Elliott v ASIC M173/2002 [2002] HCATrans 504 (18 October 2002)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No M173 of 2002

B e t w e e n -

JOHN DORMAN ELLIOTT

Applicant

and

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Respondent

Application for removal

HAYNE J

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 18 OCTOBER 2002, AT 9.30 AM

Copyright in the High Court of Australia

MR M.D. WYLES: If your Honour pleases, I appear in that matter with my friend MR R.A. HEATH for the applicant. (instructed by Tress Cocks & Maddox)

MR N.J. YOUNG, QC: May it please your Honour, I appear with my learned friend MR P.D. CRUTCHFIELD for the respondent ASIC. (instructed by Australian Securities and Investments Commission)

HIS HONOUR: Yes. Mr Wyles, you should assume that I have read most of the material. I say most. I have not looked at - have not seen I think - some file of newspaper clippings that was exhibited to an affidavit. The purpose of exhibiting it was not self-evident and I did not think it necessary to use extraordinary methods to find it. But you should assume that I have read the papers.

MR WYLES: If your Honour please. With respect to the last matter your Honour raised, the newspaper clippings were exhibited merely to illustrate, by the best evidence we have available to us, the very close attention which the Supreme Court proceedings have received in the media and the impact of that close attention upon the reputation of the applicant.

HIS HONOUR: Yes. As I understand it the application for expedition is founded, is it, on the proposition that it is desirable to expedite it because of these considerations of reputation?

MR WYLES: Reputation and cost, your Honour, yes.

HIS HONOUR: As to reputation, the case for ASIC has closed, has it?

MR WYLES: Yes, it has.

HIS HONOUR: I understand a no case submission is foreshadowed?

MR WYLES: No, your Honour.

HIS HONOUR: It is not?

MR WYLES: No, and I am sorry if that was not clear from the draft outline of summary of argument which we - - -

HIS HONOUR: Yes. Your client is at the point then where he has to choose whether to meet the case by evidence or argument.

MR WYLES: The Court has been informed, your Honour, that he will meet the case with evidence.

HIS HONOUR: Yes.

MR WYLES: I can inform your Honour that the evidence that is anticipated is essentially as to facts. It is essentially the evidence of the applicant.

HIS HONOUR: Yes. So the damage to his reputation by him giving evidence in explanation of the case advanced against him by ASIC is what?

MR WYLES: The damage is, your Honour, the reporting of the cross-examination obviously of the witness in the course of making fair comment on the proceedings. The reality is that the very existence of a proceeding, if it has no proper foundation in law, will have had the impact upon the applicant's business reputation in all of the circumstances. There is also, your Honour - and this has been a matter of contention between the parties for some time, but there is also the existence of section 131(7P) in the ASIC Act 2001.

HIS HONOUR: In the ASIC Act 1990 or the Corporations Act?

MR WYLES: I am sorry, Corporations Act 2001, I apologise.

HIS HONOUR: Yes.

MR WYLES: The only other matter, your Honour, to which the applicant can point - and evidence has been sought to be adduced in this - is the considerable cost which will be borne by him in completing the trial.

HIS HONOUR: That assumes that the trial is to be completed. Can I just understand something about the procedures that seem to have been adopted. They are not self-evidently clear.

MR WYLES: Yes, your Honour.

HIS HONOUR: Your client has filed a defence. Is that right?

MR WYLES: Yes, he has.

HIS HONOUR: Was that pursuant to order?

MR WYLES: No.

HIS HONOUR: By what right did he file a defence? There was no order for pleadings in the action, was there?

MR WYLES: There has been filed - no. The short answer to your Honour's question is no, there was not.

HIS HONOUR: No. There is no application, is there, to terminate the proceedings summarily?

MR WYLES: On this basis, your Honour, no.

HIS HONOUR: On this or any basis?

MR WYLES: There have proceeded two applications to challenge ASIC's right to commence the proceeding, and both of those applications have been rejected by the trial Judge.

HIS HONOUR: So is this a third and different - - -

MR WYLES: A third and very different application, your Honour, yes.

HIS HONOUR: You speak of it as an application. What application is there in the Supreme Court proceedings other than the filing of a defence and the giving of 78B notices to Attorneys?

MR WYLES: Your Honour is quite correct. I have slipped up. There is no application before the Supreme Court.

HIS HONOUR: What then is the issue now, depending in a Court, which is to be removed into this Court?

MR WYLES: The issue which has been defined on pleadings as they now stand. There has been no challenge to the filing of the defence, your Honour.

HIS HONOUR: I do not think it is a question of challenge to the filing of the defence. You have put one on.

MR WYLES: Yes.

HIS HONOUR: The Court has received it I suppose, in the sense that the stamp has gone on it.

MR WYLES: Yes.

HIS HONOUR: But what is the joinder of issue on this point, Mr Wyles? This is no mere procedural quibble.

MR WYLES: No, I understand, your Honour. Can I explain to your Honour also - and I think that this is a point which has been made in Mr Coltman's affidavit that was filed yesterday in the Supreme Court - his Honour has inquired as to whether or not we propose to open. I have explained to his Honour that any opening of the case would be to in effect reiterate the matters set out in the defence, and that includes the issues which have been raised on the question of the validity of the action itself.

HIS HONOUR: Let it be assumed that that in some sense raises the issue. Let that be assumed for the moment, and that may or may not be valid.

MR WYLES: Yes.

HIS HONOUR: You have, I take it, seen the submissions filed by ASIC in answer to the application?

MR WYLES: Yes.

HIS HONOUR: I would take from those submissions - perhaps wrongly, and I will no doubt be corrected about this - that two answers are made: (1) the point is concluded against you by Hughes - - -

MR WYLES: Yes.

HIS HONOUR: - - - in at least the joint reasons of six members of the Court, perhaps in the reasons of all. Even if that is not right, no Constitutional point arises because the point is one of statutory construction resolved by the application of the 2001 legislation.

MR WYLES: Yes.

HIS HONOUR: What do you say as to that latter point?

MR WYLES: The 2001 statute does not change the position which prevailed prior to that time. There is still a Constitutional point as to whether or not in the - and this point has been raised in the Court of Appeal in Queensland, as I understand it, in Corbett, and the point has been determined against me. But the point is, your Honour, whether or not the referral by the States pursuant to which - can I call it the validating part of the ASIC Act, has now been enacted - the new Part XVI. Whether or not that referral of power to the Federal Parliament can legitimise an absence of power which preceded that referral.

HIS HONOUR: Where do I find that reflected in your defence or the 78B notices, or in the motion which is for removal?

MR WYLES: No, your Honour cannot find that.

HIS HONOUR: Mr Wyles, where are we up to? You are seeking expedition - - -

MR WYLES: Yes, we are.

HIS HONOUR: - - - for a section 40 removal - - -

MR WYLES: Yes.

HIS HONOUR: - - - on a point not yet identified in the pleadings, the 78B notices. Where are we up to?

MR WYLES: Your Honour, we can rectify that lack of identification.

HIS HONOUR: Mr Wyles, you come into this Court.

MR WYLES: Yes, your Honour.

HIS HONOUR: You should come into this Court, I would have thought, with an argument developed. You wish to have part of a cause pending in a State Supreme Court removed into this Court. One might reasonably expect that the point would be identified with some care. What is the point that you seek to agitate in this Court by section 40 removal?

MR WYLES: Your Honour, the points with respect have been given some care. The first point is that notwithstanding the position in use, the position which now confronts the Court is this: there is a question mark - a very real and substantial question mark - over the ability of subsection 11(7) of the ASIC Act 1989 to authorise the purported conferral of power via section 66 of the Corporations (Victoria) Act 1990. Without - - -

HIS HONOUR: Is that - yes, go on.

MR WYLES: Without that authorisation of power, then ASIC has no ability to rely upon section 1317EB of the Corporations Law of Victoria as it was in force prior to 13 March 2000. ASIC responds to that and says - - -

HIS HONOUR: No, Mr Wyles, I am asking you what is the point that you wish to agitate in this Court. I want you to identify with care and precision, for let there be no misunderstanding about it, I intend to hold you to your formulation - - -

MR WYLES: Yes, your Honour.

HIS HONOUR: - - - of what is the point that you seek to agitate in this Court on section 40 removal. If you would like some time to formulate - because let there be no misunderstanding as to its importance - ask for it.

MR WYLES: In that case I will ask for it, your Honour.

HIS HONOUR: Yes. How long do you ask for?

MR WYLES: If your Honour would allow me 15 to 20 minutes.

HIS HONOUR: Yes. It is quarter to 10. If I come back onto the bench at quarter past 10, you should be - - -

MR WYLES: Yes, your Honour.

HIS HONOUR: I would be grateful if you would then tell me what is the point that you seek to agitate. I would be grateful if you would also tell me what answer you make to the proposition advanced by ASIC that no Constitutional point arises because the provisions of the Corporations Act 2001 and ASIC Act 2001 to which they have referred in paragraph 17 of their submissions - - -

MR WYLES: Yes.

HIS HONOUR: - - - are effective to cure any deficiency in the power of ASIC to institute or maintain the proceedings that were commenced, understanding of course that ASIC deny that there was any such deficiency.

MR WYLES: If your Honour pleases.

HIS HONOUR: Quarter past 10.

MR WYLES: Thank you.

ADJOURNED [9.46 am]

RESUMED [10.17 am]

HIS HONOUR: Mr Wyles?

MR WYLES: I thank your Honour for the time. We have now a draft summary of argument, your Honour. We have sought to identify two questions in part 1. Perhaps I can seek to articulate those questions more succinctly. The first Constitutional matter which we seek to address is this: was subsection 11(7) of the ASIC Act 1989 supported by any other head of power in the Constitution other than section 122 at the time ASIC commenced proceeding 7748.

Can I move to the matter raised in paragraph 17 of ASIC's outline of submissions. Can I identify the Constitutional point which we submit arises, your Honour, in those circumstances by first making it clear that for the purposes of identifying the Constitutional point it should be assumed that the proper statutory construction of Part XVI of the ASIC Act 2001 and sections 1370, 1372, 1384 and 1401 of the Corporations Act of the Commonwealth 2001 would rectify the gap which it is submitted on the part of the applicant arises in consequence of the proper answer to the first question.

That then leaves this issue which we would seek to identify in this language. I have expressed this in the negative, your Honour. It may need to be expressed as a question. Can section 51(xxxvii) of the Constitution operate to give to the Federal Parliament a plenary power upon referral of power from the States, which plenary power can then be used to enact legislation with respect to matters which the Federal Parliament was, prior to the referral from the States, without power to enact laws with respect to. They are the two Constitutional issues expressed as succinctly as I can, your Honour.

HIS HONOUR: Thus on question 2, there is a challenge, is there, to the validity of sections - well, which sections?

MR WYLES: Those sections, your Honour - I take your Honour to section 255 of the ASIC Act 2001.

HIS HONOUR: Yes.

MR WYLES: And that section comes within Part XVI which deals with the transition, and the objection as to validity is to section 255 and 256, your Honour. Those two sections seek on their proper - assuming for the moment their proper construction - seek effectively to rectify any absence of the power which the Federal regulator may have had at the time it took an action with respect to a State Law, a State Corporations Law, prior to the enactment of this Act.

HIS HONOUR: So you say 255 and 256 of the ASIC Act 2001 are invalid. Yes.

MR WYLES: Yes, your Honour.

HIS HONOUR: Are there other sections the validity of which you challenge?

MR WYLES: I then need to take your Honour back to the sections 1383 and 1384 and over to section 1401, your Honour. Those sections also - if I take your Honour directly to the language of paragraph 1384(3)(b). It appears that the structure of the Act is by a method of substituting new rights upon the enactment and proclamation of this Act which would supersede the rights that a person may have had prior to that Act having come into force, and to the extent that those sections by that mechanism seek to fill a void which would otherwise be relied upon by a person such as a person in the position in which the applicant says he is in in this proceeding, would effectively eliminate the right to challenge the lack of validity in the legislation as it existed prior to this enactment.

What is submitted to your Honour is that the referral Acts of the States, in their limited language seeking to refer to the Federal Parliament in effect the legislation which was at the time lying on the table of the New South Wales Parliament - - -

HIS HONOUR: Which included these provisions or did - - -

MR WYLES: Which included these provisions, your Honour, without taking your Honour to it.

HIS HONOUR: Yes.

MR WYLES: By that mechanism has sought to vest the Federal Parliament with a power which - can I try and put it in these more straightforward terms. It tried to vest the Federal Parliament with the power as at, say - the date of referral has gone out of my mind, your Honour, I am sorry, but I think it was July 2001. I am indebted to my learned friend.

At that point in time it is said that the Federal Parliament had power - and taking the example which I have sought to place before your Honour this morning - had power to authorise the conferral by the Victorian Parliament of the power to bring the proceeding against the applicant here. So it said, "As at July 2001, the State now refers that power to you, to the Federal Parliament." The Federal Parliament then says, "We will enact a law which effectively says as at" - and taking this example of proceeding 7748 - "as at May 2001, we have power to authorise the conferral by the Victorian Parliament of the power relied upon in section 1317EB. So therefore, now having had the power referred to the Federal Parliament, you have nothing to complain about." It is - - -

HIS HONOUR: Another way of looking at it may be that the States referred power in respect of a matter, being the matter identified as the enactment of specific legislation on terms which included the terms now in question.

MR WYLES: Yes, it may well be, your Honour, and - - -

HIS HONOUR: And if that is the way to look at it, what is the Constitutional consequence that is said to follow?

MR WYLES: The Constitutional consequence which is said to follow is that by that referral, what is sought to be done is to empower the Federal Parliament with a power which it did not have at the time the actions were taken by a body acting pursuant to Federal legislation.

HIS HONOUR: Assume that to be so, what follows Constitutionally?

MR WYLES: What is submitted to your Honour is that what follows Constitutionally is that that is a retrospective conferral of power - not retrospective legislation, a retrospective conferral of power. So the question that arises Constitutionally - - -

HIS HONOUR: Again assume that to be so.

MR WYLES: The question that arises Constitutionally is, is the plenary power referred limited to matters which go forward from the date of referral or can it be a referral of a plenary power to be exercised retrospectively?

HIS HONOUR: Plenary power may perhaps obscure more than it illuminates. If there is power referred to enact a particular piece of legislation and that piece of legislation has the character you describe, namely a character of validating what previously was invalid - let that be the assumption for debate - what is the Constitutional impediment to that?

MR WYLES: It is submitted that the Constitutional impediment to that is that it is beyond what is contemplated by section 51(xxxvii).

HIS HONOUR: And what authority do you engage in that respect?

MR WYLES: There is - and I hasten to point out to your Honour that I am aware that some brief consideration was given to this matter by the Court of Appeal in Queensland in the case of DPP v Corbett.

HIS HONOUR: Yes, I had more in mind what authority of this Court do you refer to in support of the proposition that there is the limitation you have identified.

MR WYLES: There is - would your Honour just bear with me for a moment. Your Honour, I think that we have identified the authority of Walsh [1925] HCA 53; (1925) 37 CLR 36 there are some.

HIS HONOUR: Yes. Are there particular passages that you pray in aid? If you just list them rather than read them to me.

MR WYLES: Yes, can I inform your Honour at the bottom of page 81 in the judgment of his Honour Isaacs J - - -

HIS HONOUR: He was at least part in dissent, was he not?

MR WYLES: Yes, he was, your Honour.

HIS HONOUR: Yes. So at 81?

MR WYLES: 81, a passage the bottom of the page commencing, "It is true and I have expressed my own view emphatically" down to just over to page 82 about seven lines down, your Honour.

HIS HONOUR: Yes, am I reading the right passage? That seems to be a passage devoted to the immigration power - - -

MR WYLES: Yes, it is, your Honour.

HIS HONOUR: - - - and the proposition that once an immigrant, always an immigrant.

MR WYLES: I do not pretend, your Honour, that there is anything but obscure references, and this is the closest we have been able to find to support the proposition which is put.

HIS HONOUR: Yes.

MR WYLES: There is at the bottom of page 99, further in the judgment of his Honour Isaacs J under the heading Retrospection.

HIS HONOUR: Yes.

MR WYLES: And in the judgment of his Honour Higgins J, there is a passage commencing at the bottom of page 110 which continues over to 111.

HIS HONOUR: Yes.

MR WYLES: And the question which in my submission arises, your Honour, is partially identified here:

Regardless of the timing, it is the question of when the Federal Parliament obtained the power.

HIS HONOUR: Can I just see if I understand the point that you seek to agitate. Is the point captured or is it not captured in this way: do you say that there can be no reference of power under 51(xxxvii) that permits retrospective validation of what, when done at the time, was invalid?

MR WYLES: Yes, your Honour. That is the point we wish to agitate.

HIS HONOUR: Yes, and other than Walsh v Johnson 37 CLR is there any other authority of the Court that you would refer to in support of that proposition?

MR WYLES: There is a paragraph in a judgment of his Honour Brennan J in Polyukhovich, your Honour, which I apologise we have not brought to Court this morning. It is a pretty short passage - - -

HIS HONOUR: Yes, that is the war crimes case.

MR WYLES: Yes, it is, and your Honour will find the passage (1991) 172 CLR 555, and the paragraph commences with his Honour questioning where the law would have been beyond power had it been in force when the relevant conduct was engaged in. He then considers both the questions of the legislation conditioning the power, but it appears that there is a predicate to his consideration as to whether or not the legislature had the power at the time the enactment was passed.

HIS HONOUR: Yes.

MR WYLES: We do not pretend, I should hasten to say, your Honour, that the point is not a difficult point for the applicant and certainly it was the view of the Court of Appeal in Queensland that there was no difficulty with the retrospectivity.

HIS HONOUR: Do you say that a State Government acting otherwise within power could enact legislation validating that which at the time of performance was invalid?

MR WYLES: Kidman stands directly in our way of giving your Honour a negative answer it would appear.

HIS HONOUR: Yes. What then is the Constitutional impediment in the State referring that power to the Commonwealth in a specified matter under 51(xxxvii)?

MR WYLES: The impediment with respect, your Honour, is the nature of the Constitution itself and its identification of the powers which the Parliament has, and the fact that if there is a referral of retrospectivity, then there is no capture on the power of the Federal Parliament as is contemplated by the Constitution itself because effectively what one can do is assign to the Federal Parliament some time after the event, notwithstanding that at the time the Parliament did not have the power to pass the particular enactment, power which is said to be referred by the States in order to, if you like to use the language more crudely, fix up the want of power.

HIS HONOUR: Yes.

MR WYLES: We say that is an issue which must be dealt with and it is an issue of principle that will have to be dealt with, your Honour.

HIS HONOUR: Yes. Now, let it be assumed that that point is arguable. What, if any, impact does the Victorian legislation, described as the Corporations Administrative Actions Act 2001, have on the underlying controversy between the parties?

MR WYLES: The Corporations Act 2001 in section 5, I think, your Honour, seeks to - it would seek in effect to be a State authorisation of the actions of a Federal body.

HIS HONOUR: Yes. Well, it is cast in terms of the invalid administrative action being deemed to have been taken by a State authority or officer of the State pursuant to powers validly conferred on a State officer.

MR WYLES: Yes. So effectively what it seeks to do is to assume that the ASIC Act had included a provision similar to the old NCSC Act; that ASIC could in effect at the relevant time have acted as the Crown in right of the State of Victoria.

HIS HONOUR: Yes.

MR WYLES: And to impose that fiction. In our submission, your Honour, it is nothing more or less than a fiction and it cannot operate to in effect take away a right which existed because of the invalidity - - -

HIS HONOUR: Sorry, what right was taken away?

MR WYLES: It seeks to dispel a right which - - -

HIS HONOUR: Yes. What right was taken away?

MR WYLES: The right to challenge the invalidity of the action.

HIS HONOUR: The right to challenge?

MR WYLES: Yes.

HIS HONOUR: Yes. How does this take away any right to challenge?

MR WYLES: Well, on the one view I accede to your Honour's point. On the one view the challenge can still remain. But what it seeks to do in effect is to paper over the defect.

HIS HONOUR: Yes, that is its avowed intention.

MR WYLES: Yes.

HIS HONOUR: Why does it fail in that intention?

MR WYLES: Because it does not for a moment change the reality of the position which was put before the Court. In fact there is a very real argument - - -

HIS HONOUR: Legislation sometimes does, you know, Mr Wyles, yes.

MR WYLES: It can, your Honour, but provided what it is saying is that it is seeking to take that power away from the Supreme Court of Victoria.

HIS HONOUR: That is an Act of the Victorian Parliament. Yes, go on. Mr Wyles, at some point you are going to have to come up hard against these questions.

MR WYLES: I understand that, your Honour.

HIS HONOUR: What you ask me to do is to expedite this to be heard by a Full Court.

MR WYLES: Yes, we are aware of the gravity of the request, your Honour.

HIS HONOUR: Let us come to grips with what it is that is being put. Now, what do you say is the deficiency in the Victorian Act? Yes, you can cast it in terms of it is trying to fix something up. Let us walk past that language for the moment. What is its deficiency?

MR WYLES: The deficiency in the Victorian Act is that it effectively seeks to take from the Supreme Court of Victoria the question of whether or not this proceeding was a nullity at the time it commenced.

HIS HONOUR: Yes. Let it be assumed for the moment that that is an apt characterisation. We find in section 11 that there is a reference to the section 85 point but only in respect of section 10.

MR WYLES: Yes.

HIS HONOUR: But let it be assumed that - - -

MR WYLES: But, your Honour, the question of whether or not it was a nullity at the time it commenced is a question for the Court to consider, not a question for the Parliament to then come along and say - - -

HIS HONOUR: Why not? Why do you say that is not a matter for a State Parliament? Let us leave out 51(xxxvii) considerations.

MR WYLES: What I am seeking to articulate, your Honour, is that it is not something that the State Parliament can do, because the Court is already apprised of the matter. It might be able to rectify the rights at some earlier time but once the proceeding is before the Court, it is a matter for the Court.

HIS HONOUR: Yes. What principle requires that conclusion? That sounds like the invocation of something like chapter 3. The relevant field of discourse is State Constitutional Law, when we are considering that Act.

MR WYLES: Yes, it is.

HIS HONOUR: Now, what is the principle that you are seeking to engage? It is not evident.

MR WYLES: And I am not making it evident and I apologise for that, your Honour. The principle I am seeking to engage is the principle that the rights as between the parties at the outset of the proceeding become the subject matter for determination by the Parliament passing retrospective legislation.

HIS HONOUR: Is the proposition that a State Parliament cannot enact retrospective legislation?

MR WYLES: No, not that it cannot, but that its power may be limited in certain circumstances.

HIS HONOUR: What I am trying to get you to articulate is what is the content of "may" and what is the content of the circumstances and why they are engaged. Look, I am not conducting a viva voce examination of you, Mr Wyles.

MR WYLES: I understand.

HIS HONOUR: What I want to know is what is the point you want to agitate in the Court.

MR WYLES: And I have sought to identify those two points, your Honour, that we wish to agitate.

HIS HONOUR: Yes. Well, you seek expedition.

MR WYLES: Yes, we do, your Honour.

HIS HONOUR: If the Court could hear you next week in Perth, what would you say as to that?

MR WYLES: I would get instructions but, your Honour, I would anticipate we would do everything to be there somehow.

HIS HONOUR: It may be that you could be fixed before a Full Court next week. There will be panels hearing leave applications. It may be that leaves will come on - it is a running list, but leaves may come on on Thursday. It may be that we could fix you then.

MR WYLES: Your Honour, it behoves the applicant to be there.

HIS HONOUR: But it also leaves open - I will have to hear Mr Young on this - whether in truth the issues yet arise in the Supreme Court. The second question that you say that you seek to agitate is I think one which finds not a hint of reflection in what has happened in the Court, is it?

MR WYLES: No, it does not, your Honour.

HIS HONOUR: Yes. Is there anything else you want to add?

MR WYLES: No, your Honour.

HIS HONOUR: Yes. Yes, Mr Young.

MR YOUNG: Your Honour, it is our submission that no serious Constitutional issue arises, either in relation to section 11(7) or in relation to the validation point, if I can call it that.

HIS HONOUR: The difficulty I have with this branch of the argument, Mr Young, is that ordinarily the section 40 removal would be returned before a Full Court.

MR YOUNG: Yes, your Honour.

HIS HONOUR: For me to form a concluded view about the issue of arguability seems to usurp what the Full Court is doing. That is the difficulty at the moment. So what do you say I should do?

MR YOUNG: Your Honour, we would say this: it is not the invariable practice that section 40 removal applications come before the Full Court.

HIS HONOUR: No.

MR YOUNG: There have been occasions where recently certainly they have come before single Justices and have been disposed of. I think of the PCS case and the Patrick's litigation by Gaudron J and by Gummow J in O'Meara.

HIS HONOUR: Was O'Meara a section 40 removal by the Attorney though? I know there have been single Justice removals where they have been sought by the Attorney, but those have been removals as of right.

MR YOUNG: No, O'Meara was by - it was an attempt to remove criminal proceedings by the accused, O'Meara. Gummow J dealt with it and refused it on essentially discretionary grounds relating to the state of the proceedings, the risk of fragmenting the criminal process and the ability of the Supreme Court of New South Wales to deal with all the issues.

HIS HONOUR: Then the difficulty is that at the moment all I have in front of me is the application for expedition. It is not the application for removal, and we would need I think to - if we were to pursue this line further, then I need to keep an eye on what it is I am dealing with.

MR YOUNG: Yes, your Honour. We took this view, your Honour: that an expedition application has really little point if a removal application cannot be heard more or less immediately. A hearing in December would seem to be of no real benefit to the parties because the trial would be long concluded by then and we might even have a decision, your Honour.

HIS HONOUR: That is why I was concerned to make some inquiries about whether we could add it in to a leave panel next week.

MR YOUNG: Yes, your Honour. We would submit that if your Honour is of the view that it should go to a Full Court, that would really, we would submit, need to take place effectively within the next few weeks for that course to make sense.

HIS HONOUR: I think it is either Perth sittings or we have got a further real difficulty about dealing with it other than in ordinary course.

MR YOUNG: Yes. Your Honour, if I can make the assumption simply for the purposes of putting the submission that your Honour would consider not just the expedition application but the removal application itself, we would submit that there are two broad categories of reason or reasons why removal should be refused. The first is the weakness of the Constitutional arguments - and can I put that to one side for the moment, your Honour.

HIS HONOUR: Just before you do, can I understand or make sure that I understand what the answer is that you give. I understand that they have two limbs. One is that Hughes concludes the point about 11(7), and the second limb is, well, even if that is wrong and 11(7) were insufficient, no Constitutional point emerges because of the provisions of the ASIC Act 2001 and the Corporations Act 2001 to which you have referred; provisions which you say are themselves unarguably valid.

MR YOUNG: Yes, your Honour.

HIS HONOUR: Does that capture it though?

HIS HONOUR: It does, but it would assist I think if I articulate shortly the first of those two points, your Honour, and I do that for this reason: our learned friend's fulcrum for his first argument of attacking section 11(7) is that the Corporations Amendment Legislation confined relevantly the Corporations Act of the Commonwealth so that it became an Act that expressly relied upon the Territory's power. Our learned friend seeks to use that express reliance upon the Territory's power to confine the operation of what appears on its face to be a section of broad application of section 11(7).

We have referred your Honour to authorities to say that that process of confinement does not work, but can I pass over that argument and go to the next point. Let us assume that our learned friend is right and that the 1990 legislation effectively confines section 11(7) to a Territorial operation. All that does, your Honour, is to open up another set of provisions identical to those considered in Hughes by which power is conferred on ASIC. Section 47(1) of the Commonwealth legislation picks up regulation - - -

HIS HONOUR: Sorry, 47(1) of which Act, Mr Young?

MR YOUNG: Yes, it is section 47(1) of the Corporations Act 1989 of the Commonwealth which was the same provision considered in Hughes. It is in a part of the Act that is expressly not said to depend upon the Territory's power. Part XIII of the Act is excluded from section 3(1) but otherwise confined to the Commonwealth Corporations Act to one relying on the Territory's power. Your Honour will see that in our outline of paragraph 4 where we quote from Hughes.

HIS HONOUR: Yes.

MR YOUNG: The Corporations Act 1989, the relevant provisions are in the folder that we have handed to your Honour at tab 2.

HIS HONOUR: Yes.

MR YOUNG: Section 47 of the Corporations Act 1989 is in a broad general provision, division 3 of Part IX, and section 47(1) provided that:

Regulations under section 73 may provide that prescribed authorities and officers of the Commonwealth have prescribed functions and powers that are expressed to be conferred upon them by or under corresponding laws.

Regulation 3(1)(h) of those regulations under tab 5 are Corporations, Commonwealth Authorities and Officers Regulations.

HIS HONOUR: Yes.

MR YOUNG: It is the same regulation considered in Hughes, but there it was 3(1)(d), your Honour. 3(1)(h) is available in respect of:

Any other authority or officer of the Commonwealth within the meaning of Part VIII of the Act -

and under Part VIII of the Act, that plainly extends to an includes ASIC.

HIS HONOUR: Yes.

MR YOUNG: So if 11(7) is not available because of the Territorial powers confinement argument, there is no reason to suggest that regulation 3(1)(h) would not effectively confer the relevant power by force of Commonwealth Law on ASIC. Therefore it is on all fours with Hughes, and you look to see whether in the particular circumstances of the case whether a conferral of power on ASIC to bring civil penalty proceedings for insolvent trading falls within an available head of Commonwealth power, and is our submission that it does.

HIS HONOUR: And the powers you - - -

MR YOUNG: Interstate trading commerce, international trading commerce, corporations, bankruptcy and insolvency and others as mentioned in Hughes, your Honour, but - - -

HIS HONOUR: Yes.

MR YOUNG: So even if on the first argument our learned friend's basic point is accepted, it really does not allow him to overcome the decision in Hughes and the applicability of the self-same provisions that were considered. That is why we submit the first leg of the argument is not seriously arguable.

HIS HONOUR: But if that is so, does one ever get to the second limb?

MR YOUNG: You do not, your Honour, no. The second limb is only reached if you assume some absence of Commonwealth power because of the unconstitutionality of section 11(7) or its unavailability because as a matter of construction it is said to be confined to the Territory, and there is no other Commonwealth legislation expressly conferring the relevant power to take steps under State Law.

Then the second argument, we would essentially say, your Honour, that there is really no articulated basis in principle for the assertion that the validating provisions of the Corporations Act 2001 and the ASIC Act 2001 read in conjunction with the valid State Laws are not effective in accordance with their terms. Indeed there are two decisions - one our learned friend referred to, Corbett, in the Court of Appeal in Queensland, and the other a decision of Pauls Ltd v Elkington. In the two folders we have provided to your Honour, the two cases are at tabs 23 and 24. It is probably useful, your Honour, to notice the passages in those two cases. If I go to Pauls - - -

HIS HONOUR: In any event, perhaps if later you simply read the references to the passages rather than the passages themselves, but there are two Court of Appeal Queensland decisions which you say support you.

MR YOUNG: Yes, your Honour.

HIS HONOUR: What are the references, if you just list them?

MR YOUNG: In Pauls Ltd v Elkington [2001] QCA 414; 189 ALR 551 at 556-557, paragraphs 16, 19 and 20 and the judgments of McPherson and Williams JJ. In the other decision, DPP v Corbett (2002) QCA 340, the entirety of this argument really is noted including an unsuccessful Constitutional challenge on the same basis of the immigration case, Ex parte Walsh v Johnson. Walsh v Johnson is noted at paragraph 17. The passages of the judgment that deal with the operation of the relevant 2001 legislation run from paragraphs 24 to 31 and the Court holds that those provisions operate in accordance with their terms.

Could I ask your Honour to notice paragraph 27 that made this point: the effect of that legislation in that case was noted to be that the Commonwealth DPP could immediately have presented fresh indictments and so commence the proceedings again even if there were some issue about it. The same position would of course obtain here, even assuming there is irregularity in the original institution of proceedings, but these two decisions stand squarely against our learned friend's argument.

In short, your Honour, we would say for those reasons there are faint at best Constitutional arguments that are raised.

HIS HONOUR: Are they raised in the Supreme Court proceedings?

MR YOUNG: The second one is certainly not raised as yet.

HIS HONOUR: What do you say is the status of the defence that has been filed?

MR YOUNG: It is unclear, your Honour. It does in some way afford notice of an intention to raise an argument at the conclusion of the case, which would be an argument of law and of course - - -

HIS HONOUR: Is it an argument that could be mounted by way of a no case submission?

MR YOUNG: Yes, your Honour, and - - -

HIS HONOUR: Without election.

MR YOUNG: - - - by way of no case or by way of final submission.

HIS HONOUR: And could be mounted by no case without any requirement to consider questions of election - - -

MR YOUNG: Yes.

HIS HONOUR: - - - as to call evidence.

MR YOUNG: His Honour Mandie J did not rule on the matter of election. Could I just tell your Honour briefly what happened - - -

HIS HONOUR: Well - - -

MR YOUNG: Our learned friend foreshadowed a no case application and then withdrew it.

HIS HONOUR: My only concern is that if the points about validity of the proceedings are to be regarded as now being live in the Supreme Court, they are points that could be heard and determined immediately at this stage of those proceedings without detriment to the present applicant. Is that right?

MR YOUNG: The answer is yes, subject only to this, your Honour: that our learned friend would have to put a submission to Mandie J that he should be permitted to do so without being put to an election.

HIS HONOUR: Would you require an election of him if the no case submission made was confined to the validity of the proceedings on arguments of the kind now adumbrated, because it does not seem to me that they are questions of evidence; they are questions of power, and the Judge is in as good a position now as the Judge would be at the start of the trial when one might ordinarily have expected these issues to be agitated, or at the end.

MR YOUNG: Your Honour, I believe I would need to take instructions about that essentially for two reasons. One is that the no case submission that was foreshadowed was on all bases including a review of the evidence, and in that context there were good reasons for saying that an election should be required in accordance with the general - - -

HIS HONOUR: Reasons that seem good to your side at least, Mr Young.

MR YOUNG: Yes, your Honour.

HIS HONOUR: Or they are good to the separate question, yes.

MR YOUNG: Yes, but secondly, as Hughes indicated, to finally resolve the availability of other heads of power, you do need to make some factual findings that engage for instance interstate trade and commerce, international trade and commerce, corporations and so forth. We would submit, your Honour, really the appropriate course is that all these matters can be raised by way of legal argument when the evidence concludes, and that will take place within approximately a week. There is really a week left in the trial leaving aside final submissions and legal argument.

HIS HONOUR: Yes.

MR YOUNG: Your Honour, we would submit that it is hollow to say that ASIC having presented its case, having closed its case, that Mr Elliott's reputation is going to be damaged if he answers the case. We would have thought prima face the contrary proposition would be the more readily perceived one, that is that Mr Elliott's answer to the case by way of giving evidence one would expect, from the viewpoint of the defendant, to rebuild his reputation rather than demolish it further.

So, your Honour, the view we would take is that there are powerful discretionary reasons - and I will not repeat them, we have set them out in writing - why your Honour ought to resist the application, treating it as a removal application at the moment - - -

HIS HONOUR: And if I do not treat it as a removal application but treat - because all I really do have in front of me is the expedition application.

MR YOUNG: Yes, your Honour.

HIS HONOUR: It just sort of bring us back to where we ought to be - what am I to do with the expedition?

MR YOUNG: Well, your Honour, we would say this: that there is no practical point in expedition unless the removal application can be heard and determined effectively within a period of a week, because the case would otherwise be finished within a week.

HIS HONOUR: If it is brought on in the Perth sittings on hearing an application for special leave presently anticipated to commence on Thursday, what do you say?

MR YOUNG: We will be there to meet it, your Honour. What we essentially say is - - -

HIS HONOUR: I did not think you would not be.

MR YOUNG: No.

HIS HONOUR: Yes.

MR YOUNG: What we would say is this: that we would submit that it is a matter for your Honour whether to effectively deal with the removal application now, or perhaps if our learned friend wants to articulate some further argument we would not oppose that. We would urge, your Honour, that that is an available and an appropriate course in the circumstances of this case, and that this matter and the issues raised really do not warrant the step of referring the matter to the Full Court. We would urge your Honour to deal with removal now on the expedition application, but if your Honour is not minded to do so but is minded to refer it to the Full Court, then we would submit that Thursday would be an appropriate time, your Honour.

HIS HONOUR: Can I just warn you about Thursday. It is a running list in Perth. Expectations are that it is Thursday when we will get to leaves, but that is not a fixed time and it is certainly not a not-before time. I am sorry, but I do not want you to go away with some misunderstanding and later be heard to cry, "We were told Thursday." The expectation is Thursday. When we get to the end of the appeals we are going straight on to leaves.

MR YOUNG: Yes, your Honour. We can perhaps make inquiries of your Honour's associate and Registry staff about what a reliable not-before estimate by those persons might be, your Honour.

HIS HONOUR: Good luck, Mr Young.

MR YOUNG: But that would be our position, your Honour. We urge really that the removal application needs to be dealt with quickly. The trial ought not to be interrupted, given that it is virtually about to finish. But we do urge your Honour to take on the burden of resolving the removal application. If your Honour pleases.

HIS HONOUR: Yes. Now, Mr Wyles, what do you say in answer? First, Mr Young urges me to deal with the removal application. What do you say as to that?

MR WYLES: That is a course that is open to your Honour. We have come to persuade your Honour that the matter warrants being dealt with expeditiously. On one view your Honour could say to me, "Well, expeditiously, you should be ready to proceed with it fully today." We are certainly well advanced in dealing with the removal application. There are always matters that one would like to attend to.

I can say, your Honour, that there is an immediate response to - dealing with matters of substance - the second aspect of the attack which Mr Young makes on the argument which is put, and that is the reliance on section 47 of the Corporations Act 1989. True it is that section 47 is in Part VIII and true it is that section 38 of Part VIII refers to an Act and Commonwealth authority pursuant to an Act. Of course when we go to the Acts Interpretation Act there is always the question raised, I think by subsection 22(4), of whether or not an Act as defined and referred to in a Commonwealth Act includes an Act for the Government of the Australian Capital Territory. The ASIC Act was such an Act.

There is argument, your Honour, that in fact the proper construction - and it is really a construction argument - the proper construction of Part VIII and the fact that the regulation itself does not specifically refer to ASIC. We take the principles for example in Project Blue Sky and read the legislation in its plain and ordinary meaning, taking into account the Acts Interpretation Act. On no view was section 47 intended to act as a facility for the powers otherwise conferred on ASIC by its own Act by the Federal Parliament to be embellished or added to. Rather, section 47 is there for a very specific purpose, as was identified by the Court in Hughes.

HIS HONOUR: One wonders what the purpose was of the frequent reference to corresponding laws then.

MR WYLES: Because the idea was, with respect, to ensure that such Federal authorities as the Parliament wished to pray in aid of the administration of the corresponding laws, the national scheme, could receive powers through section 47 if those authorities in fact had the power to receive them. Your Honour may with respect recall that section 6 of the DPP Act is a vastly different section to section 11 of the ASIC Act.

HIS HONOUR: Yes. May I bring you back. What do you say about the removal application? Should that be returned before a Full Court next week? Should it be heard and determined by me now? What should be done?

MR WYLES: No, we would seek to have the matter heard and determined before a Full Court.

HIS HONOUR: Yes. Now, if that is done, I would not wish the course of this morning to be understood as my expression of any view about what the Supreme Court of Victoria should do - - -

MR WYLES: I understand that.

HIS HONOUR: - - - or not do in the further conduct of the proceedings now pending in that Court.

MR WYLES: The applicant understands that, your Honour.

HIS HONOUR: The applicant may, but I do not want there to be some misunderstanding. It is a matter entirely for that Court whether it proceeds further with the hearing of the principal proceeding and how it organises the hearing of that principal proceeding. Nothing I have said in the course of these proceedings and no order which I make should be understood as the expression of any view of mine about the Supreme Court's exercise of its discretion about how it proceeds with the proceedings before it. Yes.

MR WYLES: Unless there is anything further I can address your Honour on, they are the only matters I wish to raise.

HIS HONOUR: Yes. Now, if there is to be a hearing in leaves next week, Mr Wyles, it will be necessary for the parties - you are the moving party - - -

MR WYLES: Yes, we are, your Honour.

HIS HONOUR: - - - to produce four copies of the papers upon which you move.

MR WYLES: Yes, I understand.

HIS HONOUR: Those will have to be filed no later than close of business Monday.

MR WYLES: If your Honour please.

HIS HONOUR: Now, ordinarily there would be steps like settling indexes and the like, all of which are going to have to be dispensed with. As for actually binding them into some usable form, well, we are going to have to make do with them bound in whatever form is convenient. But it will be for your side, no doubt after consultation with the opposite party, but the responsibility will rest with your side for the preparation of and filing of four copies of the papers on which you move, ordered in the fashion of an application book for section 40 removal. It will be necessary that you serve on the opposite party - three copies is the ordinary requirement - you should serve three copies of those papers on the opposite party.

In the course of the proceedings this morning there has been reference to whether the issues which you seek to agitate on removal into this Court are truly depending in the Supreme Court proceedings.

MR WYLES: Yes, your Honour.

HIS HONOUR: Again those are matters for which your side will have to take responsibility of persuading a Full Court that there is an issue or there are issues of a kind with which section 40 deals and which are ripe for removal. No doubt those are matters that will have to deal with the arguments which Mr Young has outlined against you; arguments which include but are not limited to, as I understand it, propositions that first the Constitutional points are unarguable and second, given the state of the trial of the proceedings, it would be inappropriate for this Court to remove any part of those proceedings before final judgment.

As I recall, Mr Young said that he understood there was about a week of proceeding left in the Supreme Court. What I took from that was the contention that this Court should not intervene at that late stage of the proceeding, but those are issues which will have to be debated no doubt before the Full Court.

I will direct that, subject to any contrary direction of a single Justice or the Full Court, the applicant's notice of motion for removal of part or all of the proceedings now pending in the Supreme Court of Victoria between Australian Securities and Investments Commission v Plymin and Ors be expedited and placed in a list of applications to be heard in the Perth sittings of the Court commencing on 21 October 2002. The costs of the application for expedition, I am minded to make costs in the application for removal are to be costs in the application for removal. I would certify for the attendance of counsel.

I should I think add to those orders a direction: direct that the applicant file on or before 4 pm, 21 October 2002 four copies of an indexed and paginated application book and on or before 4 pm 21 October 2002 serve on ASIC three copies of that application book.

It occurs to me that I should perhaps make some provision, should I not, for at least service of this order on other parties to the proceeding in the Supreme Court. Is there any need to do more than provide for service of a copy of this order on them; that is, do I need to direct service of the application book on those other parties? They may have a very real and lively interest in appearing and resisting the application. They may have some interest in appearing and supporting it?

MR WYLES: Only on the first defendant, your Honour, Mr Plymin, and we would accede to an order that he be - - -

HIS HONOUR: Why not on the other party?

MR WYLES: Mr Harrison has filed a defence admitting all allegations made against him, your Honour.

HIS HONOUR: Just so, why does he not have some interest in the prompt termination of these proceedings?

MR WYLES: I certainly ask your Honour whether an appropriate course is to direct that we make inquiries as to whether he requires the book to be served on him.

HIS HONOUR: No, he has got to be given some formal process I think in some form - - -

MR WYLES: Then I will not resist the order, your Honour.

HIS HONOUR: Do I direct service on him of the application book?

MR WYLES: For the sake of completeness, it probably makes sense that way.

HIS HONOUR: If I - - -

MR WYLES: There can be no misunderstanding, your Honour.

HIS HONOUR: If I add to the direction just given a direction that by the same time, the applicant serve on other parties to the proceeding in the Supreme Court a copy of the application book - is the notice of motion directed to them? It probably should be I think, and I think you probably should serve the notice of motion separately - a copy of the application book and the notice of motion for removal. It may well be that they have the slightest interest in the removal, but they have to be given notice of it.

The application book at the moment would contain within it all of the papers you have filed. Why should I not direct that this file of newspaper clippings that you want to have us all pour through be excluded, Mr Wyles?

MR WYLES: Your Honour can direct - I have nothing to say, your Honour.

HIS HONOUR: Yes. I will not make any formal direction, but I tell you what, if you want to produce the copies of that and vex the Court with it, on your own head, Mr Wyles, and I rather think that whatever the outcome, your side might have to wear the costs of producing it. Yes.

MR WYLES: If your Honour please.

HIS HONOUR: Is there any other aspect of the application booklet we need to cut down? There is a lot of paper in this - - -

MR WYLES: There is, your Honour.

HIS HONOUR: - - - and there is a lot of repetition of paper. I will give you no direction, but can I say to you - - -

MR WYLES: We take that on board, your Honour.

HIS HONOUR: - - - you have got to show some sense in the preparation of this book.

MR WYLES: Yes.

HIS HONOUR: And if there are exhibits which repeat documents found elsewhere, for goodness sake just put in a single sheet saying, "Exhibit X is also found at page Y of the application book," rather than chop down another forest or 12.

MR WYLES: Yes, your Honour.

HIS HONOUR: What else do we need to deal with?

MR WYLES: Submissions, your Honour; time for submissions.

HIS HONOUR: What do you say other than Tuesday, 10 am?

MR WYLES: Tuesday, 10 am? I say, thank you.

HIS HONOUR: It is going to be a happy weekend, is it not, Mr Wyles?

MR WYLES: Thank you, your Honour.

HIS HONOUR: We have got to read them - - -

MR WYLES: Yes, I understand that, your Honour. I do not seek to resist that. I understand the time.

HIS HONOUR: - - - and circuit you along even more than normal for the 36-hour day and the 12-day week.

MR WYLES: Yes. If your Honour could allow me until Tuesday, 10 am, then that would be - - -

HIS HONOUR: If we fix that, what does that do to you, Mr Young? When do you get yours on by?

MR YOUNG: If it is 10 am on Tuesday, your Honour, we could have ours on by say 2 pm the same day. We would prefer, your Honour, that the timetable be 5 pm Friday and that we have ours on - - -

HIS HONOUR: Sorry, 5 pm Friday is today.

MR YOUNG: I am sorry, 5 pm on Monday, your Honour, for the applicant and we would put ours on 10 am on Tuesday. We think that is more sensible, your Honour.

HIS HONOUR: Just as a matter of practicality, if we are going to have time to read them and digest them and speak about them, I rather think 5 pm Monday is going to have to be done, Mr Wyles. The list of appeals in Perth is reasonably heavy, and we have got two panels of leaves sitting. So there is a bit happening next week. Can you do 5 pm Monday?

MR WYLES: I was just wondering, your Honour, whether it could be 7 pm Eastern Standard Time.

HIS HONOUR: I will go and consult my vendor in a moment, Mr Wyles. 5 pm Monday for the applicant, 10 am Tuesday respondent, 3 pm Tuesday any reply. We have therefore got some papers, parties, submissions. What else do we need? Is there anything else?

MR WYLES: A list of authorities would go with the submissions.

HIS HONOUR: As to lists of authorities, bear in mind we are on circuit.

MR WYLES: Yes.

HIS HONOUR: You may therefore be advised I think to bring the principal authorities on which you are going to rely in photocopy form.

MR WYLES: If your Honour pleases.

HIS HONOUR: And with legislation - well, we are not going to have access to the Victorian legislation in Perth except off the Net, and our Net facilities in Perth are not great, in Chambers that is.

MR WYLES: Yes.

HIS HONOUR: I will leave it to the parties, but bear in mind that access to multiples of authorities - and you should at least order your affairs on the assumption that it may be a bench of three, it may be a bench of two, I do not know, but access to authorities is not going to be as easy as it is in Canberra, and access to Victorian authorities is not going to be as easy as it is in Melbourne or Canberra. So there we are.

There will be the direction about expedition that I have previously announced, there will be the direction about filing of the books and service on other parties that I have announced, there will be the directions about submissions, namely 5 pm Monday the applicant, 10 am Tuesday the respondent, 3 pm Tuesday any submissions in reply. Costs - costs in the application; certify for counsel. I will adjourn.

AT 11.30 AM THE MATTER WAS ADJOURNED