Kelly v Arnison & Ors B104/2001 [2002] HCATrans 329 (26 June 2002)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane Nos B65 and B104 of 2001

B e t w e e n -

EDWARD KELLY

Applicant

and

MAJOR GENERAL PETER ARNISON, AO

First Respondent

PETER DOUGLAS BEATTIE

Second Respondent

DESMOND JOSEPH O'SHEA

Third Respondent

Applications for special leave to appeal

McHUGH J

HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON WEDNESDAY, 26 JUNE 2002, AT 2.26 PM

Copyright in the High Court of Australia

MR N. KELLY appeared in person. First of all I appear before you undressed, I am sorry. Up until 8 o'clock this morning I did not realise we were having a hearing today.

McHUGH J: That is all right. Do not worry, Mr Kelly.

MR KELLY: Thank you for that. Which matter shall I address?

McHUGH J: First, there is a motion - - -

MR KELLY: Of course, yes.

MR P.A. KEANE, QC, Solicitor-General for the State of Queensland: I appear for the respondents who are also the applicants on that motion, with MR G.R. COOPER. (instructed by Crown Solicitor for the State of Queensland)

MR KEANE: We are content to proceed on the footing that Mr Kelly's applications be dealt with first.

McHUGH J: Is it not a question of jurisdiction? The Court is under an obligation to see it has jurisdiction to deal with a matter.

MR KEANE: That is true.

McHUGH J: And your argument is that we have no jurisdiction because the applicant is no longer competent to bring these applications.

MR KEANE: That he has no standing to bring them.

McHUGH J: No standing.

MR KEANE: The Court has jurisdiction. The question is whether he can move the Court. Then the question is whether the Court will be moved, in any event, and the matters were - - -

McHUGH J: Yes, I think that logically this question of whether the applications are properly brought must be dealt with.

MR KEANE: If your Honour pleases.

McHUGH J: So, you have two summonses.

MR KEANE: We do, your Honour, they are dated 1 March 2002 and they are supported by an affidavit of Philip Keith Boustead. They deal with the applications in B65 and B104 of 2001. B104 is the proceeding which was instituted before the applicant's bankruptcy and that concerns solely the claims in respect of the costs orders.

McHUGH J: Is that right? I thought B65 was the one - - -

MR KEANE: I am sorry, your Honour. Your Honour is quite right, it is B65 that is the first one. That was the application that was filed before the bankruptcy. It concerned, solely, the costs orders.

McHUGH J: Yes.

MR KEANE: As to that the submissions we have made which, I think, are before your Honour, our submission is that section 60(2) and (4) operate so that these proceedings are stayed, there being no relevant personal injury or wrong - - -

McHUGH J: I understand. Your point is that it is a matter for the Trustee. He did not elect to prosecute or discontinue the action and B65 does not fall within section 60(4).

MR KEANE: Yes, and as to B104, the position is that section 60 does not apply because it was instituted after the bankruptcy - B104 - and as to that the Trustee has no interest in the case so far as it concerns the question of costs.

McHUGH J: He did have an interest but he has elected not to prosecute.

MR KEANE: Yes, that is so. The Trustee is actually represented, your Honours, by Mr McQuade.

MR P.P. McQUADE: If the Court pleases, I appear for the Official Trustee in Bankruptcy. (instructed by the Official Trustee in Bankruptcy).

McHUGH J: I am sorry, I did not - Is that so, that you did not elect to prosecute or discontinue the special leave application in B65?

MR McQUADE: No, your Honour, the Trustee has set out its position clearly in the affidavit and does not wish to make any submissions in respect of that particular appeal number.

McHUGH J: Yes, thank you.

MR KEANE: Your Honour, our submission is then, in relation to B104 - - -

McHUGH J: Your point is that it is all covered by Cummings' Case, which Justice Gaudron, Justice Brennan and I - - -

MR KEANE: Yes, your Honour. It is the joint judgment in Cummings Case of your Honour and their Honours, the majority judgment, and we have set that out in paragraph 8 of our written outline, your Honours.

McHUGH J: Yes. Mr Kelly, this is the downside of your bankruptcy, I am afraid. What have you to say about these submissions?

MR KELLY: I do not have the affidavit the Trustee referred to, but standing aside from that my position is these matters are public interest matters.

McHUGH J: It is not a question of whether they are public interest matters, I am afraid. It is a question whether or not, given the - - -

MR KELLY: My standing then is based on the Constitution of Queensland, section 53. I think it is (5) from memory.

McHUGH J: Yes.

MR KELLY: That is what I stand on. That is what I stood on when I brought it into the court at first instance.

McHUGH J: I understand that but it cannot prevail over the Commonwealth Bankruptcy Act 1986 . It is a State Act and by virtue of section 109, if there was any conflict then the federal Act would prevail.

MR KELLY: So far as it was constitutional, I suppose.

McHUGH J: I do not think anyone has yet doubted that the Bankruptcy Act is - - -

MR KELLY: Well, that particular provision.

McHUGH J: No. It has been before the courts on many occasions. Of course, as you will probably appreciate, this legislation only affects actions that it has been started beforehand and what you do afterwards is another matter altogether but I am afraid unless you have some persuasive argument to the contrary, the force of the section and the cases on it seem to be dead against you, Mr Kelly.

MR KELLY: I have two matters. B65, I think we heard, was started before.

McHUGH J: I appreciate that.

MR KELLY: B104 was not, it was started afterwards.

McHUGH J: Yes, I know, but so far as B65 is concerned, it is a case that comes straight within section 60(2) and it is the matter for the Trustee to prosecute the action. The Trustee has failed to prosecute or discontinue the application, accordingly, by virtue of 60(3), your special leave application is deemed to be abandoned and the only question is whether or not you could bring yourself within section 60(4), and Cox v Journeaux which is decided now, 67 years ago, is against that proposition.

MR KELLY: So the costs orders that were awarded by the Court of Appeal, which are reserved on in July and awarded by the Court of Appeal in 23 November 2000 which was after the bankruptcy and they are costs orders that I am informed that I have to personally - they do not fall within the bankruptcy. You are saying I do not have a right to appeal those?

McHUGH J: I do not who told you that you are responsible for these costs, you may or may not be, I do not know, but the fact is that in so far as B65 is concerned those orders are in favour of the parties that got the order. They can claim in your bankruptcy.

MR KELLY: That is right except they cannot claim for their costs because they were not awarded until after the bankruptcy. They do not fall within the bankruptcy at all, so I am informed by my Trustee.

McHUGH J: From that point of view then - - -

MR KELLY: They were reserved by the court, as I understand, and we have correspondence between us on this subject on a number of matters. Costs that fall, if you like, after the date of bankruptcy, which I think might have been the 19th, do not, as according to my Trustee, fall within the estate.

McHUGH J: Well, whether - - -

MR KELLY: Those costs which are reserved - sorry - were not brought down, if you like, in a judicial sense until 23 November. Brought down without notice to me, I might add, but that is another matter.

McHUGH J: I appreciate that but the point is that - - -

MR KELLY: How can I not have a right to appeal that?

McHUGH J: The reason is that because of the operation of section 60, your special leave application is abandoned. See, your problem - - -

MR KELLY: It seems illogical to me but I am just a normal person.

McHUGH J: It is not a question of it is illogical. In fact, it is perfectly logical. The legislation may be defective if what you say is right and the advice that you have been given is - - -

MR KELLY: The Trustee is represented here. I am sure he can verify that.

McHUGH J: It does not matter what - we are not here to determine that action but section 60(2) says:

An action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt, stayed until the trustee makes election, in writing, to prosecute or discontinue the action.

In so far as B65 is concerned, the order of the Court of Appeal was given on 16 July 2001 and your special leave application is caught by subsection (2). In so far as B104 is concerned, that was given on 23 November. That was after the date that you filed your debtor's petition but, according to our decision in Cummings' Case, that order is not something that you have an interest it.

MR McQUADE: Your Honour, I wish to make some submissions in respect of the other appeal, if the Court pleases.

McHUGH J: Do you?

MR McQUADE: Yes, and I have some of them written out and I have them here, actually.

McHUGH J: Sorry, Mr Kelly is not finished yet.

MR McQUADE: Sorry, your Honour.

McHUGH J: Yes, Mr Kelly.

MR KELLY: I am finished, actually.

McHUGH J: Well it may what is going to be said now supports you.

MR KELLY: Well, if we hold our breath, but I cannot for the life of me see how my appellate rights under the Constitution, I think it is section 73, can be totally annulled by section 60 of the Bankruptcy Act. I mean what am I supposed to do, wait for three years, have them chase me again and then start all over again? Is that what you are telling me?

McHUGH J: I am not giving you any advice at all.

MR KELLY: No, but that is the logical effect of what you are saying.

McHUGH J: It is a question of the application of section 60, but anyway, we will hear from the Trustee's representative. Maybe he has some submission that will be of assistance to you.

MR McQUADE: Your Honours, in a sense, in essence, the decision of the Court of Appeal which was subsequent to the bankruptcy had two elements. One was the cost order and the other one dealt with, really, the substantive appeal as the constitutional provision.

McHUGH J: Yes.

MR McQUADE: It is the Trustee's position that the cost order being made subsequent to the date of bankruptcy is not a debt provable in the bankruptcy and therefore has no concern to the Trustee, and there is a decision been referred to.

In respect of the substantive appeal, the essence of the Trustee's submission is that it is not of a proprietary nature which vested in the Trustee when the special leave application was filed. So, in order words, the right to appeal that substantive component of the Court of Appeal's decision was not something which vested in the Trustee.

HAYNE J: Why not?

MR McQUADE: Because it was not of the nature of property.

HAYNE J: Why not?

MR McQUADE: Because, when one looks at the construction of the provisions of the Bankruptcy Act, combined with section 558 and 116, one looks to the definition of what is property which vests in the Trustee and when one tries to look at it in the context of the object of the Act, property which vests in the Trustee does not include every right. It must meet, in the Trustee's submission, a character being of a proprietary nature, affecting property or one affecting property of the bankrupt or one affecting the administration of the estate. I have made reference there to the Full Court decision of Griffiths v Civil Aviation Authority.

HAYNE J: You say this does not affect the property of the bankrupt though the disposition of the substantive action, either at first instance or on appeal, would ordinarily carry with it consequences in costs?

MR McQUADE: Your Honour, if the appeal is prosecuted, if there is a subsequent cost order, those costs will not affect the bankruptcy estate because they are cost orders made subsequent to the date of bankruptcy. If the appeal, for example, your Honour, was in respect of - similar to the High Court decision in Cummings which affects or might reduce the costs which are proven with the bankruptcy, that is something which affects the bankruptcy administration.

Trying to look to determine the essence of the appellant's submissions, both before Justice Ambrose and before the Court of Appeal, there is some difficulty in ascertaining the actual nature of the case that was run but, in essence, it was, according to the decision of Justice Ambrose, a contention that the governors since 1987 had not been properly appointed or, alternatively, the issuing of the writ for the election was invalid. That is, in the Trustee's submissions, not something of a nature of property which would vest in the trustee which the trustee would perceive for the purpose of achieving the objects of the Bankruptcy Act, particularly to recover the divisible property.

The Chief Justice in the decision of the Court of Appeal on 16 July 2001 referred to the appellant's position as a "custodian of the public interest" and there was an italics reference there "to have this place run in a proper lawful manner" and that is not, in my submission, akin to property. It is not suggested that the appellant is bringing this appeal in respect of something which occurred in his business or in respect of some other proprietary right.

McHUGH J: Yes.

MR McQUADE: They are the Trustee's submissions, your Honours.

McHUGH J: Yes, thank you, Mr McQuade. Yes, Mr Keane. What do you say about B104?

MR KEANE: Your Honour, in relation to that we rely on the passage in Cummings v Claremont at 136 to 139 which proceeds on the footing that the right of appeal is not a right of property.

McHUGH J: Where is that?

MR KEANE: It is 185 CLR, your Honour.

McHUGH J: Yes, I have that.

MR KEANE: Page 137, the passage under the heading:

Do the appellants have such an interest in the purported appeals as to give them locus standi to institute the appeals?

That follows a discussion about the question whether there is a right of property vested in the Trustee and the majority judgment answers that question "no" and then goes on to say, amongst other things, at page 139 in the second last paragraph, halfway down:

The Court would be unlikely to permit the bankrupt to pursue his personal interests, in so far as they are not coincident with the due administration of the estate by the trustee, at the expense of the creditors.

Noting the provisions of section 178 which enable the court to review the decisions of the Trustee and, I suppose we should have started with the passage at about point 4 that says:

The bankruptcy courts acts as a screen which both prevents the bankrupt's substance from being wasted in hopeless appeals and protects creditors from vexatious challenges to their claims.

The situation is that we have a costs order against a bankrupt who now pursues an appeal in circumstances where his personal reputation and standing are in no way affected. It is entirely - - -

McHUGH J: What is put against you is that in so far as the Court of Appeal made an order for costs after bankruptcy - was the order made after bankruptcy?

MR KEANE: The order was made on - - -

HAYNE J: 23 November was it not?

MR KEANE: The debtor's petition was filed on 19 November so the costs order was made after the commencement of the bankruptcy.

McHUGH J: What do you say about whether or not those costs are claimable in the bankrupt's estate?

MR KEANE: Your Honour, we would submit they are claimable in the bankrupt's estate but in so far as there is an interest in any one to challenge that order, it is not in the bankrupt, it is in the Trustee, and the Trustee chooses not to.

McHUGH J: Yes, with the benefit of hindsight, it is most regrettable that these matters were not dealt with when the summonses were taken out instead of being referred to on the special leave application. Just excuse me.

Mr Kelly, our provisional view at the moment is that in so far as B65 is concerned, that there is no competency for you to conduct the special leave application and that it would have to be dismissed, but so far as B104 is concerned I think, having regard to what you have said and what has been said by Mr McQuade, that it is open to you to argue those matters. Do you want to say anything further about B65? The costs in that matter are costs claimable in your estate, it seems to me.

MR KELLY: No, the costs in that matter are costs ex my estate, so I am reliably informed by my Trustee. They were reserved. The original costs by Justice Ambrose in denying the application and the costs application are costs in the estate, I understand that. But the costs in relation to the costs application I brought to the Court of Appeal in July 2000 were reserved, even though the application was dismissed, and then ultimately they were landed on me along with the costs application of the appeal, without submission. In fact, I was not even invited to attend.

McHUGH J: Yes.

MR KELLY: They are costs that I have to deal with just like anyone else that comes to the Court. They are not part of the bankruptcy estate at all.

McHUGH J: So the situation now is that we have this curious situation where the costs before Justice Ambrose are - - -

MR KELLY: Costs in the estate.

McHUGH J: Costs in the estate, but in so far as there are costs and a costs order in both appeals, that is, the appeal that came before the court and presided over by the Chief Justice and the one presided over by President McMurdo, the costs in neither of those are claimable in the estate.

MR KELLY: That is right and B65 not only takes up the costs orders that concern Justice Ambrose so much as the special costs application, if I can refer to it like that. It also very much takes up the costs orders that were given or reserved in July and delivered in November after the bankruptcy by the Court of Appeal and I cannot for the life of me see how I should not be allowed to appeal that. If I can just make one other point. I am no expert on the Bankruptcy Act - - -

McHUGH J: I think if you might proceed to put your arguments of substance on them.

MR KELLY: Right. Should I start them with B65?

McHUGH J: Yes.

MR KELLY: I do not have the appeal books because of the circumstances I described this morning, so I am sorry I cannot refer you to those but the Court has them and I will just do the best I can without them.

McHUGH J: Yes.

MR KELLY: Your Honour, can I take you firstly to the Act in so far as it relates to special costs applications, which is section 49 of the Judicial Review Act. The costs application that I made in July I made as what they call the 41A applicant. If we go down then, having established my right to make that special costs application, the next phrases underneath (c) read "the court may make an order -". Your Honour, there are two orders the court can make, two statutory orders. The first one is (d):

that another party to the review application indemnify the relevant applicant in relation to the costs properly incurred in the review application by the relevant applicant, on a party and party basis, from the time the costs application was made.

The second one is (e), that:

a party to the review application is to bear only that party's own costs of the proceeding, regardless of the outcome -

I say the construction of this is once you fall within section 49, and there are some circumstances where people who can make a judicial review application may not fall within either (a), (b) or (c), but in my case that is not relevant because I fall squarely within 41A. Once you fall within that, then the court has a discretion if you like, a statutory discretion not a general discretion, to make one of two potential costs orders. That is what I did when I went before the court in July. I asked the court to reconsider, if you like, a special application in relation to the appeal.

When I first appeared before Justice Ambrose in February, Justice Ambrose found, basically, that the case that I was arguing before them, in his terminology was "faintly arguable" and what he was alluding to was he was then looking at the grounds that the court has to have regard to in relation to exercising its jurisdiction that we just discussed in 49(d) and (e) and he was talking about in that case, (2)(c).

When I went before the Court of Appeal I put an affidavit, which is in the appeal books there somewhere, that included not only the transcript of Justice Ambrose's decision in relation to earlier cost application but it included a transcript by Justice Muir which had been delivered some time after February, I think it was in May, in a matter called Skyring v Australian Electoral Commission and Mr Skyring was deemed to be a vexatious litigant and his application never got past that point. What was interesting was Justice Muir found the questions that Mr Skyring was agitating interesting and he gave a fair bit of analysis to the matter I had, if you like, on before Justice Ambrose.

The bottom line was, I think on page 8 from memory, he used the words, I do not regard this matter as "unarguable". So, we had Justice Ambrose saying - - -

McHUGH J: I think it was Justice Muir, was it not?

MR KELLY: That is right. We had Justice Ambrose in my matter, Sharples v Arnison, saying these matters are only faintly arguable - - -

McHUGH J: I am not sure that he actually said that himself. Did he not say that counsel had conceded, that is counsel for the other side, had conceded they were faintly arguable. I think that is what he said.

MR KELLY: I do not think that is correct, with due respect. The other thing to be considered here is to the best of knowledge counsel for the respondents never made a strike out application before Justice Ambrose. So it was not like normal judicial reviews, they did not seek to strike it out on the basis that it was frivolous or vexatious or anything like that, they argued that it should not have been brought in relation to an election and they argued all sorts of other matters, but they did not argue the 48 matter which says, "Hey look, this should not even be before the court, strike this out". I think Justice Ambrose arrived at that conclusion himself. The other words that I wrote down was he said, there was little likelihood of success.

In any event, I went before the Court of Appeal in July and what I said to the Court of Appeal, quite plainly, was, look I am not back here being vexatious. There has been another judge in the Supreme Court system, Justice Muir - quite independently of any application I have got -who, auxiliary to looking at the Vexatious Litigant's Act how a look at the same matters and decided, at least, that they were not "unarguable". And those were his very words. I think my words to the Court of Appeal was, "On the strength of that there is a difference of judicial opinion and that should be enough for me to pass the basic test that is set down in section 49(2)(c)" and that test is whether there is a reasonable basis.

McHUGH J: Yes, but that is merely a matter that is to be taken into account. The court has to have regard to it. It does not mean - - -

MR KELLY: That is right, it has to have regard. I would like to come back to it. I just wanted to make that point though so that I can build on that if I may. That is right, the Judicial Review Act when it was brought down was indeed a new piece of legislation. In fact, as I understand it, it still stands as a unique piece of legislation in regard to court costs in administrative matters in this State. What I am saying is I do not think there is any other State in Australia or the Commonwealth that has actually passed a similar section. I am just quoting from an administrative review report in Queensland. It reads, "Section 49 embodies the last of the great changes to the procedures governing judicial review of government action under the law of Queensland. As EARC commented, the section makes a significant change to the usual position that costs are determined at the conclusion of a case and normally follow the event."

In other words, the loser pays principle. And then EARC went on to make various comments which I cannot put to all the Court in 20 minutes but what I do put before the Court is it was a novel section and it was not something that happened in a short space of time. As that section says, the Judicial Review Act was, in fact, the last piece of legislation over virtually a five year period growing out of the Fitzgerald Inquiry.

McHUGH J: Yes, but what you have to deal with is the fact that this is a discretionary judgment and as you are probably aware - you have, by now, fairly extensive legal experience - discretionary judgments are very difficult to appeal against and particularly in this Court. So, you have to show some error in the exercise of the discretion in the Court of Appeal, in its judgment, that is sufficiently important to warrant the grant of special leave. Now, what is your - - -

MR KELLY: The error is that this discretion is a statutory discretion, it a limited discretion and there are only two options at the end of the day. If you have a look - I do not mean to jump about - but if I could just draw your attention to one of the earlier cases and still regarded as one of the most relevant cases in this particular matter, which is Anghel v Minister for Transport (No 2). Both Justice McPherson who was the judge, of course, in the final Court of Appeal in the matter we were just speaking about, and Justice Fitzgerald, at the time, had this to say and it was simply this: "Section 49 of the Judicial Review Act displaces Order 91 of the Supreme Court Rules." That will be a different number from the uniform procedure rules that operate but it operates in the same way, it displaces the normal rules to costs. That was the parliamentary intention of it. So far as an application that falls within section 49, what I am saying to the Court is the discretion is a limited statutory discretion, it is not a general discretion, it is not an arbitrary discretion and even if it was it would have to be operated on some fair and reasonable basis, but it is not any of those things.

McHUGH J: No, but any statutory discretion is exercised - - -

MR KELLY: It is a discretion that says you can do one of two things.

McHUGH J: No, that is the result. It is a question of what factors that you can take into account and ordinarily you can take into account any factor that is not inconsistent with the legislation. This legislation directs the Court to take into account certain matters, on which you have addressed us, but that is not the end of it and even if you satisfy each of those, the Court then has a general judgment as to whether or not, looking at the matter overall, an order should be made. This subject matter is quite special, unique, I think, as you would probably say, but statutory discretions are as common as anything else in the law.

MR KELLY: But it is within the terms of the Act. It is within the terms of what Parliament did. What is quite clear when you read the material of EARC, which was the body that proposed this legislation, is that, and if I can just read a small bit, it says: "Section 49 breaks new ground. It was appropriate for the legislature to provide some guidance as to the exercise of the discretion." And they did provide that guidance in (a), (b) and (c).

There are cases that say the Court can take other considerations into account as well as those, but if you have a look at the wording of the Act, if you go to (a), it says the financial resources of "the relevant applicant or any person associated with the relevant applicant". Then, on the end of it says "and". When you go to (b) and you read through that and it talks about public interest, at the end of that it says "and". When you go to (c) it talks about reasonable basis, at the end of that it says "and". My submission is those are mandatory, they are important words, it is saying, "You must consider this, you must consider this and you must consider this."

McHUGH J: There is no doubt about that, the court must consider each of those four factors.

MR KELLY: And that is how they have to weigh it up. They can change the weight in between them and in fact there is quite a screed in EARC as to how they perceive the court might go about doing that and what sort of likely outcomes might go about.

What happened in my case and what happens regularly in judicial review in Queensland with this section, is this. You get eliminated, not on (a) because I clearly met that, no-one even suggested otherwise. There was some chat about (b) but generally speaking I believe that there was no serious opposition to that. You are eliminated on the basis of what is called a "reasonable basis" and that is it. That is why this is so important.

Let me quote you from a couple of other cases because we should deal with real life as it happens. Cairns Port Authority, Justice Thomas, who was on the costs review, in that case - and he was just giving a judicial instance:

Bearing in mind the nature of the judicial review litigation, the extent to which there is in a public aspect to proceedings, the potential for oppressive multiple cost orders, it will often be the case that the limitation of costs in which an unsuccessful party has to pay will be an appropriate exercise of this very wide discretion entrusted to the court.

That is an instance. In the case that we talked about before, Anghel v Minister for Transport, they got stuck into the original judge in that because that was the Court of Appeal because whilst he did not order against the applicant in that matter - and I might say that application was struck out under section 48. I mean, it never even got an airing. No costs are awarded because he said, well, you know, there was difficult areas of law to be considered. The Court of Appeal said, no, that is wrong, the judge erred in law in that because he was using his exercise of general cost discretion when he should have been using his exercise of cost discretion under section 49.

Justice Fitzgerald then said, "Look, here is a couple of other instances that I believe this might be used" and he said - I do not have it highlighted because I just got it. There are a number of instances quoted in that judgment where he clearly sets out that it would be appropriate, even for an unsuccessful litigant, at the very least not to be ordered to pay any costs.

McHUGH J: The real - - -

MR KELLY: The real problem - I know I have only a short amount of -but the real problem is this. Here is a couple of other cases. These are actual cases, Sharples v Queensland Law Society, classic case which we do not have time to go in to but the end result is the respondents there, who the judge accepted might be withholding - - -

McHUGH J: Your time is running out and can I put to you what seems to be the critical point against you and that is that at page 84 of the book Justice Ambrose said:

I would regard a "reasonable basis" as being established if there was at least a likelihood of success or if it was thought to be seriously arguable as distinct from being faintly arguable -

Now, what is the matter with that?

MR KELLY: The matter with that is that he is attempting to ignore my financial status, he is giving no weight to that whatsoever under the relevant subsection. He is ignoring the public interest element of the constitutional point and he is simply saying, "You have no chance of winning this so I am just going to completely ignore all that I am required to look at and I am going to eliminate you on that basis. I am going to give all the weight to that, forget about all the rest of it like it never, ever happened." The same judge, years before had a person - - -

McHUGH J: But it is not uncommon for the judges - - -

MR KELLY: It might not be uncommon in general jurisdiction, although it ought to change but that is another matter, but in this jurisdiction it was specifically designed by Parliament - this is what the Judicial Review Act is all about - one only needs to read the second reading speech to the House:

Accordingly, the Judicial Review Bill seeks to reform the law relating to the review by the Queensland Supreme Court of administrative decisions and actions of public officials in Queensland.

Upon enactment, the Bill will confer an important new right on persons aggrieved by administrative decisions -

The Bill also provides that the Supreme Court has a discretion to make special orders as to legal costs, on the application of a party, at an early stage in the proceedings. For example, the court may order one party to indemnify the other party or that one party is to bear only that party's costs of the proceedings, regardless of the outcome . . . This provision will assist less wealthy parties who have a meritorious case but are afraid of losing the application and therefore paying the legal costs of both parties to the proceedings.

I am please to introduce this Bill to the House today because it provides an average citizen with a simplified means of ensuring accountability and fairness in public administration . . .the Fitzgerald

inquiry, et cetera. The deliberate parliamentary intent of this Act and these sections - - -

McHUGH J: One can appreciate that, Mr Kelly, but the point is that the legislature directs the judge to look at four things: financial resources; whether the proceedings involve a public interest and whether the proceeding discloses a reasonable prospect of success. If you cannot satisfy those four matters then it is open to a judge to say - or one of those four matters - it goes out. It would be absurd that simply because, for instance, your financial resources were nil, the judge had to make an order.

MR KELLY: No, it does not say that. I am not suggesting that.

McHUGH J: No.

MR KELLY: What is says is that in those circumstances due weight will be given; in those circumstances due weight will be given if there is a public interest element. There was a clear public interest element in this matter. As for the concept that it was unarguable, I mean, well, we are going to argue about that in a minute so I had better not say too much more. But the point is that if you do not give special leave to this, what you will effectively do - and I can tell you without a shaddow of a doubt - the Judicial Review Act could be taken and thrown in the garbage bin, where it is currently, in the Supreme Court of Queensland.

I kid you not, there is not going to be any review of anybody in this State and there needs to be but there is not going to be any review if every time you walk in the doors of the court you are stopped in the first instance because you make a cost application - it is your statutory right to do so - because of some hairy fairy, it is unarguable. If it was unarguable, why did not the respondents, who are well funded, come up and say, "Strike it out."? They did not try that in the Court of Appeal. They said, "We want security for costs" because they knew they could not strike it out on the merits. I mean, they are not slow in striking things out when they can solve the problem. The judge just did not exercise his jurisdiction properly.

Justice Ambrose had a chap called Paul Graham Ford before him in 1997. This person was funded. He challenged his legal aid application - because none of us can ever get that - and he lost, but Legal Aid paid for the challenge - good on them. Justice Ambrose's discretion under the Judicial Review Act at that stage was, "I exercise my discretion" - and he lost, this chap, he was thrown out before he got started - "I make no order as to costs." There is no consistency of judicial opinion as Justice McKenzie likes to suggest.

McHUGH J: That is the very thing about discretions. On the same body of material you can get two or three different answers, quite properly.

MR KELLY: Quite properly?

McHUGH J: That is the whole thing about a discretion.

MR KELLY: If it was a unilateral, unfettered discretion, perhaps then we would have to talk about proper basis. This is a parliamentary intent discretion. There are only two options available to you if you come within this provision and the idea of (a), (b), (c) is to work out which of those two options the judge should exercise his discretion on, not to throw you out and order costs against you. That is the bottom line.

McHUGH J: Well, your time is up on this one, Mr Kelly.

MR KELLY: Thank you.

McHUGH J: I think it is best then if you proceed to 104.

MR KELLY: Can I have a few secs?

McHUGH J: Yes. Yes, go ahead.

MR KELLY: This is so big 20 minutes dwarfs it but I will give it my best shot. The Constitution of Queensland is where I would like to start but perhaps I should say this first. This country developed differently, in my submission, from many others. Right at the very start in this country when we got our Constitution we had section 128, we had referendum and referendum has grown through various constitutional ways in this country from 1901 up until today, and that is the basis of the way very much that we run our democracy in this country. The objection that I have to what has gone on is based on the fact that a referendum was deliberately, in my opinion, thwarted by the powers to be at a particular point in time.

Going back in history then, briefly, and I am talking Queensland history: in 1917 there was a referendum held to abolish the Upper House of Queensland. The people of Queensland, some 63,000 of them, said, "We want to keep it." Some years later the Labour Government in power at that stage, for reasons known to them, had the numbers and abolished it anyway regardless of what the people wanted.

McHUGH J: Abolition was upheld in McCawley's Case.

MR KELLY: Exactly right, they had the power. We then progressed on and they entrenched that power in 1934. The in 1977 another political war broke out between the premier of the day of Queensland and those who he thought were trying to subvert the State powers, or at the least the Queensland State power in Canberra, and he organised a group of people including Attorneys-General from most States or premiers to go across and see the Queen in England and as I have it, and I understand it to be correct, he received advice from the government department over there as to how he might frame the Queensland Constitution to prevent the problems that he saw happening. And they did. They brought in a Bill called the Constitution Act Amendment Bill 1977. There does not seem to be must suggestion that the government of the day did not have power to do that. They brought it in properly and they entrenched it and they put certain sections into the Queensland Constitution to ensure that the Governor, and I suppose all the objectives that Mr Bjelke-Petersen wanted to achieve, would be laid down.

What then happened is a short time later there were a number of conferences - I had a fair bit of material I had hoped to refer to but, anyway, the short of it is that there were a number of State conferences and all the State bodies were invited to Canberra and, we do not know exactly why but I suspect they were told they could have omni-powers under the Australia Act. In any event what happened was the Commonwealth got together with all the States and decided they would bring in the Australia Act. There was a lot of uneasiness about who had the power to do this and how it should be done and whether it could be done, and so on and so forth. So they developed a scheme where the United Kingdom would - - -

McHUGH J: I think you can take it that we are familiar with it but what you have to demonstrate is that you have a case that has sufficient prospects of success showing that this legislation provided for the abolition of or the alteration of the office of the Governor of Queensland. That is the critical question and it may be that on one view you are right in saying that they used the device of the Australia Acts to get around matters. That is debateable but maybe you are. Supposing you are right on that, how does that affect the situation?

MR KELLY: You cannot subvert a Constitution, that is basically what it is. There was a referendum provision - - -

McHUGH J: Yes, and this is a State Constitution and you have - - -

MR KELLY: Yes. You cannot subvert the referendum of a State Constitution under the Commonwealth law because you have 108, you full faith in credit, and even though we talked about this before saying that Commonwealth legislation can override State legislation, it cannot override the Constitution itself and that is what this is about.

Section 51(xxxviii) was subject itself to the Constitution. It was subject to all the State provisions: 108, 109, full faith in credit, and it was also subject to 128. My argument is, as you have seen from the papers, that at a Commonwealth level, the Commonwealth never had any power whatsoever to pass the legislation that it did, either to request England or to bring in the Australia Act because I did not hold the referendum and it certainly did not have any power to subvert the State Constitution or the referendum provisions that were in the State Constitution.

McHUGH J: There is hardly any doubt, is there, that Queensland had the power to refer the question? You claim they did not, that is, to refer the power to the Commonwealth.

MR KELLY: Before the Commonwealth could even act under section 51(xxxviii) it had to have request and consent from every State in Australia.

McHUGH J: Yes.

MR KELLY: We have been down this once before, judicially, in Queensland, from my understanding of the authorities. In that case the Court of Appeal of Queensland said, "Look, do not worry about any of those arguments because none of those are relevant. What is relevant is the power of the United Kingdom to pass the Australia Act UK. That is really the bottom line, forget about all these other arguments because we are not even going to listen to them."

McHUGH J: That is right. Section 13(3) of the United Kingdom Act is another problem you have to overcome.

MR KELLY: Why, what is the problem? They were long gone.

McHUGH J: You may say they were a foreign power and Sue v Hill supports you on that but the question is whether their legislative power had gone and that is a different question altogether.

MR KELLY: My submission is simply this and it just cannot be gotten around in my opinion. I mean, to deal with the top of the tree is that the United Kingdom somehow had power in 1986 to pass legislation that was going to have effect in this country at a Commonwealth and State level is to suggest that the United Kingdom still has power. I mean they may as well send the Australia navy to the Faulkland Islands or something, I mean that is how ludicrous that is.

McHUGH J: Even in my professional life time the British Parliament passed laws that applied to Australia. They amended the shipping legislation, for instance.

MR KELLY: Quite right, and there was a point where that was no longer possible because, as I put in my submission, the Constitution of this country devolved. There was no question that it was a Constitution designed in 1901 for a foreign power to still have control over us and that is the way we wanted it too, from what I can see. But history changed that, as we have already discussed in Sue v Hill, by evolution.

McHUGH J: What it changed was the political standing of the United Kingdom but it did not change its constitutional power. If, in 1985, Great Britain had enacted legislation for Australia, I cannot see how this Court could have ignored it. Justice Murphy would say the Court could but I do not think any other Justice of the Court ever suggested it.

MR KELLY: I have some sympathy for Justice Murphy although I do not put the point of time as 1901. Well I do, as I say, that after the Second World War there was a massive change in this country. I mean, the Westminster Adoption Act was simply a knee-jerk reaction to the legislative uncertainty, if you like. at a Commonwealth level that was supposed to be operating. It did not seem to me when I looked at this historically to be much uncertainty about England passing the Statute of Westminster We already assumed all of that anyway, they simply just put it in a legislative basket.

What did happen was evolution - and this where is I think we just have to get down to tin tacks - evolution takes place sometimes bit by bit, sometimes in bigger bits, but at the end of the day there is a final straw, there is a final thing and that is it. It does not have to a gun battle or a Bill Skase job, we did not work like that here. What happened was after the war we adopted the Westminster Act, or backdated it, and then we started to get on with our own affairs in a way that cannot be disputed. It set us aside from any further legislative control by the United Kingdom and we did that, most significantly, by passing section 10 of the Australian Citizenship Act in 1948.

That is my submission. I reckon that is exactly what happened and thereafter the Constitution that we had inherited became ours, it devolved. And the grundnorm from that time was section 128. I mean, there is no way the people that the people of this country would ever accept, now or in 1986 if they knew about it, the concept that a power, be it the United Kingdom or any other power, could make legislation for this country. If it is true - - -

McHUGH J: Given the results of the recent referendum, I am not so sure that you can make that assertion, Mr Kelly.

MR KELLY: Why not? They did that properly, they asked the people for a referendum.

McHUGH J: Yes, I know, but - - -

MR KELLY: They did not do it properly with the Australia Act, they did not want to have a referendum and the reason they did not want to have one is they knew they would not get it.

McHUGH J: What I am putting to you is I would not be so certain that the Australian people would complain about the United Kingdom legislating for this country. You may be right.

MR KELLY: I think you are wrong about that.

McHUGH J: I know, all I am saying to you is I would not be so sure as you appear to be.

MR KELLY: I am sure because of this. If the logic is - I mean, it is just stupid, to be blunt. If the logic is that the United Kingdom in 1986 can pass any form of legislation that affects us at a Commonwealth or State level, and if that is true then that is unfettered power based on the previous legal history, and what they can give they can take back which is why we have had all this uncertainty anyway. So, if they can take it back then why cannot they pass legislation now to send the Royal Australian Navy to the Faulklands? Or why not next year? It is no longer logical for courts of this country to be even thinking that way, let alone seriously suggesting that such a situation could happen.

Evolution has happened. The Constitution devolved at some point. Now we have not yet decided that but I have given you my submissions as to when I believe it was and I have put a bit of a research into it. But whether I am right or wrong, it sure as hell happened a long time before the Australia Act. To then wash away all the other things that were wrong about whether there was any constitutional power for the Commonwealth to be passing this sort of legislation and simply say, "Look, we have got this mother country over here that can still do - if we have any problems we will just get them to pass a bit of legislation". I mean, why do they not pass a referendum requirement, we will not have to worry about the Constitution, we will just get the United Kingdom, the Queen to rubber stamp it, and we can have a referendum without trying. Because the people of this country would not put up with it, as docile as they are.

McHUGH J: Sixteen years ago Mr Keane's predecessors around the nation and the Commonwealth Solicitor-General took the view that this legislation was necessary and the UK could still legally legislate, and so did the United Kingdom Parliament. You had the same problem in Canada. The UK Parliament legislated in respect of Canada, within the last two decades.

MR KELLY: That is ridiculous. But if I am wrong then this here, right, says - and this is the 1977 Act in the Queensland Constitution which was reserved for Her Majesty's pleasure and which, as we are told according to the Queensland Government Gazette on Tuesday, 5 April 1977, obtained Her Majesty's pleasure and not just Her Majesty, the Queen Mother and the Royal Highness, Princess Anne, the whole lot were there. If that is the case, and Britain still does rule, then what Bjelke-Petersen did was right and he had, and the Queen had, and the Governor had no right to make any Act, request and consent Act to the Commonwealth for any change to take place. And I will say it, the United Kingdom had no right to pass legislation that was properly put in place by Her Majesty through the necessary channels that happened in 1977.

Either way you come back to the fact that the Queensland Constitution was subverted. The Queen does not sit above the law, nor does the King even though heads used to roll, it is the Queen in Parliament acting on behalf of her people. She gave assent, quite properly, to this piece of legislation that embedded these provisions into the Queensland Constitution. The government of the day did it to protect their people. Right or wrong, it does not matter; they had the manner and form, they did it. She would not do it. That is why they never sent it to her. The reality is, the facts are, that when the Australian Act came around the same chap that organised this and the Governor that was there of the day, did not even send the legislation across to the United Kingdom for approval.

Look, it is subversion. The Acts that I brought in here to refer you to, and you only need to read them, are - I cannot pronounce it properly, it is an Indian name, but it is Prasad I think, it was the recent Court of Appeal in the Fiji Islands. You only need to read that or if you want to go back a bit further in history read the one about Southern Rhodesia, however you pronounce that? It is [1968] UKPC 2; [1969] 1 AC 645. I mean, you cannot subvert Constitutions, it is just not on. It never has been on British in history and that is what did here, either way, but fundamentally, just to finish off, is the point here.

McHUGH J: That is the question, whether there was a subversion? You have a State Parliament which enacts law. It is entrenched only by reason of the Colonial Laws Validity Act. Once the Colonial Laws Validity Act, the Queensland Parliament can do what it likes. Now, the Australia Act provisions say some parts of the Colonial Laws Validity Act or at least re-enact them in substance, but - - -

MR KELLY: So, it was the Australia Act that abolished the Colonial Laws Validity Act? Is that what your Honour is saying?

McHUGH J: Yes, I think it was from recollection.

MR KELLY: Which Australia Act?

HAYNE J: Does it matter?

McHUGH J: Does it matter?

HAYNE J: We have two acts, identical. What does it matter, Mr Kelly?

MR KELLY: Which one?

HAYNE J: I am not here to be questioned here by you. What does it matter? Why does it matter?

MR KELLY: Because it is executive authority instead of constitutional authority, that is why it matters. There is nothing wrong with the 1999 effort because the referendum was sought. Whether the people passed it or not, it was up to them. We followed the Constitution. But in 1986 we did not and we cannot support it on Commonwealth law, and I believe this Court knows that. I believe the Court of Appeal knew that.

HAYNE J: Mr Kelly, do not attribute views to this Court that are not recorded in judgments.

MR KELLY: Okay. Well, let me put in like this - - -

HAYNE J: And do not, and do not attribute my silence through your argument as some implicit assent to the propositions you put.

MR KELLY: Right.

HAYNE J: I am here to listen to your argument.

MR KELLY: Thank you, your Honour, and I do not mean to be disrespectful.

The problem that I have, getting back to the Court of Appeal judgment, is this. Justice McPherson made a statement about - and it was probably the key thing in the whole judgment, and the statement was simply this, that the United Kingdom Parliament was the source of power for his judgment. There was no debate about the other issues that I have been on about so they never got properly analysed. Really, the whole judgment hinges on that thing and that is really the question. That is what I dispute.

McHUGH J: I understand your dispute.

MR KELLY: That is all I need to dispute, I suspect, in that judgment really.

McHUGH J: You will probably accuse us of being conservative lawyers who look to the old legal system and tradition but the professional view was that England could legislate for Australia in 1987 and that was why those Acts were passed, both in the United Kingdom and all around this country. Queensland enacted the Australia Request Act, whatever the name of it was, so did every other State and ultimately the Commonwealth enacted the Australia Act.

MR KELLY: Your Honour, the Queensland Request Act, if I may say this - - -

McHUGH J: Sorry, it was the Australian Request Act, was it not?

MR KELLY: The Australian Request Act and the Commonwealth Request Act do not mean anything in relation to what we were discussing because - - -

McHUGH J: It was the Australia Acts Requests Act.

MR KELLY: What we have to get down to in law is this, they do not really mean anything, it is just a convention, because if we are talking about the power of the United Kingdom to pass legislation then none of that is relevant. You only need to read the authorities in the Court of Appeal of Queensland when this was brought up last time and I can understand the logical of that. I mean, if this power is an omni-power overseas that is not bound by Constitutions here, or whatever, then it can do whatever it likes, it can pass whatever law it likes - Blue Eyed Babies Act or any other Act it wants, I accept that. But what I do not accept is the proposition that that can be the case in law that in 1986 the United Kingdom did have that power.

So, the Acts Requests Act and all those things might become important in relation to the Commonwealth power but as I understand the legal side of it, they are not particularly important in relation to the principle that the United Kingdom Parliament has power because if we are to follow that tradition of law then it really does not matter what conventions they might have had with the States of Australia, they simply had power to do whatever they wanted to do and they did it. It does not matter what referendum requirements were in the Australian Constitution and it does not apparently matter what referendum requirements were in the State Constitutions because it was a omni-body. That is the principle that I object to.

The whole argument of the Court of Appeal is founded on that. There has been no real analysis of anything else because once we get into the other analysis then all these other things do become terribly important. But what I say to you is this - time is virtually up - is that if that is true and this is the time to decide it because if this is thrown out now then it will be true forever - if that is true - - -

McHUGH J: Special leave applications decision are of no force and effect whatever except in terms - - -

MR KELLY: Well, no one will ever come back so you will effectively make sure that they are.

McHUGH J: They are not precedents.

MR KELLY: The decision is yours. I mean, that is why you are the High Court. That is the fundamental thing that I would challenge because I say this: if that is true then, then it is true today, and why will it not be true next year or the year after. I can see no reason why there is not a logical progression of that.

McHUGH J: Yes, thank you, Mr Kelly. We need not hear you, Mr Keane.

The Court has before it two applications for special leave to appeal and two summonses to have those applications for special leave struck out or dismissed on the ground that the applicant was made bankrupt as a result of his own petition filed on 19 November 2001.

Given the arguments of Mr Kelly, there must be real doubt as to whether or not the respondents could make out a case that the special leave applications are incompetent for want of interest or standing. However, it is unnecessary to reach any concluded opinion on that matter because, in our opinion, notwithstanding the passionate arguments of Mr Kelly, both matters have insufficient prospects of success to warrant a grant of special leave. Accordingly, the application is dismissed. In the circumstances, I would not make any order for costs, Mr Keane.

MR KEANE: If the Court pleases.

McHUGH J: Yes. The application is dismissed.

MR McQUADE: Your Honours, there are two other summonses by Mr Kelly that are returnable today, particularly seeking issuing of subpoenas against the trustee. Mr Kelly has informed the trustee he just does not wish to pursue those. I will just ask for a formal order that they be dismissed.

McHUGH J: Yes, do you agree with that, Mr Kelly?

MR KELLY: That is correct.

McHUGH J: Yes, thank you, Mr Kelly. Those summonses can be dismissed.

AT 3.34 PM THE MATTERS WERE CONCLUDED