CJ: Why are you getting into this area? What is the relevance of this to the points that we have heard argument on?
MR JACKSON: Because it was raised by Justice Hayne and because what his Honour has been putting is something that, in our submission, does not quite represent - and the answers his Honour has been given do not quite represent what the true situation is. Your Honour, if I may do so - - -
HAYNE J: I have been verballed before, Mr Jackson, but that is pretty comprehensive.
MR JACKSON: Well, your Honour, may I take that as a compliment knowing that one day I shall pay the penalty for doing so.
HAYNE J: Indeed.
MR JACKSON: Speaking of penalty, could I give the reference to the penalty provision for contravention of section 615. It is section 1311. Could I just say two things. The first is, if one looks at the orders that were actually made, none of them, in our submission, affects any person other than by giving them additional money. Your Honours will see the orders set out in volume 1, page 137. The first order is a declaration that by entering into the shareholders agreement there was a contravention of section 615.
The second order was a further declaration to similar effect. The third was a declaration of misleading conduct. The fourth then is one requiring that there be a notice, referred to in order 4(d), sent to each offeree - and I am back to 4(a) - who accepted the takeover offer. The notice is to tell them they are entitled to withdraw the acceptance. Paragraph (b), each person whose shares have actually been acquired is entitled to avoid the acquisition. Then 4(c), those compulsorily acquired are entitled to avoid it.
Now, your Honours, one goes then to the provisions. If I could take your Honours to order 7, it says "Within 21 days" there is to be paid not to any individual, your Honours, but to the Commission a sum for payment to the shareholders who have accepted and who "have not exercised their entitlement" "to withdraw that acceptance" or who do not want to avoid their acquisition or "who have had their shares compulsorily acquired" "and have not avoided the acquisition". Your Honours, one sees in order 8, if that payment is not made to the Commission, then self-executing orders are made that Yandal dispose of the shares on the market, to put it shortly. That is the first thing. The second thing is simply this, that under the Rules of the Federal Court, Order 6 rule 7, the, in effect, plea in abatement, as it were, or the provision that says proceedings would fail for want of parties, is not effective.
Could I move from that to say something concerning section 64. Our learned friend's argument concerning section 64 seems to give it a differential operation when applied in a Supreme Court or when applied in the Federal Court. Now, there is, in our submission, no very good reason why the rights that would be applicable would be different in the Federal Court. Our learned friend's argument seems to involve an underlying assumption that the suit between subject and subject to which section 64 applies will be in State jurisdiction if brought in a State court.
Your Honours, that may well be so, in one sense, in the sense that one might be looking at a State body of law to see what the rights would be, but it certainly does not follow that that would necessarily be so. It may well be something that is in federal jurisdiction in any event in matters between subject and subject. If one looks at one of the leading cases on the application of section 64, which is The Commonwealth v Evans Deakin, [1986] HCA 51; (1986) 161 CLR 254, one sees that it is a case that really has similarities to the present. The legislation in question in that was legislation of Queensland which created a new form of charge available to subcontractors. Your Honours will see the summary of the legislation in the joint reasons commencing at page 261. In the first new paragraph on that page it describes the creation of the right and then, your Honours, at the top of page 262 in the fifth line:
Claims may be determined and enforced by proceedings under the Subcontractors' Charges Act in (inter alia) the Supreme Court of Queensland.
There was no reference to other courts in other jurisdictions. But one goes then, your Honours, to see, at page 264, how the matter was dealt with by the Court. If one goes to about point 5 on the page, their Honours say:
When an action is brought against the Commonwealth in the Supreme Court the condition for the operation of s 64 is satisfied. Once the suit is commenced the substantive rights of the parties shall be, as nearly as possible, as in a suit between subject and subject. If the Commonwealth were a subject, Evans Deakin, as sub-contractor, would, on the facts alleged in the statement of claim, be entitled to enforce the charge given by the Subcontractors' Charges Act.
Now, your Honours, what your Honours will see is that the provision in question was one that gave a limited class of persons the ability to apply in relation to the charge and your Honours will see also, in our submission, that if one goes to a case such as this the persons who might apply under either of the provisions in question are not simply the Commonwealth or ASIC but other persons as well. In circumstances of that kind, one looks to their position. They are the other possibility, subject and subject, and there is no reason why the course that they might take might not be brought over into section 64.
Your Honours, our learned friend, Mr Young, spoke of ASIC as both performing State powers and State functions but, of course, one sees that ASIC was exercising the powers under section 11(7) of the ASIC law. Your Honours, if one goes to what was said by the Court in Hughes 74 ALJR 802 at 809 and your Honours one sees in paragraph [33] of the reasons, speaking of provisions containing terms that are similar to those of section 11(7), your Honours will see, for example, paragraph [17] speaks of:
functions and powers expressed to be conferred on them by or under a corresponding law -
Then going to paragraph [33], halfway through the paragraph, what is said is:
However, what is involved in the federal legislation is more than consent or permission by the Commonwealth to the exercise by its officers of additional functions and powers derived entirely from State law. These additional functions and powers are imposed by federal law as a matter of duty or obligation -
The particular passage was the reference to "being imposed by federal law". That militates, in our submission, against the contention that in some way, if I may say so with respect, a little lacking in exact definition, in some way this body, established pursuant to the Commonwealth legislation and specifically empowered to authorise powers conferred on it by State legislation, is to be treated as acting otherwise.
If I could turn then to the submissions that were made concerning section 39B(1A)(c), that does not turn at all upon the ASIC being the Commonwealth. It is a separate head. ASIC of course represents the Commonwealth. But so far as section 39B(1A)(c) if one takes it by itself is concerned, one has a situation where at the very least a matter arises under a law of the Commonwealth because section 11(7) is in force and a federal law is the basis for the enforcement of the right given to ASIC. That is all that is required.
Could I also say - this is the next matter - that the Federal Court, as some of the submissions of our learned friends suggested yesterday, I think, has not decided the question whether order 7 should have been made, leaving aside any question of jurisdiction. What has happened has been that the only basis upon which the order 7 decision was made by the Full Court was the question of absence of jurisdiction. I will not take your Honours through that but your Honours will see it commences at page 187 paragraphs 13 to 23 of the judgment of the Full Court.
May I say one other thing, and it concerns the situation of how the Full Court's orders came about. When the Full Court gave its decision on 10 December, it invited submissions from the parties. Your Honours will see that at page 195 paragraph 34. Submissions were filed by ASIC as to the disposal of the money and, the matter being one of urgency, further submissions were foreshadowed. Your Honours will see that at pages 197 to 201. Then the further submissions were filed and they pointed out the consequences of the Full Court's approach and asked for the issue concerning jurisdiction to be reargued and urged that none of the orders other than order 7 should be set aside on the grounds contained in the court's reasons. Your Honours will see that at volume 1, pages 210 to 212.
Now, your Honours, what was contended for was that the question of jurisdiction had only been touched upon, most lightly, in the argument that had taken place before the court and was asked that the court reconsider it.
Your Honours, I will not go through the detail of it, but may I just say that the submissions we filed, in particular pages 222 to 224, did not ever suggest that there should be an order of the nature such as order 2 made by the Full Court of the Federal Court. Your Honours, could I, in that regard, finally refer your Honours to paragraph 16 of the Full Court's later reasons of 9 March at page 262 in volume 2. Your Honours, those are our submissions.
GLEESON CJ: Thank you. We will adjourn for a short time to consider the course we will take in this matter.
AT 3.36 PM SHORT ADJOURNMENT
UPON RESUMING AT 3.42 PM:
GLEESON CJ: The Court is in a position to announce that it is of opinion that the declarations made by the Full Court of the Federal Court of Australia on 9 March 2000, that is to say:
1. Order 7 of the orders of the court on 16 June 1999 is invalid for want of jurisdiction.
2. The Federal Court of Australia had no jurisdiction to hear and determine the proceedings brought by Australian Securities and Investments Commission against Yandal Gold Pty Ltd, Yandal Gold Holdings Pty Ltd, Edensor Nominees Pty Ltd, Normandy Mining Limited, Normandy Mining Finance Limited, Normandy Consolidated Gold Holdings Pty Ltd, and Normandy Mining Holdings Pty Ltd under the Corporations Law -
should be set aside and that the Full Court of the Federal Court of Australia should now hear and determine the appeal by Edensor Nominees Pty Ltd on the merits of the appeal, that is the matters raised by grounds 5, 6, 7, 8, 9 and 10 of the supplementary notice of appeal dated 24 August 1999.
Accordingly, in Matter M20 of 2000 there will be the following orders:
1. Special leave to appeal is granted, and the appeal is treated as instituted and heard instanter and allowed.
2. Set aside paragraphs 1 and 2 of the declarations made on 9 March 2000.
3. Remit the matter to the Full Court of the Federal Court of Australia for further hearing and determination.
4. The respondents to pay the appellants' costs.
Each of the other applications for special leave to appeal is dismissed and each of the orders nisi is discharged. In each of those applications there will be no order as to costs.
Yes, Mr Young.
MR YOUNG: If the Court pleases, there are two matters arising out of those orders we would like to raise. First, I think your Honour's announcement mentioned orders nisi. I do not think orders nisi were made, rather the applications for orders nisi were referred to the Full Court.
GLEESON CJ: Is that right?
McHUGH J: I thought Justice Hayne made them, but I may be wrong.
MR YOUNG: Yes, I think it is at page 342 and the applications for order nisi were referred.
GLEESON CJ: Then we will alter the order to say "each of the applications for orders nisi is dismissed".
MR YOUNG: Yes. Secondly, in relation to - - -
GLEESON CJ: Just before you move onto the second point. I will amend what I just announced as the order. Each of the applications for special leave to appeal is dismissed and each of the applications for order nisi is dismissed. Yes.
MR YOUNG: Secondly, in relation to the matter of costs, we would submit that the appropriate order should be a modification of that your Honour announced. We have sought likewise that the orders - declarations made by the Full Court are to be set aside, and that was the subject matter of our application. The parties have differed only in their view as to whether the reasons of the Full Court that went to matters of jurisdiction, on the one hand, or power, were correct or not, but all parties, certainly my clients, sought to have the orders made by the Full Court set aside, because it was our contention that they were wrongly made and jurisdiction existed and, in those circumstances, we would submit that the appropriate order should be, at the very least, that each party bear its own costs.
McHUGH J: But you could have come up and consented to the orders being set aside.
MR YOUNG: Well we did.
KIRBY J: You asked for it, I think, but this was an application for special leave so it was not within your gift to consider it.
MR YOUNG: Yes, that is so, but we sought to have the order set aside. If the Court pleases.
GLEESON CJ: Yes. Are there any other submissions anybody wants to make about the costs order?
MR JACKSON: Your Honour, I would simply seek to resist what my learned friend said and, may I just say in relation to that, that if one looks at the substance of the matter there was a distinct difference of view, whatever be the precise form, which the court's announcement means has been resolved adversely to the respondent, that being the question, the substantial question, whether, for example, there was jurisdiction to make order 7, which was the issue dealt with by the Full Court of the Federal Court and that issue was one which has been resolved against our learned friends.
KIRBY J: But surely that depends upon the ground on which that order is made, which is not yet revealed - - -
MR JACKSON: I am sorry, your Honour, I appreciate that, but - - -
KIRBY J: - - - because it is the case that, certainly Mr Hayes, and by inference, Mr Young, was seeking to have the order 7 set aside.
MR JACKSON: Yes, your Honour; they were seeking to have the order set aside in the court below.
KIRBY J: So they have got the order they wanted?
MR JACKSON: Well, your Honour, my learned friend says no, but, if one looks at the paragraphs of the Full Court's reasons, to which I took the Court earlier, one sees they said the substantial matter argued was the ability to grant the orders in question.
GLEESON CJ: Thank you.
MR MARTINDALE: May it please the Court, on behalf of Edensor I just wish to adopt Mr Young's submissions. If it please the Court.
GLEESON CJ: There will not be any variation to the order for costs as announced. .
AT 3.49 PM THE MATTER WAS CONCLUDED
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