Forsyth v Deputy Commissioner of Taxation [2006] HCATrans 633 (14 November 2006)

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Forsyth v Deputy Commissioner of Taxation [2006] HCATrans 633 (14 November 2006)

Last Updated: 14 November 2006

[2006] HCATrans 633

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S543 of 2005

B e t w e e n -

ROSS FORSYTH

Appellant

and

DEPUTY COMMISSIONER OF TAXATION

Respondent

GLEESON CJ
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
HEYDON J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 14 NOVEMBER 2006, AT 10.18 AM

Copyright in the High Court of Australia

MR R.L. HAMILTON, SC: May it please the Court, I appear for the appellant with my learned friend, MS R.L. SEIDEN. (instructed by Paul Bard Lawyers)

MR D.M.J. BENNETT, QC, Solicitor-General of the Commonwealth of Australia: If the Court pleases, I appear with my learned friend, MR R.S. QUINN, for the respondent. (instructed by Australian Government Solicitor)

MR M.G. SEXTON, SC, Solicitor-General for the State of New South Wales: If the Court pleases, I appear with my learned friend, MS R.A. PEPPER, for the Attorney-General for New South Wales who intervenes in the proceedings. (instructed by Crown Solicitor for New South Wales)

GLEESON CJ: Yes, Mr Hamilton.

KIRBY J: You assert by right, but in case you ask for leave?

MR SEXTON: That is so, your Honour.

GLEESON CJ: Yes, Mr Hamilton.

MR HAMILTON: Your Honours, this is relatively short point of statutory interpretation. It concerns the scope of the jurisdiction of the District Court in a matter involving a director’s penalty notice or notices.

KIRBY J: There is an amended notice of contention. Do you agree to the amendment?

MR HAMILTON: Yes, we do. We also should note that we no longer rely on paragraph 7 and 58 through to 72 of our outline of submissions.

GUMMOW J: Say that again?

KIRBY J: This is the Kable point?

MR HAMILTON: That is correct.

KIRBY J: You are not pressing that?

MR HAMILTON: And the Forge point, yes.

GUMMOW J: Just tell me the paragraphs, please.

MR HAMILTON: Paragraph 7 and paragraphs 58 through to 72.

GUMMOW J: Thank you.

KIRBY J: There were some suggestions in Forge that the principle that was stated in that case relating to the Supreme Court was specific to the matter in that case, but you have elected not to pursue the matter in respect of the District Court?

MR HAMILTON: That is correct, your Honour. These proceedings commenced on 29 August 2001.

GUMMOW J: The question really is how section 39(2) of the Judiciary Act operates, is it not?

MR HAMILTON: Yes, your Honour, it is.

GUMMOW J: And what are the limits as to locality, subject matter or otherwise of the District Court within the meaning of section 39(2) of the Judiciary Act?

MR HAMILTON: Yes, we would say how - - -

GUMMOW J: You do not begin at the other end. You begin at the top end and then the question is you get into the State’s system that way.

MR HAMILTON: Yes, that is how the District Court was exercising federal jurisdiction by virtue of section 39(2) and one of the points that we make is how does the Judiciary Act and the District Court Act interact together?

GUMMOW J: No, it is question of how the Judiciary Act acts upon the State statute. They are not interacting on the same level, which is a false idea that seems to run through a lot of your submissions, as the New South Wales Solicitor points out.

MR HAMILTON: Thank you. Special leave was granted to appeal on grounds 2 and 3 which were in the notice of appeal which is at page 81 of the appeal book.

As we see it, there are two questions for decision by the Court. There is a threshold question of whether, if this case had been commenced in the Supreme Court on 29 August 2001, would it have been assigned to the Equity Division pursuant to Part 12 rule 5(b)(vi)? That is what we say is the threshold question. Then, if it would have been so assigned to the Equity Division at that time, what is the preferable construction of section 44(1)(a) of the District Court Act which defines the jurisdiction of the District Court so far as it is exercising, as we would say, the federal jurisdiction by virtue of section 39(2)? It is the appellant’s submission that - - -

KIRBY J: Could I just understand – it is not entirely clear from the written submissions – is it your submission that section 39(2) of the Judiciary Act insofar as it provides in this case for the exercise of federal jurisdiction requires the construction of the State legislation for which you contend or simply that when one looks at the dispute that the provisions of the Judiciary Act with the reference to “from time to time” tend to favour the construction that you urge?

MR HAMILTON: It is the second of those alternatives, your Honour. Our contention is that section 39(2) does not require an ambulatory construction to the State legislation but that it tends to suggest that the two can work harmoniously by applying an ambulatory construction to the District Court Act provision.

GLEESON CJ: I am not suggesting this affects the outcome of your argument, but reading the special leave transcript I got the impression that there has been another change to the internal arrangements within the Supreme Court of New South Wales such that these are matters that would be assigned to the Common Law Division now.

MR HAMILTON: That is correct. Immediately after the decision appealed from the Rules were changed so that matters which relate to the collection of debt are assigned to the Common Law Division.

GLEESON CJ: At some stage convenient to yourself before the argument concludes could you just give us a reference to that. It was no doubt included in the papers that were before the Court hearing the special leave application.

MR HAMILTON: Yes, I will come back to it, your Honour.

GLEESON CJ: Yes.

KIRBY J: I think Mr Gageler asserted on the special leave application that there was no impediment to recommencing the proceedings in the Common Law Division under the new rule, and therefore in the District Court, and that the result of your success in the case would therefore by that you would simply have to go back to the District Court for a retrial in the District Court.

MR HAMILTON: Yes.

KIRBY J: Do you accept that there is no statute of limitations or other impediment to that?

MR HAMILTON: Yes, we do.

KIRBY J: So that your case is not heavy with factual merit, it is just you assert legal merit.

MR HAMILTON: Yes, that is correct. Just to return to what I was saying, the appellant submits that section 44(1)(a) of the District Court Act should receive an ambulatory construction such that the District Court would not have had jurisdiction in this matter because it would not have been assigned to the Common Law Division of the Supreme Court of New South Wales but instead would have been assigned to the Equity Division of that court at the time of commencement of these proceedings.

GLEESON CJ: Is the consequence of your argument that the jurisdiction of the District Court waxes and wanes according to the internal arrangements within the Supreme Court?

MR HAMILTON: Correct, yes. The respondent argues for a static or a fixed time interpretation which would determine the jurisdiction according to the assignment of business to the Common Law Division at the commencement of this particular provision, which was 2 February 1998.

KIRBY J: The Court of Appeal found waxing and waning to be an uncongenial consequence that suggested a different construction.

MR HAMILTON: Yes.

KIRBY J: But you argue, as I understand it, that 39(2) contemplates exactly that, waxing and waning, from time to time.

MR HAMILTON: Yes, that 39(2) takes the jurisdiction as it finds it from time to time and suggests that one applies an ambulatory construction to the jurisdictional limits of the State courts when they are exercising federal jurisdiction.

To return to the threshold question though, and that is whether or not this is a matter that would have been assigned to the Equity Division of the Supreme Court at the time it was commenced in the District Court, there are two limbs to the appellant’s argument. They are, first, that these director’s penalties would have fallen within Part 12 rule 5(b)(vi) because they are proceedings in relation to the collection or administration of a Commonwealth tax. The second limb to our argument is that, in any case, these director’s penalties fall within the scope of the expression “other imposts” in the rule which refers to tax, fee, duty or other impost.

Is it convenient to refer to the text of Part 12 rule 5(b)(vi) in the appellant’s outline of submissions at paragraph 24. There it will be seen that assigned to the Equity Division are:

proceedings in the Court . . .

(vi) in relation to any provision in any Act or Commonwealth Act by which a tax, fee, duty or other impost is levied, collected or administered - - -

GUMMOW J: Now, the reason for all these changes in the structure of the Supreme Court was the removal of the Administrative Law Division, was it not? There is no longer an Administrative Law Division. There is an administrative law list, but there is no longer an Administrative Law Division.

MR HAMILTON: That is correct, yes, but I think our historical research was that it occurred some two years prior to that, in 1998, but I stand to be corrected.

KIRBY J: What was the reason for that change?

MR HAMILTON: What was the reason for the change to the Equity Division?

KIRBY J: Yes.

MR HAMILTON: There is no guidance as to why that occurred. There is some speculation, but there is nothing in the materials that we have been able to find that suggests why the change was made.

KIRBY J: Does any background material suggest that whatever the reason for the change it was one that would be apt to transfer into the Equity Division tax and impost type decisions but not penalty decisions?

MR HAMILTON: No, there is nothing that suggests that penalty decisions were to be left out, if we are talking penalties in the sense that we are here about directors’ penalties. Perhaps if we were talking about penalties of additional tax for understating one’s income or something like that, that might be a different situation, but we would say these penalties are imposts within the meaning of that expression in the rule.

KIRBY J: Normally you would expect a penalty proceeding in the Supreme Court to proceed in the Common Law Division rather than the Equity Division.

MR HAMILTON: Yes, the sort of penalties that I mentioned previously for failure to declare income, if that be something which the Supreme Court deal with. If I cold take your Honours to the case of Deputy Commissioner of Taxation v Woodhams [2000] HCA 10; (2000) 199 CLR 370, this was a unanimous decision of your Honours and the provisions that relate to directors’ penalties were summarised at paragraph 13, if I could read from there:

The provisions so far considered relate to the liability of employers in respect of amounts deducted from salary and wages on account of the tax liabilities of employees. As was pointed out by Phillips JA in Woodhams v Deputy Commissioner of Taxation, this is not a liability to pay tax. It concerns a responsibility to collect tax, and an obligation to remit the amounts collected. The relevant taxpayers are the employees. Division 9 seeks to protect the revenue by the imposition of penalties upon directors of non-remitting corporate employers.

Then the judgment goes on in paragraph 14 to quote from section 222ANA of the Income Tax Assessment Act 1936, which sets out the purpose of the division as well. We say what this means is that the directors’ penalty provisions act as a kind of backup collection mechanism to the, in this case, pay as you earn provisions which require employers to deduct an amount on account of tax from salary and wages which are paid to employees.

GLEESON CJ: But does payment of the penalty discharge the obligation to pay the tax?

MR HAMILTON: Yes, it does. There is a parallel liability between the company and the directors and the payment of any part of the - - -

GLEESON CJ: Subsection (3), is it not, of section 222ANA?

MR HAMILTON: That is correct, yes. So this, we say, is not a penalty in perhaps the sort of seriously penal sense, if you will, the failure to declare one’s full income or some other breach of the taxation law along those lines. This is a penalty, admittedly on directors, but one which is designed as a means of extracting from those who are in charge of corporate employers the amount that has been withheld and has failed to be remitted to the Commissioner of Taxation.

KIRBY J: What is the relevance here of section 55 of the Constitution?

MR HAMILTON: We would say that it is part of the administrative machinery that is not an imposition of taxation, and for that we would cite Re Dymond as authority for the proposition that provisions that deal with such administrative matters do not deal with the imposition of taxation.

KIRBY J: I am just not entirely clear how section 55 works. It says “Laws imposing taxation shall deal only with the imposition of taxation”. Now, is that a reference to the law introducing a provision such as section 222ANA or does it refer to the law as so amended when it is introduced? You see if the first question is, “Is this a law imposing a tax for the purpose of understanding its character?”, we would have to start with section 55 of the Constitution.

MR HAMILTON: Yes. Our submission would be that this is not law that imposes tax. What it does is the tax is imposed on the employee who does the work and derives the salary and wages. An obligation to collect on account of that tax liability is imposed on the employer and if that employer is a company and fails to meet its obligations, that obligation is further transferred onto the directors of the company. But that is an administrative machinery provision, not an imposition provision.

GLEESON CJ: On the point that you are on at the moment, the question is not whether it is a tax or impost imposed, the question is whether it is levied, collected or administered.

MR HAMILTON: We would say it is in relation to the collection or administration of a tax.

HAYNE J: The words of the relevant rule are “in relation to any provision . . . by which”, et cetera.

MR HAMILTON: Yes.

HAYNE J: Is the only provision to which you point that of AOC?

MR HAMILTON: AOC imposes the penalty and then the subsequent - - -

HAYNE J: What is the provision that you say is to be taken into account in looking at the operation of Part 12 rule 5(b)(vi)?

MR HAMILTON: Yes, section 222AOC.

HAYNE J: So AOC is the only provision?

MR HAMILTON: That is the one which imposes the penalty - - -

HAYNE J: No. Look, my question is what provision or provisions in the circumstances of this case do you say engage the operation of Part 12 rule 5(b)(vi)?

MR HAMILTON: We would refer to Division 2 of Part VI which are the provisions which impose the obligation on employers to withhold and then to remit, so that is section 221C(1A) and section 221F(5) impose the obligation on the employer, and then the penalty applies for failure to comply with Division 2.

HAYNE J: I understand there is a group of provisions which may have some relevance. What I want to understand is this. You say that this was a proceeding which if instituted in the Supreme Court would have been assigned to the Equity Division; is that right?

MR HAMILTON: Yes.

HAYNE J: You say it would have been assigned to the Equity Division by operation of Part 12 rule 5(b)(vi); is that right?

MR HAMILTON: Yes, that is correct.

HAYNE J: That would be so if the proceeding in the court met the character identified in (vi); is that right?

MR HAMILTON: Yes, correct.

HAYNE J: The proceeding must therefore bear the character of being in relation to any provision presently in a Commonwealth Act by which, et cetera. What I want to know is what provision or provisions of the Commonwealth Act meet the characteristic identified in (vi) for the purposes of this case.

MR HAMILTON: Our submission would be that the particular sections and subsections of the Income Tax Assessment Act are provisions related to the collection and administration of - - -

GUMMOW J: It is “by which”, you see, not “relating to”. The rule of court says:

in relation to any provision in any Act or Commonwealth Act by which a tax, fee, duty or other impost is levied, collected or administered –

You have to get a lot out of the words “by which”, do you not?

MR HAMILTON: Yes, we do, but we would say that the provisions by which the tax is collected or administered are those which impose on an employer an obligation to collect.

KIRBY J: It is enough for you if it is “in relation to any”. Those opening words are very broad.

MR HAMILTON: Yes. That is our next step, that the directors’ penalty provisions are - - -

GUMMOW J: It is in relation to a provision “by which”. You have to find the provision “by which”.

HAYNE J: All I want you to do is list for me, whether it is a list of one or more than one, list the provisions that you say are relevant.

MR HAMILTON: May I quote section 221C(1A):

Where an employer pays to an employee salary or wages, the employer shall, at the time of paying the salary or wages, make a deduction from the salary or wages at such rate (if any) prescribed in accordance with subsection (1) as is applicable.

Penalty: $1,000.

GUMMOW J: This the basic pay as you earn provision, is it not?

MR HAMILTON: Yes.

GUMMOW J: Okay. Go on.

MR HAMILTON: That is a provision by which tax is collected or administered.

HAYNE J: You see on its face this is a proceeding under 222AOC or engaging 222AOC. That is the central provision.

MR HAMILTON: Yes.

HAYNE J: That seems to me to present at some point a question whether 222AOC is a provision “by which a tax . . . is levied, collected or administered”. It is a question that may fall out one way, may fall out the other way, I just do not know. But should I confine my attention to whether 222AOC is a provision “by which tax . . . is levied, collected or administered” or should I be looking at other provisions?

MR HAMILTON: We would say, no, you should not confine your attention to 222AOC because that is at the end of a process. That is the final step in a collection process which has previously failed and the ultimately liability is sheeted home to the directors of a company which has failed to comply with its collection and remittance obligations.

CALLINAN J: Mr Hamilton, are there any different consequences flowing from a failure to pay penalty from the consequences following a failure to pay tax itself, that is, in addition to a penalty if you do not pay tax?

MR HAMILTON: Well, there are criminal consequences on the employer who has failed to - - -

CALLINAN J: As a result of or in consequence of a failure to pay the penalty criminal proceedings may follow; is that right?

MR HAMILTON: As a consequence of a failure to deduct from the salary and wages and to remit, yes.

CALLINAN J: But what about a failure simply to pay tax, can that be visited with criminal consequences also? I am trying to find out whether there are any different consequences, that is all.

MR HAMILTON: It is the tax of the employees that is not being paid and they are the ones who have earned the income and have relied on the employer to deduct.

CALLINAN J: No, but as a general rule, if a person fails to pay tax, apart from the imposition of a penalty which itself might give rise to criminal proceedings, is there any other consequence?

MR HAMILTON: Without there being some other element involved in it, for example - - -

CALLINAN J: Defraud or a false return.

MR HAMILTON: - - - to defraud the Commonwealth, but provided that you have fully disclosed and so forth the fact that you have not paid, as far as I am aware, does not result in any criminal consequences for the taxpayer.

GLEESON CJ: On the subject of collection, section 222ANA(3) states the purpose of the provisions and it says:

A penalty recovered under this Division is applied towards meeting the company’s obligations under the relevant Division. Conversely, amounts paid by the company reduce the amount of a penalty.

Could you simply identify the provisions that give effect to that purpose?

MR HAMILTON: The provisions that give the parallel liability reduction provisions?

GLEESON CJ: Exactly.

MR HAMILTON: Yes. Section 222AOH.

GLEESON CJ: Thank you.

MR HAMILTON: Yes:

SECTION 222AOH EFFECT OF DIRECTOR PAYING THE PENALTY OR COMPANY DISCHARGING UNDERLYING LIABILITY

222AOH(1) [Parallel liabilities] If one or more persons are liable to a penalty under this Subdivision, the following are parallel liabilities:

. . .

222AOH(2) [Effect of payment or application] This means that if, at a particular time:

(a) an amount is paid or applied towards discharging one of the parallel liabilities; or

(b) because of section 222AHA, one of the parallel liabilities is discharged to the extent of a particular amount;

each of the others that is in existence at that time is discharged to the extent of the same amount. However, this subsection does not discharge a liability to a greater extent than the amount of the liability.

GLEESON CJ: Is that a provision relevant to your argument that section 222AOC is a provision by which a tax is collected?

MR HAMILTON: Yes, it is.

KIRBY J: Well, that is one way to look at it. The other way to look at it is that it is a provision by which a penalty is collected and that if it were a provision by which the tax was collected it would have to be dealt with in legislation which was specific to the imposition of tax under the Constitution. I do not know whether 222AOH when enacted was treated as a provision – a tax Bill that requires separate and isolated provision for the levying of tax.

MR HAMILTON: But the tax is the tax of the employee and this really is - - -

KIRBY J: You say that levying of the tax came earlier.

MR HAMILTON: Actually levying of the tax comes later, I would have said, that from week to week or month to month as an employee works and has amounts deducted from salary and wages, that is credited - - -

KIRBY J: The word in the Constitution is “Laws imposing taxation”, so it is only such laws that have to be dealt with only in a Bill in imposing taxation.

MR HAMILTON: And we would say the tax is imposed on the employee at the time of the assessment pursuant presumably to the Income Tax Rates Act and that the Assessment Act goes through the procedure for calculating the taxable income of that employee and then tax is levied or imposed by, for example, the Income Tax Rates Act.

KIRBY J: Yes, and the relevant rule is addressing attention not only to levying, but collecting or administering, and it is enough for your purposes if this is a law that is in relation to collection of a tax.

MR HAMILTON: Yes, that is right, that is our point. The second leg of our argument on this point of whether or not the director’s penalty falls within the rule is that we would say that this director’s penalty falls within the scope of the words “other impost”. In our outline of submissions we have referred to the dictionary definitions of “impost”. The Macquarie Dictionary definition is:

1. a tax, tribute, or duty. 2. imposition. 3. a customs duty. [ML impostus a tax, L impositus laid on]

KIRBY J: It is not just “impost”. It is “or other impost” which implies that it is an other impost of the general character of a tax, fee or duty, which is an imposition by government on the citizen, on an individual.

MR HAMILTON: That is what we are saying, that it is a fiscal exaction is the way I think we might have put it in our submissions. That is what we say is the character of this type of director’s penalty, that it is not some other sort of penalty which may not fall within the scope of this particular rule, but where you are dealing with a director’s penalty which is a backup collection mechanism for the PAYE instalment provisions, as they were, that we are dealing with an “other impost” within the meaning of those words in the rule.

So we have a dictionary meaning which relates it to tax. We have referred to the judgment of Justice Phillips in the Victorian Court of Appeal in Deputy Commissioner of Taxation v Woodhams [1998] 4 VR 309 at 320 where his Honour at about point 4 of the page, talking about MacCormick’s Case said:

It is true that in both that case and this default by the company is the occasion for the impost –

he is talking in Woodhams about these directors’ penalty provisions, so he has described them as being an impost –

and, if we leave aside for the moment the distinction that there it was a failure to pay tax imposed on the company itself and here it is the failure to remit deductions made by the company on account of tax imposed on others, that is a similarity. But there the similarity ends.

We cite that for the proposition that directors’ penalties have been recognised by his Honour in that case as being an impost. Further, we would submit that the word “impost” is not something which should be read down by reference to the collocation of words that precede it but, rather, should be given a broader meaning.

GUMMOW J: Why?

MR HAMILTON: On the basis that the Court should not readily adopt an ejusdem generis approach to - - -

GUMMOW J: All this is about the rearrangement of the internal business of the New South Wales Supreme Court.

MR HAMILTON: Yes.

GUMMOW J: There is no doubt that the Supreme Court receives federal jurisdiction at that level.

MR HAMILTON: Yes, that is correct.

GUMMOW J: But then it is dispersed by reason of the internal arrangement.

MR HAMILTON: Yes.

GUMMOW J: Now, why do you have to get so excited when it is just a question of division between the Common Law Division and the Equity Division?

MR HAMILTON: Because of its impact on what the jurisdiction of the District Court is.

GUMMOW J: That is another question, is it not?

HAYNE J: Why do we enter the debate at the level of the provisions about penalty and the like? Why do we not enter the debate at the earlier point of what is it that authorises the Commissioner to sue for tax? Is that not the provision “by which a tax . . . is levied, collected or administered”? Now, what is the provision that authorises the Commissioner to sue – presumably that will be found at the same place as the provision that makes this a debt due and payable to the Commonwealth – in respect of penalties?

MR HAMILTON: Yes, it is in the Taxation Administration Act, your Honour. I think it is section - - -

GUMMOW J: These provisions have been taken out of the Tax Assessment Act, I think.

MR HAMILTON: Yes, and these are described as tax-related liabilities which are debts due to the Commonwealth which can be sued for and recovered by the Commissioner. Section 250-10 of the Taxation Administration Act sets out a table of each tax-related liability under the Income Tax Assessment Act 1936.

KIRBY J: Was this in force at the relevant time?

MR HAMILTON: Yes, it was.

KIRBY J: What is the reprint that you are using? Perhaps you can let us know that a little later.

MR HAMILTON: Perhaps I can.

KIRBY J: It is just that one has to be a bit careful with an Act that is repeatedly amended.

HAYNE J: I think it may be – this is subject to checking – section 250-10, which is found in Part 4-15 Division 250 of Schedule 1 to the Taxation Administration Act 1953, I think it is, where you find in 250-10(1) a table, item 75 of which is a penalty under Subdivision B of Part 9, provision is 222AOE. You marry that then, I think, with a combination of 255-1 and 255-5. Section 255-1 identifies what a tax-related liability is. Section 255-5(1) makes it a debt due to the Commonwealth payable to the Commissioner and 255-5(2) enables:

The Commissioner, a Second Commissioner or a Deputy Commissioner may sue in his or her official name in a court of competent jurisdiction to recover an amount of a tax-related liability that remains unpaid after it has become due and payable.

Now, why is that not at least a provision, perhaps the provision, in a Commonwealth Act “by which a tax, fee, duty or other impost is levied, collected or administered”? The answer made, I suspect but do not know, is that it is not relevantly a tax, fee, duty or other impost because it is a penalty. The answer you make to that, in part at least, seems to be that that which is collected goes in satisfaction of the tax because the liabilities are parallel; is that right?

MR HAMILTON: That is correct, yes.

HAYNE J: We seem to be rather a little way away from where you began your argument. I do not know whether that is the right place to start or whether you are right to start it looking at AOC and AOE or where. But we have to follow this dreadful chain of provisions step by step along the ladder and decide whether there are rungs there or not.

KIRBY J: Justice Hayne made it sound so clear, not dreadful at all, but we will need it on a bit of paper at some stage with the supporting legislation.

MR HAMILTON: Yes, your Honour.

GUMMOW J: We will need to know too what provision of the Management Act as amended in 1999, I think, provided for action to be brought in a court. In other words, the tax itself was a debt to the Commonwealth and might be recovered, et cetera, as stated in the Administration Act, used to be stated in sections 208, 209, thereabouts. There must be comparable provisions in the Administration Act too about the AOC operation.

HAYNE J: I think it is hooked into AOE rather than AOC.

KIRBY J: What is the section?

HAYNE J: I think, but I do not know, that it is 255-5(2) of this schedule to the Administration Act – of course it is the first point you would go looking for it – and that hooks back into this item 75 of 250-10, which is a reference back to 222AOE. Section 222AOE is the notice before action provision. Presumably AOE is identified because until notice before action is given the Commissioner may not recover.

MR HAMILTON: Correct, yes, but 222AOC is the one which imposes the penalty. The rest are - - -

HAYNE J: Well, you would not want to make it easy, would you? You would not want to be able to follow the legislation without leaving Ariadne’s thread behind you.

KIRBY J: This case is taking on a rare fascination.

MR HAMILTON: If I could return to Justice Gummow’s question as to why we would urge the adoption of a broad interpretation of the words “other impost”, we have quoted in our outline of submissions from Pearce and Geddes on that point. It is at paragraph 39 of our submissions where they cite authority as follows:

In R v Regos & Morgan [1947] HCA 19; (1947) 74 CLR 613 at 623 Latham CJ cited with approval dicta suggesting that it is necessary for the persons seeking to apply the rule to show that the general words are to be limited. So while some limitation may have to be imposed on certain words, the context in which they appear may indicate that the limitation is not to be by application of the ejusdem generis rule.

KIRBY J: But the addition of the words “or other impost” does not seem to be a phrase cutting back the provision of the statute. It is a phrase that is enhancing the provision of the statute in saying we are going to deal with taxes, fees and duties, but in case we have not covered all of the government impositions we are going to add another phrase “or other impost” just to round the circle.

MR HAMILTON: Yes, that is what we would argue for, your Honour.

GLEESON CJ: I think you said a little earlier that the purpose of this rule that we are construing was to assign to the Equity Division matters that had previously been dealt with by the Administrative Law Division; is that right?

MR HAMILTON: No, I am not certain about that, your Honour.

GUMMOW J: We need to know because we need to know why these changes were being made.

MR HAMILTON: We will perform some more research.

GUMMOW J: You see, one’s understanding from experience at the time was that an appeal against assessment under 189 and 190 of the old system went up to the Administrative Law Division. If it was a pure recovery action, that went to the Common Law Division and none of it went to the Equity Division. That was all changed when it was decided simply to have two Divisions rather than more than three on the civil side. It is against that background that these changes were being made. So the question is: what was the subject mater with which the rule-making body thought they were dealing? They were not creating any new litigious subject matter; they were just redividing a cake that had already been divided. Where would these actions have gone under the old system, these penalty actions? They would have gone to the Common Law Division, would they not?

MR HAMILTON: Yes, Common Law Division.

KIRBY J: Not the Administrative Law Division?

MR HAMILTON: That was more for, for example, questions of State taxation and so forth, not collection provisions.

KIRBY J: Could the Commissioner have sued for this amount in the Federal Court?

MR HAMILTON: Yes, I cannot see any restriction on him commencing this in the Federal Court.

KIRBY J: Is the background to this change in the State Supreme Court to do with the litigious competition between the Federal Court and the State Supreme Courts?

MR HAMILTON: That is the speculation.

KIRBY J: Who are the speculators? Is this just amongst the legal profession?

MR HAMILTON: Just amongst the legal profession.

KIRBY J: It is not on paper?

MR HAMILTON: No, it is not on paper.

KIRBY J: But whatever it was, it did not last long.

MR HAMILTON: It lasted for nearly a four-year period.

GUMMOW J: Yes, but was the state of the Rules before this change was made? We have the text of the Rules before these changes. I suspect that this language here in subparagraph (vi) was not new language, that it was switched over from another compartment under the pre-existing rule structure. If we knew that, we would at least have some toehold to work out what is going on.

KIRBY J: I think you trace the history, do you not, in your written submissions?

MR HAMILTON: We do.

GUMMOW J: But not the text. Do we have the text?

MR HAMILTON: In the book of synopsis legislation under the tab the Supreme Court Act, Reprint No 9 as in force on 23 December 1997.

KIRBY J: So is this the one that was in force before what you say is the relevant amendment?

MR HAMILTON: Yes. So at that time there were the Family Law Division, the Administrative Law Division, the Criminal Division and the Commercial Division as well as the Equity Division and the Common Law Division, and section 53 dealt with the assignment of business within those Divisions.

KIRBY J: Where do we find the reference to those several Divisions that you have referred to in the document?

MR HAMILTON: In section 53(1) and (3).

KIRBY J: I see, yes. So there is an Administrative Law Division, or was at that time?

MR HAMILTON: Yes.

KIRBY J: And did that Division at that time and before this amendment have jurisdiction in respect of collection of tax under Commonwealth Acts?

MR HAMILTON: From section 53(3B) as it then stood, it appears not. It simply says that:

there shall be assigned to the Administrative Law Division all proceedings which are required by or under any Act, or by or in accordance with the rules, from time to time in force to be commenced, heard or determined in that Division - - -

GLEESON CJ: What were the rules that determined what had to be commenced at that time in the Administrative Law Division?

MR HAMILTON: Then there is paragraph (b) of - - -

GLEESON CJ: I see paragraph (b), but I am asking a question about paragraph (a).

MR HAMILTON: Yes.

GLEESON CJ: What were the rules, if any, being referred to in paragraph (a)?

MR HAMILTON: In the Supreme Court Rules, under the tab Supreme Court Rules, we have the reprint as in force at 2 April 1996. Part 12 rule 6 says:

There shall be assigned to the Administrative Law Division proceedings in the Court:

(a) under the provisions - - -

GLEESON CJ: There is the origin of the phrase on page 66 of the print, Part 12 rule 6(b)(vi), is it not, “in relation to any provision in any Act or Commonwealth Act by which a tax, fee, duty or other impost is levied, collected or administered”?

MR HAMILTON: Yes, but that is the Reprint No 6 as in force at 26 September 2000.

GLEESON CJ: Well, where is the one in force at the time of paragraph (a)? Which is the rule or what are the rules assigning cases to the Administrative Law Division referred to in paragraph (a)?

MR HAMILTON: It appears to be Part 12 rule 6, which is the first reprint under the tab Supreme Court Rules, reprinted as in force at 2 April 1996.

GLEESON CJ: Well, you will need to go to a schedule.

MR HAMILTON: We will need to go to a schedule, which is not in the synopsis, I am afraid.

GLEESON CJ: Have you got that handy, that schedule?

MR HAMILTON: No, I do not have it handy. We will have to - - -

GLEESON CJ: Well, are you taking bets on whether that schedule H uses this language we are construing?

MR HAMILTON: No, I would not go that far, your Honour, without looking at it. We will investigate it, your Honour, and just see whether or not there is anything – we will get hold of it and see if there is anything that touches on the question here.

GLEESON CJ: Now, while we are there, what is it that assigned business to the Common Law Division at that time? It seems to be missing.

KIRBY J: Did it get the residue?

MR HAMILTON: Yes.

GLEESON CJ: What was it that got the Exotic Diseases of Animals Act, for example? It was not a major source of litigation according to my recollection, but I am just wondering whether Part 12 rule 4 related to the Common Law Division – maybe it was the Criminal Division, I do not know. What we need is a complete version of the relevant Supreme Court Rules as at 1996 or 1997, including that Schedule H, so we can see what was then assigned to the Common Law Division and what was assigned to the Administrative Law Division, because it may be that what they simply did when they produced the rule that we are construing was to lift a provision that had previously assigned business to the Administrative Law Division into a provision that now assigns business to the Equity Division, and it would be interesting, if that is right, to compare it with whatever the Rules said about assignment of business to the Common Law Division at that time.

MR HAMILTON: We will have to deal with that over the lunch break.

GLEESON CJ: Perhaps you could get hold of that and let us have it in due course.

MR HAMILTON: Yes, thank you, your Honour.

GUMMOW J: That is one thing that has to be done. Another thing that has to be done is as to the time factor. In applying federal taxation legislation, whether it is the Income Tax Assessment Act itself or the Administration Act, we have to know the significance of the timing of these penalties. Looking at the statement of liquidated claim, it looks as if they had accrued – I am not sure about this – from 1997 through to 1999. Is that right?

MR HAMILTON: Yes, that is correct.

GUMMOW J: And the changes made by the Administration Act seem to have applied in relation to tax liabilities that became due and payable on or after 1 July 2000. It may be that those provisions Justice Hayne was taking you to do not bite because the tax-related liability became due and payable before 1 July 2000. If that is right, we are back in, I think, the Assessment Act to find what was it that created the penalty and what was it that said it could be recovered in a court and so on. I just do not know at the moment. Unless we know our starting points both in the federal law and the State rule system, we are not going to get anywhere, other than into despair.

MR HAMILTON: Yes. We had taken the view, your Honour, that when these proceedings commenced that section 250 and following of the first schedule of the Taxation Administration Act were then in force and that was the - - -

GUMMOW J: I know the Administration Act was in force at the time of the institution of this action, but it is not necessarily the point.

GLEESON CJ: There was also, was there not, at all material times a provision in the Supreme Court Act and the Rules that said if you started a proceeding in the wrong Division it did not matter.

MR HAMILTON: Yes, correct.

KIRBY J: But your contention, as I understand it, is that that is not picked up for the purpose of ascertaining the District Court’s jurisdiction?

MR HAMILTON: That is right.

KIRBY J: Because it acts on a hypothesis that there is an assignment and that is the assignment which the District Court secures?

MR HAMILTON: Yes, quite right.

GLEESON CJ: The question being whether it secures the assignment at the time of the enactment of the District Court Act or whether it has ambulatory operation thereafter.

MR HAMILTON: That is right, yes.

GUMMOW J: And that raises the question, what was the purpose of this provision in the District Court Act limiting it in this way?

MR HAMILTON: The explanatory memorandum that came out at the time that the legislation was introduced which inserted this provision in the District Court Act which was the Courts Legislation Further Amendment Act 1997 - - -

KIRBY J: Was it in the original District Court Act as originally enacted, which I think was 1975?

MR HAMILTON: I think 1973.

KIRBY J: Was it in the original Act or not?

MR HAMILTON: No, it was not. Previously the phrase was “any personal action at law” and the legislation changed that to the formula which we are concerned with and the explanatory memorandum said that this was to remove any doubt.

KIRBY J: I did not hear that.

MR HAMILTON: The explanatory memorandum which accompanied the Bill which changed the wording said that it was to remove any doubt.

GLEESON CJ: What provision did the District Court Act make for the granting of injunctive relief by District Court judges? Did they have a general power to grant injunctions?

MR HAMILTON: There was a limited equitable jurisdiction provided by section 134 but I am not - - -

GLEESON CJ: But if there were limits on the powers of District Court judges to grant equitable relief, that would be a good practical reason for not assigning to the District Court general jurisdiction in matters that were assigned to the Equity Division of the Supreme Court.

MR HAMILTON: Yes.

KIRBY J: It would help if we looked at the injunctive power of the District Court. I think the case was Pelechowski, about 1998.

MR HAMILTON: Yes.

GUMMOW J: They also did not have family provision jurisdiction in those days in the District Court. They do now I think.

MR HAMILTON: Yes. I think it is section 134 and in particular that particular provision of it is mentioned in the respondent’s outline of submissions.

GLEESON CJ: There is a simple way to test it. Just check on what power a District Court judge would have had at the relevant time to make an order for specific performance of a contract for the sale of land.

KIRBY J: Was there any indication in the case law at the time or in any writing, academic or otherwise, about what was the doubt for which the change was made from the personal action at law to an equivalence to the Supreme Court divisional arrangements?

MR HAMILTON: There is nothing specific that we were able to find. The Chief Justice in his decision refers to a case called Vale v TMH Haulage, I think the name of the – in the appeal book - - -

KIRBY J: What paragraph is that?

MR HAMILTON: On page 59, paragraph 20 his Honour there says:

The Court of Appeal had considered this formulation –

any personal action at law –

a few years before in Vale v TMH Haulage Pty Ltd (1993) 31 NSWLR 702. The Court gave a broad construction to the formulation but excluded “proceedings in equity” and certain other matters. The issue in that case arose under the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic) with respect to a claim under s556 of the Companies (Victoria) Code, being one of the insolvent trading provisions of the Corporations Law as it was at the time.

Priestley JA, with whom Meagher and Sheller JJA agreed, rejected a submission on behalf of the directors that the words “personal action at law” in s44(1)(a) should be given a restricted historical meaning. His Honour said at 707:

“In my view, Parliament must have intended in legislating in 1973 in regard to the District Court, whose jurisdiction had become steadily more important throughout the century, to describe its jurisdiction in the legal language of the present day...”

which suggests an ambulatory approach to the jurisdiction at that point. Now, at paragraph 23 Chief Justice Spigelman says:

His Honour went on to note that a different conclusion had been reached by the Full Court of the Supreme Court of South Australia in Churcher v Edwardstown Carpets (Reg) [1993] SASC 3897; (1993) 60 SASR 503 with respect to the succeeding legislation, i.e. s592 of the Corporations Law 1990. (See also Sky Channel Pty Ltd v Gray (1992) 39 FCR 62.)

That is all that we were able to discern as the possible source of any doubt about the jurisdiction of the District Court. There had been a decision of the Supreme Court of South Australia which may have cut across a decision of the Court of Appeal of New South Wales.

KIRBY J: That does not really touch any doubt that is relevant to this matter.

MR HAMILTON: That is what we would say, your Honour, yes.

KIRBY J: I suppose one point that might be picked up from Justice Priestley’s observation is the growing jurisdiction and importance of the District Court which is a matter, anyway, of judicial notice.

MR HAMILTON: Yes. Your Honours, if I could turn now to our argument concerning the ambulatory versus the static construction of section 44(1)(a) of the District Court Act. We have taken as a guide first up what the High Court said in Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at 381, paragraphs 69 and 70 of the judgment in that case, where the Court said:

The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole”. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed”. Thus, the process of construction must always begin by examining the context of the provision that is being construed.

A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions.

GLEESON CJ: That would be a good way to interpret the Income Tax Assessment Act.

MR HAMILTON: Yes, indeed. We have taken that as our guide to interpretation of section 44(1)(a) of the District Court Act, that the court should be giving effect to the purpose and language of it while maintaining the unity of all of the provisions of that statute.

Our submission would be if a static interpretation is to be given to section 44 then presumably that would suggest that the other provisions of the District Court Act might also receive a similar interpretation.

KIRBY J: First of all, we are starting with a provision relating to the jurisdiction of a court of record and there are some general principles which govern the way in which you construe those provisions.

MR HAMILTON: Yes.

KIRBY J: Is there anything in Knight’s Case or any of the other cases that is relevant to the way one would approach this provision of the District Court Act?

MR HAMILTON: There is, your Honour. The principle that one does not read limitations into jurisdiction which are not explicit to a greater or perhaps lesser extent but, in our submission, it is necessary to have a very strong indication that there are to be limits placed on the jurisdiction of the court and we say that there is nothing in either the words of section 44, nor in the background material to it - - -

KIRBY J: On the face of things, if one did not have the problem of this case, one would say they had this definition of “personal action at law” which was a sort of rather old-fashioned type of phrase, they had looked at the growth of the importance of the District Court and the fact that its quantum had increased and continuously increased and a lot of matters could be sent to the Supreme Court or they had taken over jurisdiction from the Supreme Court and they therefore thought that it was appropriate in this case to assign to the District Court all that which in the ordinary course was done in the Supreme Court in the Common Law Division.

MR HAMILTON: Yes, that is presumably what was intended and the question is whether or not it is what was assigned to the Common Law Division of the Supreme Court on that day or whether they were saying as that Common Law Division’s assignment of business provisions fluctuate from time to time.

KIRBY J: If the purpose is to recognise the growth and significance of the District Court, that tends to be an argument in favour of your construction that it is from time to time because jurisdiction of courts are changing from time to time, as is recognised in the Judiciary Act, and therefore as the jurisdiction of the Supreme Court is enhanced or reduced in particular Divisions then that was expected to be paralleled in the District Court which for this purpose was to be marching in step with the Supreme Court.

MR HAMILTON: That is our argument, yes, that is our submission, and that it does not cause any particular difficulty to – it is suggested that it could lead to inconvenience and such to have an ambulatory interpretation of section 44, but we say that practitioners are used to the changing status of the assignment of business in the Common Law Division and they are dealing with the District Court at the same time and there is no particular difficulty involved with a marching-in-step approach.

KIRBY J: But the argument against that is, or arguments are, that the Supreme Court divisional arrangements are peculiarly matters internal to the Supreme Court. They are not done by Parliament. They are done by judges for reasons of convenience and administrative necessities from time to time and some of the Divisions of the Supreme Court such as the Criminal Division or the Equity Division are very special and therefore it would not seem very logical to have judges in the Supreme Court deciding the rights of the District Court as to its jurisdiction and the rights of parties.

MR HAMILTON: We recognise the force of the argument. It is a balance that needs to be struck and we say that the better approach is to apply the ambulatory approach because the District Court Act must not only intersect with the Supreme Court Act and Rules but must, more importantly, intersect, if Justice Gummow will pardon that expression, with the Judiciary Act section 39(2) which invests the District Court with jurisdiction and is clearly and without doubt to be read in an ambulatory fashion.

So if we have the Judiciary Act itself being read in an always speaking manner and the jurisdiction of the Common Law Division of the Supreme Court fluctuating from time to time, in our submission, it makes sense that there should be harmony between the various integrated provisions and that having the District Court Act read in a static fashion seems to have like, if you will, a solid stone in the middle of a river - - -

GLEESON CJ: Is one of your arguments that when we are construing section 44(1)(i) of the District Court Act as amended from February 1998 and asking ourselves whether it is ambulatory or static we ought to consider whether section 44(1)(a)(ii) is ambulatory or static?

MR HAMILTON: Well, in the broad sense that I put it that the court strives to achieve a unity of purpose - - -

GLEESON CJ: Well, section 44(1)(a)(ii) talks about the court’s jurisdictional limit. That is an amount of money which history tells us has changed from time to time. In your submission, is the expression “the Court’s jurisdictional limit” to be given a static meaning or an ambulatory meaning?

MR HAMILTON: I would have to say a static meaning. It is clear from the monetary limit that that was what was intended.

GLEESON CJ: So that if the monetary limit changed from time to time the effect of 44(1)(a) did not?

MR HAMILTON: That is right, that it was business that was assigned to the Common Law Division of the Supreme Court subject to the monetary limit as established.

GLEESON CJ: No, I do not think I have made my question clear. Could you have a look at your written submissions, page 7, paragraph 20? It is just a convenient place to find the statute.

MR HAMILTON: Yes.

GLEESON CJ: We are construing 44(1)(a)(i), are we not?

MR HAMILTON: Yes.

GLEESON CJ: But in that context I invite your attention to 44(1)(a)(ii). At the relevant time, what was that amount?

MR HAMILTON: It was $750,000.

GLEESON CJ: And that is an amount that has changed often over the years, is it not?

MR HAMILTON: Yes, it has.

GLEESON CJ: Suppose it changed next year to $1 million, what, if any, consequence would that have on the operation of 44(1)?

MR HAMILTON: It would expand the jurisdiction of the District Court on a monetary basis only.

GLEESON CJ: Well, then if 44(1)(a)(ii) is to be given an ambulatory construction in that sense, what, if anything, does that tell us about 44(1)(a)(i)?

MR HAMILTON: It does require some mechanism to determine the jurisdictional limit of the court from time to time. So we would say that it does not touch on what actions would be assigned to the Common Law Division of the Supreme Court.

GLEESON CJ: That is in the finest traditions of the Bar.

MR HAMILTON: We would submit that the ambulatory construction of section 44 achieves the stated purpose of the legislation, that is, the removal of any doubt, because of the ability to determine from time to time what the intra-curial jurisdictional arrangements of the Supreme Court are. That, in our submission, would be something which would allow certainty to be achieved.

GLEESON CJ: I do not know whether it hurts your argument or helps it, but is it material for us to know that this legislation which took effect in February 1998 took effect as part of a process that involved a major shifting of a backlog?

MR HAMILTON: Yes, and that is in the explanatory memorandum to the – there were two amendments - - -

KIRBY J: Do we have this explanatory memorandum?

MR HAMILTON: We do. It is in the respondent’s legislation book at tab 6. It is on the last page in that tab. It is explanatory note page 4 at about point 7.

GLEESON CJ: I am sorry, I just want to identify the book you are referring to. I have a book called “RELEVANT LEGISLATION” headed “APPLICANT/APPELLANT AUTHORITIES”. You just referred to something called the - - -

MR HAMILTON: Yes, I have gone to the respondent’s legislation book as a more convenient - - -

GLEESON CJ: I do not seem to have that.

MR HAMILTON: I am sorry.

MR BENNETT: Your Honours, I was going to hand that up when I commenced my argument, but I can do that now.

GLEESON CJ: Thank you. What tab was that?

MR HAMILTON: Tab 6. It is the last page in the tab, down the bottom left-hand corner it says “Explanatory note page 4”:

Schedule 1.5 amends the District Court Act 1973 so as:

. . .

(b) to remove any doubt as to the kinds of action with respect to which the District Court has jurisdiction (Schedule 1.5 [2] and [3]: proposed section 44(1)(a) and (e)) - - -

GLEESON CJ: It happens from time to time that new jurisdiction is conferred upon the Supreme Court by legislation. When that happens it is necessary for it to be assigned to a Division within the Supreme Court. So the question that we are looking at in this case would arise, would it not, every time that exercise was undertaken?

MR HAMILTON: It would, yes.

KIRBY J: Looking at 44(1)(a)(i) and (ii) again, each of them is apt to an ambulatory interpretation. I mean, (i) assigns it to the Common Law Division but it is apt to being amended to assign it to another Division and (ii) is separate because presumably if it were another Division there would be no limit, would there, in the Supreme Court on the amount that might be claimed?

MR HAMILTON: That is correct, yes.

KIRBY J: So that is dealing with the separate fact that the District Court is a court of jurisdiction limited by amount in certain respects.

MR HAMILTON: Yes. May I go on?

GLEESON CJ: Yes, please.

MR HAMILTON: I have already touched on the necessity to attempt to bring harmony between the various statutes which are dealing with the jurisdiction of the Supreme Court, first, the Judiciary Act, then the District Court Act and then the assignment of business provisions, at least, of the Supreme Court Act. If we could read from something that was in some supplementary submissions that we put in which is relevant to the approach which should be taken towards the integration of provision of different statutes which your Honour Justice Kirby when you were the President of the Court of Appeal said in a case called Commissioner of Stamp Duties for New South Wales v Permanent Trustee Co Limited (1987) 9 NSWLR 719 at 722 to 723.

KIRBY J: These dicta do not seem to be any different to what Justice Gibbs said in the case that was cited in Project Blue Sky, that you try to get harmonious interpretation.

MR HAMILTON: That is right. You could try to go for harmony, integration between a just and fair and rational result.

KIRBY J: Of course, your opponent says the only way to get harmony here is to recognise that if you go to the Equity Division you have all sorts of powers which do not normally exist in their generality at least in the District Court. They may not be particularly relevant to this case, which is the recovery of a sum certain, but if you are hypothesising the assignment of jurisdiction equivalent to the Equity Division in the District Court that has a least certain oddities and therefore harmony suggests that you should not embrace that interpretation, even if you start from a presumption in favour of a speaking statute.

MR HAMILTON: Yes.

KIRBY J: What is the harmony you are promoting?

MR HAMILTON: The harmony that we are promoting would be that when matters of this sort were assigned to the Equity Division of the Supreme Court of New South Wales that that was the appropriate court in which these proceedings should have commenced.

KIRBY J: Do you say to avoid the very kind of specificities that Justice Hayne led us through earlier or that we would otherwise have to go through with the 1936 Act and finding out exactly what the jurisdiction was on a given date of the amending legislation it is more harmonious that practitioners who know the jurisdiction from time to time of the Division of the Supreme Court should take that as their reference point for the jurisdiction in the District Court?

MR HAMILTON: That is what we would say, yes.

KIRBY J: But either requires examination of the law as it changes from time to time.

MR HAMILTON: Yes, it does.

KIRBY J: It is a technical search.

MR HAMILTON: It is a technical search, yes. We do not resile from that. Our last point is the one that the ambulatory or speaking approach is the path of first choice in approaching questions of construction of a statute and, in our submission, it requires strong contextual contrary indication for the court to decide not to follow the preferred ambulatory approach and instead to select a static construction. We have cited the case of Hore v Albury Radio Taxis Co-operative Society Ltd Case as one authority for the always speaking approach being applicable as the preferred interpretational principle. We have also referred to section 68(1) of the Interpretation Act 1987 (NSW) which gives statutory effect to that proposition. True it is that section 5 says if there is a contrary intention appearing then that particular rule does not apply.

GLEESON CJ: Mr Hamilton, I am slightly embarrassed to have to ask you this question, but is it the case that at the time of the enactment – in February 1998 the Rule Committee of the Supreme Court had the capacity to reassign business within the Divisions of the Supreme Court or was that only capable of being done by legislation?

MR HAMILTON: His Honour Chief Justice Spigelman says at page 57 of the of the appeal book, paragraph 13, where he refers to section 124(3) of the Supreme Court Act which states that:

The rules may make provision for or with respect to the assignment of proceedings to the Court of Appeal or a Division. The assignment by the rules of any proceedings to the Court of Appeal or any Division has effect despite any contrary provision of this or any other Act or law.

GLEESON CJ: Then if your construction is correct, the Rule Committee of the Supreme Court of New South Wales could alter the jurisdiction of the District Court.

MR HAMILTON: That is right, yes, but our submission is that the assignment of business provision in the Supreme Court Act, section 53, throughout said “subject to the rules”, so our argument is that Parliament knew that the rules could make changes to the assignment of business and notwithstanding that went ahead and put this jurisdictional rule onto the District Court.

KIRBY J: I think there is something that is quoted in your written submissions that says that the power of the Supreme Court given to it by the Supreme Court Act is notwithstanding any other provision in an Act of Parliament, so it was contemplated that this would be a very potent committee.

MR HAMILTON: Yes.

KIRBY J: I suppose what is a fair comment is that it may seem a little odd that judges of the Supreme Court are thereby given the power to vary the jurisdiction of the District Court, yet the judges of the Supreme Court are the judges of the constitutional and highest court of the State and Parliament has, you say, specifically assigned that responsibility to them in this respect.

GLEESON CJ: Who constituted the Rules Committee of the Supreme Court in February 1998?

MR HAMILTON: That would be a matter that we would need to research.

KIRBY J: It is the Chief Justice and the President and other judges and then a representative of the Bar and the Law Society I think.

MR HAMILTON: And the Law Society – my learned friend has assisted me with that, yes. Just addressing the question of whether or not it is to be an always speaking or a static interpretation, in our submission, there is nothing in the words of the section itself, nor in the context in which it sits, which demands a static interpretation. Our submission is that if such an approach is chosen that this may require the establishment of an interpretational rule of general application in circumstances where we say there are powerful indicators that the ordinary standard ambulatory interpretation is the one to be preferred. So unless there is anything else I can answer, those are the submissions of the appellant, if the Court pleases.

GLEESON CJ: Yes, thank you, Mr Hamilton. Mr Solicitor for New South Wales, you are supporting the Solicitor-General for the Commonwealth?

MR SEXTON: Yes, your Honour.

GLEESON CJ: Yes, Mr Solicitor.

MR BENNETT: Your Honours, there are three issues in this case which I will deal with after making some very general remarks about the Judiciary Act and context. After those remarks, the three issues are, first, is section 48 an always speaking provision or a once and for all provision; secondly, what is the meaning of the word “reference” in section 68 of the Interpretation Act; and thirdly, what is the meaning of the words “tax, fee, duty or other impost”.

KIRBY J: Conceptually, the second is merely an argument in support of the first, is it not?

MR BENNETT: Not quite, your Honour, because, as I understand my learned friend’s case, he says that instead of going through the tortuous interpretation of legislation route that one goes through under the first, he gets straight there because of provision in the Interpretation Act, so it is a shortcut my learned friend relies on. We say that it does not arise because of the word “reference”.

Now, your Honours, in relation to the always speaking aspect, before I come to the cases on when statutes of this sort are ambulatory and when they are not, they make this general proposition about it, and that is that for the purpose of working out whether, whichever way the rule goes, there is a contrary intention or for the purpose of working out what the true construction of the section is if there is no general rule, if one asks the question, “Which of these two intentions of Parliament is more likely?”, there is only one answer.

The two possible intentions are these. One, we wish to lay down the jurisdiction as to subject matter of the District Court. We see the division which exists in the Supreme Court between the Common Law Division and the other Divisions. That represents a good approximation of what we want to achieve, so we will adopt it. That is one possibility. The other possibility, which my learned friend has to rely on, is that their intention was to say, “We think the difference between the Common Law Division on the one hand and the other Divisions on the other is the same sort of thing as the division we wish to achieve between District Court and Supreme Court, Common Law is to other Divisions as District Court is to Supreme Court in a sort of way, so let us adopt whatever the distinction is from time to time, whatever the division is from time to time, and apply that”. Now, that is a highly unlikely intention, whereas the first is a highly probable intention.

KIRBY J: This is the mischief of using this fiction of intention because you then slide into what those people sitting on the benches might have actually had in their brains as distinct from what they have said which is the beginning of statutory construction.

MR BENNETT: Yes, and, of course, one does not look to how they would have decided this case. One looks, rather, to what they meant by the words they used. But in construing those words one looks at what was being done and, in my submission, the first of those possibilities represents a credible and probable explanation of why the administration of business in the Supreme Court between the Divisions was adopted. The second represents a highly unlikely and artificial intention.

Now, let me then go to the question of what the presumption is. Your Honours, it was referred to by this Court in Deacon v Commissioner for Government Transport [1957] HCA 35; (1957) 97 CLR 535. This was a case where there was legislation dealing with the compensation of employees of the Commissioner of Government Transport and in relation to some complex provisions about such things as claims for the costs of ambulances the legislation picked up some provisions in the Workers Compensation Act and the question was were they picked up in an ambulatory way or not. Now, the Court dealt with the present question at page 546. They refer to section 10A of the Acts Interpretation Act (Cth) which dealt with the question of references to Acts, including amendments, and they then say:

It is true that s. 25 of the Interpretation Act of 1897 of the State provides that where an Act repeals and re-enacts, with or without modification, any provisions of a former Act, references in any other Act to the provisions so repealed shall, unless the contrary intention appears, be construed as references to the provisions so re-enacted.

Your Honours will note that does not refer to amendment. It refers to repeal and re-enactment. They go on to say:

But we are unable to regard that provision as covering such a process of amendment as has occurred in s. 10. Section 25 is directed to the not uncommon case of a repeal followed by a replacement of the same provision even though modified. Moreover it is concerned with “references”. Here we have more than a reference: we have a referential adoption –

I am sorry, this is not the case I was going to take your Honours to at this stage. This was the case on reference. I apologise to your Honours.

GLEESON CJ: It sounds like a case on your point too.

MR BENNETT: It is a case on my point too. I apologise.

CALLINAN J: It is [1933] HCA 2; 48 CLR 171, I think, is it not?

MR BENNETT: Yes, thank you, your Honour. It is Re Universal Distributing Co Limited [1933] HCA 2; (1933) 48 CLR 171. This involved the Australian Capital Territory companies ordinance which adopted with some modifications the New South Wales companies legislation. The question was whether that was affected by amendments. Justice Dixon, as he then was, at the top of page 173 refers to that. He says:

The Companies Ordinance 1931 adopts, with modifications which it prescribes, the company legislation of New South Wales in force at the time it commenced, and it provides (sec. 19(4)) that the practice and procedure so far as it is not regulated by rules of this Court shall be “as nearly as may be according to the practice and procedure of the Supreme Court of the State of New South Wales under the rules made in pursuance of . . . the Companies Act 1899 of that State.” I interpret this as meaning the existing rules of the Supreme Court and not as referring to rules which might be made from time to time after the commencement of the Ordinance. It follows that, in my opinion, the Companies Act Rules of the Supreme Court of New South Wales made on 5th December 1932 do not apply.

That was a year after the ordinance of 1931. So his Honour had no trouble in stating without reasons that a reference of that type was a reference to the rules at the time.

KIRBY J: But is there not a point of distinction, that here we are dealing with the statement of the jurisdiction of a court, whereas in the case of Re Universal Distributing you are dealing with quite complex detail of the substance of the law and its operation and that may not have passed in its specificity under the consideration of the local law maker. I can see a reason for distinguishing between these two.

MR BENNETT: Your Honour, in each case a wealth of detail is imported, different sort of detail. One is, as your Honour says, jurisdictional detail and one is procedural detail, but in each case one is dealing with something inherently likely to be amended from time to time and in each case one has to decide is one referring to the law at the time or is one referring to the law from time to time. In my respectful submission, that is a useful example of what occurs.

There is an example in England in the case of Willows v Lewis, which I will hand up to your Honours. It is a case reported in The Solicitors’ Journal and therefore commendably brief; it covers less than a column. It is Willows v Lewis (1981) 125 SJ 792in the second column.

KIRBY J: You accept Mr Bennion’s view that there is a presumption in favour of the proposition which the appellant puts?

MR BENNETT: No, I do not, your Honour.

KIRBY J: Why are we talking about exceptions to a presumption? What is the presumption you accept?

MR BENNETT: Your Honour, it is our submission that there is no presumption; if there is a presumption, it would go the other way. I am taking your Honour - - -

KIRBY J: Contrary to both what Mr Bennion says but also to what Pearce and Geddes say.

MR BENNETT: Yes.

KIRBY J: So you say all the learned authors and experts on the subject have got it wrong?

MR BENNETT: Your Honour, it is question of seeing what judges say rather than that. The only reference to it in the High Court seems to be the reference in Universal Distributing. Willows v Lewis concerned a taxation provision dealing with the taxation of governmental benefits of particular types. One of the provisions was that section 219 of the Income and Corporations Taxes Act charged payments of benefits under Chapters I to III of Part II of the Social Security Act, except certain listed benefits. At the time there was no mobility allowance, whatever that meant, under the Social Security Act. The argument was that it therefore did not pick up a reference to a mobility allowance that was later put in there. His Lordship, Justice Nourse, says this at about two-thirds of the way through the very short judgment:

The commissioners dismissed his case very shortly, relying on s540(3) of the 1970 Act whereby ‘any reference in this Act to any other enactment shall . . . be construed as a reference to that enactment as amended by any other enactment’. But that view involved reading those words as including amendments made under any other future enactment, whenever passed. That was to give s540(3) a width of application which the wording, at best equivocal, could not bear –

In other words, the interpretation provision did not apply so his Lordship needed to apply whatever rule of interpretation was relevant unassisted by a statutory interpretation principle. He said:

Accordingly the allowance was not taxable because it did not exist at the time that the charging provisions relied on by the crown were enacted.

So he says simply a section which picks up the – and says your taxable benefits under these parts of the Social Security Act cannot pick up benefits that did not exist at that time under that Act, even though later amendments to those provisions introduced it, and that is the conclusion he comes to having decided that the interpretation provision – the equivalent of our Interpretation Act – does not apply. So we get some comfort from that case.

Now, your Honours, there are some analogous principles which assist in working out what the principle is. The first is the principles that apply in relation to the reception of law. Now, I will not take your Honours through Quan Yick v Hinds [1905] HCA 10; (1905) 2 CLR 345 with which your Honours are no doubt familiar. The general principle in relation to reception of law, the law of England as at 1828 as it was accepted into New South Wales, and there are similar provisions in other States which are separated from New South Wales, as to New South Wales law during the period when they were parts of New South Wales, and the general provision is that the law has to be suitable to the conditions of the relevant colony or territory or whatever the place is. It was said very clearly in Quan Yick that that means conditions at the time, not conditions subsequent. It has been said many times that subsequent amendments to those laws do not affect it.

So if an English law made in 1825 was suitable to the conditions of New South Wales in 1828 it was received. If that is repealed in England in 1829 or amended in England in 1829 that does not affect it. It is the law as at 1828 that was received.

KIRBY J: That, I assume, must have been a basis for the decision in the Dugan Case concerning misprision of no corruption of the blood.

MR BENNETT: Yes.

KIRBY J: Itself an odd result, one might think, I think.

MR BENNETT: Your Honour, except for the fact - - -

KIRBY J: The rules of construction lead to very odd results. They maybe require reconsideration.

MR BENNETT: Your Honour, that odd result can be avoided in a number of ways. The obvious way is that the new polity has power to repeal laws of the old one to the extent that they would apply. Another analogy – and I am talking of repeal – is what happens in the case of repeal. Suppose one has three laws in chronological order (a) then (b) then (c) of the same polity and assume that law (b) repeats and re-enacts parts of law (a) and that law (c) then repeals law (a). It has been held in a number of cases that that repeal does not affect the law to the extent that it was incorporated by reference and applied by law (b).

That is referred to first in the well-known case of Clarke v Bradlaugh (1881) 8 QBD 63 and the clearest expression of the principle is at the end of the judgment of Lord Justice Brett at the very end of the report on page 69. It is the last words of the case. In the last paragraph his Honour says this:

As to the second point, it is a most ingenious one, but it obtains its colour only from the form in which the Act of 1866 has been amended by the Act of 1868, and partially repealed by that act of supererogation, the Statute Law Revision Act of 1875. It is an argument which entirely fails in substance, for not only are all the provisions of the Act of 1866, except as to the form of oath, expressly preserved by the Act of 1868, but there is a rule of construction that, where a statute is incorporated by reference into a second statute, the repeal of the first statute by a third does not affect the second.

Lord Coleridge, the Chief Justice, says the same thing from the bottom of 66 to the top of 67, but I will not take your Honours through that. Lord Justice Baggallay simply agrees with it at page 68. That general principle – I do not need to multiply authority on it – is repeated and referred to in a case called Jenkins v Great Central Railway [1912] 1 KB 1.

KIRBY J: I just get a feeling we are getting a bit disjoined from the problem in hand, which is to construe New South Wales legislation and rules made under it in the particular matter of the assignment of jurisdiction between Divisions of the Supreme Court and its reference to the District Court of New South Wales, and that, of its very character, is going to alter from time to time.

MR BENNETT: Well, it is, your Honour. Whatever presumption there is or whatever rule there is, it is a rule which is unless the contrary intention appears by express provision or necessary implication, whatever the rule is. Indeed, that was the basis on which the Chief Justice decided this case in the Court of Appeal. But I simply want – and this is the last case I will be citing on this – to demonstrate the general proposition that the normal rule is, we would submit, that a reference of this nature is not always speaking, and that was the reason why it was – for the necessity of the Interpretation Act provision.

KIRBY J: Where is the principle stated in Jenkins? What page?

MR BENNETT: It is page 8, your Honour, and it is at point 6 of the page, the second full paragraph on the page:

A local and personal Act may incorporate into its clauses the provisions of a former Act although that former Act has been repealed, and –

this is the bit I rely on –

the repeal of a statute does not repeal such portions of the statute as have been incorporated into another statute.

He is not talking there about a general re-enactment; he is talking about a statute which incorporates by reference some provisions. Now, it has been suggested that there is another analogy which would go the other way which we submit is not an analogy at all. That is the analogy to the denotation and connotation of words. Clearly – and there are numerous examples of this – if one uses a word like “transport” in a 19th century Act everyone agrees that although at the time that may have only referred to horses and carts, today it refers to cars and aeroplanes and so on.

There is a case somewhere where there was a reference to gas which was then coal gas only and it was held to apply subsequently to liquid petroleum gas and there were cases referring to medical procedures. I think there was a case referring to abortions where it was argued that the reference to abortion in the earlier Act was a reference only to the medical procedure because that was all that existed and not to subsequent pills, like RU480 which can have the same effect. Again, that was dealt with in a denotation and connotation way.

Now, that rule, the rule that a concept referred to in an Act, has to be updated from time to time has nothing to do with the question about references to statutes and, in my respectful submission, the cases I have been referring to are in a different category and the cases in that category do not really assist in resolving it.

Now, as I have said a few minutes ago, if one looks at the particular legislation here, it would be surprising if there was an intention that whatever changes should occur in the Supreme Court that should necessarily apply. We know that there was a reference at the time to “subject to the rules”. The Chief Justice in his judgment was of the view that that did not assist greatly.

He dealt with that in paragraph 14 at page 57 of the appeal book where he points out that prior to the amendment which gave the power to the Rules Committee:

there was no express provision in s124 conferring a power to make rules which had the effect of moving jurisdiction from one Division to another. Nor was s124 expressed in the form often found in statutory powers to make regulations “required or permitted” by the Act. Section 124 relevantly authorised rules “for the purpose of carrying this Act into effect”. It is by no means clear that the words “subject to the rules” in s53 of the Act prior to 1998, authorised the reassignment of matters from one Division to another. An alternative meaning could be that the Rules could provide that certain matters assigned by the Act required additional prerequisites before proceedings were instituted, e.g. leave.

But of course if that is right that makes it worse because if the Rules required additional prerequisites before proceedings were brought in a particular Division, then there is a really difficult question of construction of the District Court Act. If the Supreme Court Rules says proceedings are assigned to the Common Law Division of a certain type if a judge gives leave, does one then have to interpret the District Court Act to mean that a judge of the District Court has to give leave to commence proceedings there? There are all sorts of problems about making the provision work if that is the meaning of “subject to the rules”.

If “subject to the rules”, contrary to the views of the Chief Justice, meant that the Rules Committee did have power to make rules moving jurisdiction from one Division to the other, then one has the surprising consequence that the legislature intended that a decision of the Rules Committee of the Supreme Court could affect the jurisdiction of the District Court.

Now, the Rules Committee comprised a number of judges and a representative of the President of the Bar Association and a representative of the President of the Law Society. It would be possible, of course, for the judges sitting on the Rules Committee to divide so that there was a majority of one for a particular change and for the two representatives of the profession to vote with the minority so as to make it a majority.

KIRBY J: This is a very fanciful suggestion. I do not ever remember the Rule Committee ever dividing on anything.

MR BENNETT: No, well, your Honour, it did not when I was on it either, but the theoretical - - -

GLEESON CJ: The main problem with the Rule Committee was to get a quorum.

MR BENNETT: Yes, but it is unlikely, we would submit, that it was intended that that would be the result. But there is another factor, a more significant factor. The context of all these amendments and most of the legislation concerning rules of court and division of jurisdiction between Supreme and District Courts and assignment of business in the Supreme Court in the 1990s was the problem of congestion in the courts and delay in the courts. That was the concern.

It would have been well within the contemplation of Parliament at the time that there might be a movement of a particular type of business from one Division to another of the Supreme Court to deal with a backlog in a particular Division. One asks rhetorically, what rational reason would there be for applying such a change to the District Court?

KIRBY J: Because the overflow does tend to go to the District Court.

MR BENNETT: Yes, your Honour, but there might or might not - - -

KIRBY J: The two courts are very closely connected now. Once they lived in their own little worlds but they are very much integrated now, I think.

MR BENNETT: Your Honour, suppose that one possibility that must have been within the contemplation is this. Suppose there was a simple type of matter being dealt with in the Equity Division as a matter of routine which was becoming so frequent and involving so many cases that it was clogging up the Equity Division – let us assume the simple winding up of companies, for example, undefended winding-up petitions of companies which are a very simple in most cases – and let us assume that at some time in the future because of a recession or depression that jurisdiction became so large it was preventing the Equity Division going about its other business, and assume this is at a time when the Common Law Division is not as busy. A rule-making body might well say let us transfer this type of matter to the Common Law Division.

It would not follow that that is a matter which should be dealt with by the District Court as a matter of policy. We submit it is simply an unlikely intention that whatever division happens to be adopted at some time in the future between common law and equity should necessarily apply to the jurisdiction in the District Court. On the other hand - - -

KIRBY J: But again I repeat the problem of using this fiction of intention. When you actually get down into the engine room of the language used by Parliament it is “would be assigned”. It is not “is assigned”. One would have expected, if your construction were the correct one, that it would have referred to the assignment as at the particular time and therefore would be “is” rather than “would be” which is a provisional or contingent verb which is designed to accommodate the fact that from time to time jurisdiction tends to be shifted.

MR BENNETT: Your Honour, it is equally capable, we would submit, of being read as “which if brought as at the date of this Act in the Supreme Court is of a type which would be assigned to the Common Law Division”.

GLEESON CJ: Section 5 of the Interpretation Act (NSW), which deals with the application of the Act, provides that everything in the Act applies “except in so far as the contrary intention appears”.

MR BENNETT: Yes.

GLEESON CJ: So the concept of intention is made by the operative or pivotal provision of the Act, the point of reference.

MR BENNETT: Yes, under the Interpretation Act, that would be so, your Honour. We say we are not, but if we were that would be relevant and there would be a contrary intention. One gets the same provision in applying common law rules of interpretation, whatever they are.

KIRBY J: I am not saying it is not a fiction that is used from time to time. I have used it myself. But there is a danger in it and it is that you slip away from the actual words in which Parliament has expressed itself which is what the duty of the court in giving meaning to a statute takes the court to every time.

MR BENNETT: Well, we would submit, your Honour, that the words would be a classic patent ambiguity. As a matter of English they are capable of having either meaning – are equally capable of having either meaning.

KIRBY J: All I say is you would have expected it on your interpretation to read “which if brought in the Supreme Court are assigned to the Common Law Division”, but “would be” is contingent and appears to contemplate variation from time to time.

MR BENNETT: No, your Honour, because if they were brought at the date of the Act, they are still hypothetical proceedings. Either way, one is talking about hypothetical proceedings, not actual proceedings. “Would be”, the subjunctive has to be used because the proceedings are hypothetical. It says nothing about time.

GUMMOW J: That is right. So let us look at 44(1) for a minute. This court has jurisdiction, the District Court has jurisdiction – henceforth I suppose you would read that, would you not?

MR BENNETT: Yes.

GUMMOW J: Yes:

to hear and dispose of the following actions:

(a) any action of a kind:

(i) which if brought [now] in the Supreme Court, would be assigned to the Common Law Division –

you say, do you not?

MR BENNETT: Yes, your Honour.

GUMMOW J: How then do you make (ii) work, “in which the amount claimed”? That does not have any hypothesis in it, does it?

MR BENNETT: No, your Honour.

GUMMOW J: So you say, do you, in which the amount claimed at the time the action is in fact brought at some future time does not exceed what is then the court’s jurisdictional limit; is that right? There is a switch between (i) and (ii) in structure, if you think about it.

MR BENNETT: Your Honour, it appears at page 56 and (ii) reads “in which the amount claimed does not exceed $750,000”.

GLEESON CJ: I was going to say, do we have different versions of section 44(1)?

MR BENNETT: Yes, it changed during 1998. It was changed once during the year.

GLEESON CJ: But Chief Justice Spigelman at page 56 of the appeal book says:

The relevant limit is found in s44(1)(a) of the District Court Act (1973) which provides –

and he then sets out provisions different from the provision in your opponent’s written submissions.

MR BENNETT: Yes. Well, we rely on the - - -

GUMMOW J: The relevant time is the time of the commencement of the jurisdiction, the action, which was in 2001, was it not?

MR BENNETT: Your Honour, in either case one has to compare what appears in the proceedings when they are commenced - - -

GUMMOW J: I am just trying to work out for the moment the right text of section 44(1)(a).

MR BENNETT: We had assumed it is the text at page 56, your Honour.

GUMMOW J: Thank you.

GLEESON CJ: That is different from the text that your opponents tell us is the text.

MR BENNETT: Yes. May I come to that, your Honour, and deal with - - -

GLEESON CJ: We had better come to it because whatever is the outcome of this case, we are going to look pretty funny if we do not get the text right.

MR BENNETT: Yes, your Honour, I relied on the Chief Justice, but I will - - -

GUMMOW J: Is page 56 the text as it stood on 28 August 2001 when the statement of liquidated claim was first filed, page 1?

MR BENNETT: As I understand it, it is, your Honour.

GUMMOW J: The answer is yes? All right.

MR BENNETT: I think the other version existed for six months during 1998. I say that subject to correction and I will have that checked.

GUMMOW J: I understand what you say. Well, that then helps you, I think, because you read the Act and you say look at page 56. Subject to this Act, this District Court has jurisdiction now and hereafter to hear and dispose of an action which, if brought now in the Supreme Court, would be assigned, and which the amount does not exceed $750,000.

MR BENNETT: Yes. Your Honour, the way I put it is this. In relation to each of the two conditions one has to compare what appears in the action when it is commenced with a criterion. In paragraph (ii) that criterion is a fixed sum of money. In paragraph (i) that criterion involves asking the question, “Would the kind of action be one which if brought would be assigned to the Common Law Division?”

The question is at what time one asks that question. We say the starting point is that clearly what the legislature did was to say, “We have in mind the sort of criteria applied in the Supreme Court to determine the division between jurisdictions. That seems to be what we are aiming at. Therefore, let us adopt that by reference rather than spelling it out.”

GLEESON CJ: Was it the case that in February 1988 the actions that were assigned to the Common Law Division were a residual class of action? In other words, to find out what actions were assigned to the Common Law Division you went through the list of all proceedings that were assigned to other Divisions and eliminated them and said everything else was assigned to the Common Law Division. Is that the way it worked?

MR BENNETT: Yes, your Honour, although I do need to check the precise date of the amendment to section 44(1)(a) of the District Court Act and the passage of the Courts Legislation Further Amendment Act 1998 referred to in paragraph 11.

GLEESON CJ: At the moment we do not seem to have before us a comprehensive document that shows the pattern of assignment of cases within the Supreme Court as at February 1998.

MR BENNETT: Not a comprehensive one, no, your Honour. As I understand it - - -

GLEESON CJ: Would the parties please prepare such a document and let us have it within seven days of today.

MR BENNETT: I will have that done, your Honour.

GUMMOW J: There is another matter, I think, on which we need some help too. Can we look at the further amended statement of claim. This involves the tax legislation. See on page 12, line 37:

By force of section 222AOC of the ITAA36, the defendant became liable to pay to the Commissioner a penalty . . . which is –

Then if one goes to 222AOC which we were looking at earlier in the Tax Act, it says failure to comply then “is liable to pay to the Commissioner, by way of penalty”. What does not appear to be in play at the moment is any equivalent of section 209 as it used to exist in the Tax Act. Section 209 said any unpaid tax may be sued for and recovered in any court of competent jurisdiction.

MR BENNETT: Yes, that is section 221R, your Honour.

GUMMOW J: That may solve my problem.

MR BENNETT: That provides:

(1) An amount payable to the Commissioner under the provisions of this Division shall be a debt due to the Commonwealth and payable to the Commissioner, and may be sued for and recovered in any court of competent jurisdiction by the Commissioner or a Deputy Commissioner suing in his official name.

HAYNE J: How did that engage with Division 9? I can understand its engagement in respect of Division 2, collection of instalments of tax, but on persons other than companies, you may be right but you have to take me very gently by the hand through this.

MR BENNETT: There are a number of sections which one has to go through. I will have them listed in a neat form at 2.15, your Honour, but in a sense one does not need 221R - - -

GUMMOW J: I am not sure about that.

MR BENNETT: - - - because 222AOC creates the liability.

KIRBY J: Which sections?

MR BENNETT: Section 222AOC. I think my learned friend and I are actually in agreement on this question. Section 222 AOC says that you are “liable to pay the Commissioner, by way of penalty” - - -

GUMMOW J: The position shortly is, Mr Solicitor, when you have a federal statute creating a penalty, you usually have another provision that says how the penalty may be imposed. That is what one is looking for.

MR BENNETT: Yes, I understand that, your Honour. I simply make the point that if - - -

GUMMOW J: Your candidate at the moment is 221R, and there may be a question mark about that and you do not look at it.

MR BENNETT: Yes. I will see if there is any other I can add to that.

GLEESON CJ: Is that a convenient time, Mr Solicitor?

MR BENNETT: Yes, your Honour.

GLEESON CJ: We will adjourn until 2.15.

AT 12.44 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.16 PM:

GLEESON CJ: Yes, Mr Solicitor.

MR BENNETT: If the Court pleases, I propose first to deal with the two questions I was asked about legislative provisions at different times, then to deal very briefly with the Judiciary Act, then to return to my argument on the first issue of always speaking and then come to the second and third issues.

The provisions of section 44 that your Honour the Chief Justice referred to from my learned friend’s submissions which refer to the jurisdiction limit from time to time, we have not worked out exactly when it came in but we have managed to work out that it is between 2001 and 2005, so we will have a document for your Honours which we will prepare within seven days that will give those details, but for present purposes it was not in force at any material time relevant to this case. So it can be ignored for the purpose of argument. It is a later provision.

GUMMOW J: So what appears at page 56 of the appeal book - that is the Court of Appeal’s judgment – was not the right section. Is that right?

MR BENNETT: That is the right section, your Honour.

GUMMOW J: It is the right section.

MR BENNETT: What is not the right section - - -

CRENNAN J: In paragraph 20 on page 7 of the appellant’s submissions.

MR BENNETT: Yes, I am indebted to your Honour. That is the paragraph that came in later some time. We have narrowed it down to between 2001 and 2005. I cannot give your Honours greater particulars than that at the moment. I apologise for that.

HAYNE J: The synopsis legislation folder contains a number of prints as at dates, one of which speaks of an historical version valid from 22 January 2001 to 31 December 2001 which has the 750,000 figure in it.

MR BENNETT: Yes, that just means that was the version during that period. Those are not necessarily the outer limits of the period in - - -

HAYNE J: No, I understand that.

MR BENNETT: Yes, I think it is what the searcher asked for when putting in the search. The other question that I was asked about was the section which operates on section 222AOC and the answers, your Honours will be horrified to learn, is section 220AAZA(1)(e). Now, your Honours, section 220AAZA(1) defines - - -

GUMMOW J: I do not see AAZA at the moment.

MR BENNETT: I have copies which I can hand to your Honours if that is of assistance.

KIRBY J: What is the print we should be using?

MR BENNETT: I am handing one to your Honours.

KIRBY J: Yes, but we do not necessarily trust everything we get from the Bar table. Look at paragraph 20 that was presented to us as the thing which we were all concentrating solemnly on and you now say that it is the wrong provision. This is very tricky legislation. You can make a terrible mistake and then look very foolish, something we do not generally like to do.

MR BENNETT: All I can say, your Honour, is trust me, I am a lawyer.

KIRBY J: No, no. Some may, but I will not.

GUMMOW J: What subsection?

MR BENNETT: Well, your Honours, one starts with subsection (1) and your Honours see that a:

recoverable amount means any of the following amounts:

and one of them is:

(c) a penalty payable under Subdivision E –

I am sorry, I will start again:

(e) a penalty payable under Subdivision B of Division 9 in relation to a company’s liability –

That, I am told – I have not personally checked this – includes section 222AOC. My learned junior will just confirm that, but I am sure that is right. Then subsection (2) of this section provides “A recoverable amount” as so defined “is a debt due to the Commonwealth”. Subsection (3) says it is “payable to the Commissioner”. Subsection (4) says it:

may be sued for and recovered in a court of competent jurisdiction by the Commissioner or a Deputy Commissioner - - -

KIRBY J: Now, that is not in the print which we have, or certainly I have, which is Reprint No 9 of 31 October 1994. So, I mean, on the face of it, this is just an amendment to the 1936 Act - - -

MR BENNETT: It was inserted, your Honour, in 1998.

GUMMOW J: Act number?

HAYNE J: Act 47 of 1998, section 3 and Schedule 4 item 1, at least according to the note.

MR BENNETT: I am indebted to your Honour.

HAYNE J: I hope somebody is following this legislative chain with considerable care, Mr Solicitor, because chains of this kind break.

MR BENNETT: Yes. Your Honours might note, just so your Honours are not misled by it, if your Honours look at section 220AAZA(12), your Honours will see that:

(a) subsections (2), (3) and (4) do not apply in relation to a recoverable amount that becomes due and payable on or after 1 July 2000 -

but the relevant amounts in this case became due and payable before that date.

GUMMOW J: That is right. That is why we are not in the Taxation Administration Act.

MR BENNETT: Yes.

HAYNE J: They became due and payable, did they, on one of the dates in 1998 or 1999 identified in page 13 of the appeal book in the particulars under paragraph 9 being 14 days after the dates specified in those particulars, being the dates of the notices?

MR BENNETT: Yes, that is my assumption also, your Honour. I so understand.

GUMMOW J: Just going back to AAZA(4):

may be sued for and recovered in a court of competent jurisdiction –

and that takes one to section 39(2) of the Judiciary Act.

MR BENNETT: Yes, that was the next step.

GUMMOW J: That is the footing for the Judiciary Act.

MR BENNETT: Yes.

GUMMOW J: Thank you.

MR BENNETT: In relation to the Judiciary Act there were only two things I wanted to say. One is that the limits in section 44(1)(a) are clearly limits as to subject matter of the relevant type, so they are picked up. The second is that my learned friend does not, in my submission, get any comfort from the fact that section 79 itself is an always speaking provision. What he says is it is an always speaking provision, so when it picks up a section to read it all conformably, we have to read what is picked up as an always speaking provision.

That, in my respectful submission, simply does not follow. If on the true construction of a State Act which is picked up it is an always speaking provision it is picked up as an always speaking provision. If on the true construction of the State Act being picked up it is a static provision it is picked up as a static provision. We would submit that no assistance is gained and no alteration is made merely because at a different level the Judiciary Act is an always speaking provision.

KIRBY J: That may well be so by the coalescence of the federal and the
State Act but, on the other hand, it is a fair comment that the federal Act provision is an indication of what would in any case be commonplace that jurisdictional provisions change from time to time and therefore one should not be too surprised that where the State Act uses the definition of a “jurisdiction” that that is not going to usually be static, that that is going to change from time to time.

MR BENNETT: Yes, well, your Honour, in this area there is something else that needs to be noted and that is that if the legislature wishes, it is easy for it to resolve the controversy in either direction. It can easily say when it enacts a provision which refers in some way to another provision “as amended from time to time” or it can say “in its present form”. It is very easy for it to do either. The problem we face in this case is what happens when it does neither and in that situation what we have to do is see if the Interpretation Act applies and, for reasons I will come to, we submit it does not, and if it does not, one then has to look at common law rules of interpretation assisted by all the usual legislative aids in the case of any patent ambiguity, of parliamentary intention and extraneous material and so on and back where - - -

KIRBY J: Yes, but it is a fair comment, is it not, that when Parliament used a referent, being the jurisdiction of a particular Division of the Supreme Court, that it must be taken to know that that jurisdiction varies and changes from time to time.

MR BENNETT: Yes, and that works both ways, your Honour.

KIRBY J: Of its character, of its nature.

MR BENNETT: Yes.

KIRBY J: That rather implies that you are picking it up as it varies from time to time rather than as at a particular time.

MR BENNETT: No, your Honour, we would respectfully dispute that and the reason is very simple, because what one has to do if one is looking to presumed intention in the way that courts have to do, what one has to say is, was this a case of the legislature looking at another Act, saying “That’s a good idea, let’s adopt that”, or was it a case of the legislature saying the principles that apply in this other area should apply exactly the same in this area. That is the ultimate question and, in my respectful submission, it is a highly unlikely and, in a sense, unreasonable attribution of intention to take the latter knowing that it changes from time to time and knowing that allocation between Divisions of the Supreme Court has really nothing to do with allocation of jurisdiction between the District Court and the Supreme Court.

One would not expect to find the same divisions. There is no reason for there to be the same divisions. That strongly suggests, when combined with the frequency of amendment, that what the legislature has done is very simple. It said, “Look at the division that the Supreme Court has at the moment. That seems like a good idea, let us adopt it”.

KIRBY J: Yes, but in a sense the fact that it is adopting this artificial construct is against the notion that this is a very rational thing fixed at a particular time. It is really saying adopt this reference and acknowledge that of its very character, of its nature, of the nature of divisional arrangements it is going to change over time. We accept that.

MR BENNETT: No, your Honour, with respect, it is not an artificial construct.

KIRBY J: That is our intention.

MR BENNETT: It is not an artificial construct. What they are saying is “We want to set out what a Division is. We see what the Supreme Court does internally at the moment between Common Law and other Divisions. Yes, that is what we want to do, but rather than set it all out again, we just refer to the other provision as a shorthand form.” That is the logic of it, your Honour. In my respectful submission, there is nothing artificial about that. It is an unfortunate drafting technique, it has been criticised many times by courts. There are some cases in England which contain some fairly vituperative criticism of the practice of Parliament referring to one Act in another. One can understand why.

GLEESON CJ: Mr Solicitor, on 2 February 1998, was there an Administrative Law Division within the Supreme Court?

MR BENNETT: I do not know the answer to that question, your Honour. We have not had opportunity to research that. I will have that looked up and include that in the additional material we provide.

GLEESON CJ: The reason I ask the question is because what appears in paragraph 9 on page 56, where it is said that:

on 2 February 1998, taxation proceedings were assigned to the Common Law Division -

and then there is a reference to a provision that simply says:

there shall be assigned to the Common Law Division all proceedings not assigned to another Division -

If there were an Administrative Law Division on 2 February 1998, that seems surprising.

MR BENNETT: Yes. Your Honour, I will have that checked along with the other details about their history.

GLEESON CJ: Thank you.

GUMMOW J: I think the provisions for tax appeals in the old-fashioned sense by that stage had been changed under Part 5C of the Administration Act to go purely to the Federal Court. What had been jurisdiction of the State Supreme Courts it had in so-called tax appeals had gone by then. It had been in the administrative jurisdiction when Justice Mahoney was a primary judge. I can remember he used to sit in the - - -

GLEESON CJ: The stamp duty appeals.

GUMMOW J: Yes.

GLEESON CJ: Proceedings used to come by way of stated case, as I recollect it.

MR BENNETT: It is also my understanding that there were no judges of the Administrative Law Division who were not also assigned to at least one other Division. It was a division that had no unique judges, if one likes. That is my understanding. I started by referring to a decision of this Court in Deacon v Commissioner of Government Transport [1957] HCA 35; (1957) 97 CLR 535. I had failed to appreciate that case involves two separate aspects of my argument so I stopped dealing with it before I finished because I thought it was on the other part and I omitted the part which deals with this part of my argument. I apologise for that. May I return to that case.

The first full paragraph on page 546 deals with three topics. The first topic which goes down to the words “even though modified” about a little over halfway through the paragraph is the distinction between amendment on the one hand and repeal and re-enactment on the other. We are not concerned with that. The next two sentences are concerned with a distinction between a reference and a referential adoption, which I will come to when I get to dealing with reference in the second part of my argument. The third part of the paragraph beginning “Nor do we think” is the part that is relevant to my present argument. Your Honours see that what their Honours say is:

Nor do we think it possible to construe that referential adoption as itself conveying what may be called an ambulatory intention to incorporate the provisions in whatever shape they may afterwards be thrown by amendment. We think that sub-ss. (2) to (7) of s. 10 are simply incorporated as part of s. 124(3) in the terms in which they were expressed at the time and all that remains is to apply the sub-sections. The result may be due to a legislative oversight, but even if we knew that to be so it could make no difference.

Now, this was a particularly strong case because it is a surprising case on the facts for not having an ambulatory construction. This was where in relation to employees of the Commissioner for Government Transport there were provisions for compensation, including the payment of ambulance costs, and in relation to ambulance costs it incorporated by reference a number of provisions of the Workers Compensation Act. Those provisions included – and this was what was relevant in the case – upper limits which had changed, and the result was that the unfortunate employees of the Commissioner for Government Transport when they got taken anywhere by ambulance were limited to the amounts in the original Workers Compensation Act, which were far below what the true costs were. So it was quite a surprising result - - -

KIRBY J: Not so surprising in 1957.

MR BENNETT: All I am saying is, your Honour, it was a strong case for taking the other view to the extent that there were two views open, but the court still took the view for which I contend. Obviously both my learned friend and I could no doubt let our imaginations run free and think of examples where it is absolutely obvious they must have intended the Act at the time or it is absolutely obvious they must have intended the Act from time to time.

KIRBY J: It may be this all goes to prove what is often said by judges that matters of statutory construction which are finely balanced are very substantially matters of impression.

MR BENNETT: Yes.

KIRBY J: I mean, you have to do the analysis, you have to go through all the ladders and the snakes, but when you ultimately come to judgment you are really on your own.

MR BENNETT: Yes, I would not disagree with that, your Honour. So that is Commissioner for Government Transport v Deacon. The second case is Hore v Albury Radio Taxis Co-operative Society Limited [2002] 56 NSWLR - - -

KIRBY J: This is still on your first point?

MR BENNETT: Yes, your Honour – at page 210. This is a decision of Justice Campbell sitting in the Equity Division. My learned friend quoted the case for a number of general propositions about interpreting the legislation in a way that makes the overall scheme workable and matters of that sort. We have no difficulty with that. We submit our construction fits that more than his does, but that is not why I am citing the case.

I am citing it for a very short reference at page 219. The problem is stated at paragraph 27 where he says:

Through all these changes, the wording of the definition of “special federal matter” in the New South Wales cross-vesting legislation has remained unchanged. However, in applying that wording, there is a question of whether it should be regarded as picking up the definition in the Federal cross-vesting legislation of “special federal matter” at the time that the New South Wales cross-vesting legislation was enacted in 1987, or whether the definition should be treated as one which has an ambulatory meaning –

So this is words of a definition taken from another Act, a State Act taking a definition in a federal Act –

so that it expands, and contracts, over time, as the scope of the Federal definition of “special federal matter” expands, and contracts, over time.

Your Honour Justice Kirby asked my learned friend whether the meaning for which he contended meant that the Act waxed and waned from time to time as the jurisdiction of the Common Law Division or matters assigned to it increased or decreased.

KIRBY J: I think it was the Chief Justice’s question, actually.

MR BENNETT: Yes. Your Honours, it may not be as frequent as the changes of the moon but, nevertheless, it certainly is legislation which does change a great deal and that is the consequence of my learned friend’s construction. His Honour then says:

In my view, the latter view is the correct one.

At the bottom of that page after referring to the Interpretation Act his Honour says this:

Prior to the enactment of the Interpretation Act 1987 there was no New South Wales legislation analogous to s 68 . . . In consequence –

So he is stating what the general law rule is:

where a New South Wales statute A adopted the provisions of another statute B, statute B was adopted in the form that it took at the date of being adopted; any subsequent amendments to statute B were not incorporated by reference –

and he refers to Deacon.

Section 68 of the Interpretation Act has the effect of reversing that mode of construction.

That is authority, we would submit, for the proposition for which we contend that absent section 68 that is the starting point and one then says is there anything to take the case outside that. There is a decision in the Full Federal Court on which your Honour Justice Gummow sat called Austereo Limited v Trade Practices Commission (1993)41 FCR 1. Your Honour dealt with the matter at page 10 where, three lines into the first full paragraph on the page, about point 2 of the page, your Honour says:

At common law the position was that where a statute (the first statute) was referred to in a later statute (the second statute) the reference to the first statute in the second statute was treated as taking the first statute in the form as it stood at the date of the commencement of the second statute; subsequent amendments to the first statute were not taken into account when later construing the second statute –

Those two sentences summarise the submission I am putting to the Court here. Your Honour then goes on to say, of course:

However, the situation has now radically been changed by the Interpretation Act -

as, of course, it has in cases - - -

KIRBY J: I wonder if there is a principle of parliamentary democracy behind this, that is to say that a parliamentary democracy of Parliament can endorse and accept a state of the law in another place at a certain time, but that should not be taken to be accepting subsequent amendments in another democracy which have to pass under the first one before they become part of the law involved. It sort of goes back to a type of constitutional principle.

MR BENNETT: Yes, a Parliament cannot bind its successors.

KIRBY J: It is just not surrendering all future amendments to what is done in another place.

MR BENNETT: Yes, and there is an English case – I do not have the reference here and I may not have the name quite right – I think it is Ellenborough Estates or a name like that.

GUMMOW J: That is about restrictive covenants, is it not?

MR BENNETT: Yes, the one I am thinking of says that where the first Act says this Act may not be repealed by implication but only by express provision, that that does not bind future Parliaments and later Parliaments can amend or repeal it by implication.

GUMMOW J: That is a case in the 20s. It is L and something else.

MR BENNETT: Yes, it is not - - -

GUMMOW J: The English always talk about it in connection with Dicey.

MR BENNETT: Yes, your Honour is correct. It is not Ellenborough Estates. It is, I think, L and Park – anyhow, I will include that in the document I provide.

KIRBY J: Here, of course, we do not have a surrender to another Parliament, but a reference to something the same Parliament has done.

MR BENNETT: Well, yes, except that one that may include delegated legislation in relation to that - - -

GLEESON CJ: Here the question we have to ask ourselves is whether the Parliament of New South Wales intended that the Rule Committee of the Supreme Court could alter the jurisdiction of the District Court?

MR BENNETT: Well, your Honour, that is a way we would like to put it, too.

KIRBY J: They definitely intended that the Rule Committee of the Supreme Court could amend the jurisdiction of the Supreme Court.

GLEESON CJ: No, absolutely not. They could amend the internal allocation of business within the Supreme Court.

MR BENNETT: Yes. Now, that completes my submissions on the first of the three aspects which is the major one. The other two are much shorter. The second matter concerns the meaning of the word “reference” in section 68 of the Interpretation Act. This arises in this way. If your Honours go to the appeal book at page 56.

KIRBY J: Now, this was not in the former interpretation law of New South Wales, a provision like section 68? I think we have just read that, that this is something new, is that correct?

MR BENNETT: As I understand it, your Honour, yes. There have been provisions in various different forms from time to time dealing with different aspects of the rule. I think there may have been a similar sort of provision which operated in rather different circumstances, but I can have that checked again, if your Honour wishes. Now, the problem is this. The Interpretation Act appears at page 60 and your Honour sees it says:

In any Act or instrument, a reference to some other Act or instrument extends to the other Act or instrument, as in force for the time being.

So we are talking about a reference to another Act.

GUMMOW J: There is no reference here.

MR BENNETT: Precisely, your Honour, that is what I am about spend 10 minutes saying, but I will try and do it as fast as I can. One could start rhetorically by saying that one can read section 44(1) and one does not see the word “Act” anywhere – Supreme Court Act or Supreme Court Rules or anything. One sees a reference to a result of legislation. That is a result which might in the future be the result of legislation, the result of delegated legislation or possibly the result of judicial decision, if the Rules in the future were silent on the subject and the matter was left in some way to the discretion of judges. If, for example, in the future the rules allocating work between Divisions were removed and there was simply a rule saying you can bring a matter in any Division you like, a bit like the cross-vesting Act, but if the court thinks it would be more appropriate in another Division it can order it to be moved - - -

GLEESON CJ: The Act and the Rules say something very close to that now. At all material times they have said it does not matter if you start a case in the wrong Division.

MR BENNETT: Yes. The words are “if brought in the Supreme Court would be assigned” could on certain hypotheses pick up judicial decisions. Certainly, it does not necessarily in the future pick up an Act and it does not refer to an Act; it refers to a result. Apart from the passing reference in Deacon, which I will come back to, there is no helpful authority on this, but there is an English case on something very analogous and that is the decision in Dubai Bank Ltd v Galadari (No 2) [1990] 1 WLR 731, which I hand to your Honours. One needs to observe the (No 2), I think they go up to (No 9). It also happens to be in the All England Reports for that year but it is not in the authorised reports.

This concerned the rule which exists in most Rules of Court in Australia, if not all of them, that where a party in a pleading or an affidavit, where there is a reference to a document in a pleading or an affidavit, the other party is entitled to demand to see the document - fairly obvious and commonsense provision in, as I say, virtually all Rules of Court. The problem was how far do you have to go in referring to it for it to be a reference.

Your Honours will see that at the bottom of page 734 a notice was served requiring the tenth defendant to produce the following documents. It was said to have been referred to in Mr Escher’s affidavit. Then there is a list which runs from (a) to (q) - your Honours need not go through it at the moment, but it becomes necessary to go back to it to understand the passage that appears later on.

They deal with this starting at page 737 in the judgment of the court. Under the heading “The ‘reference’ point” at paragraph G on that page, their Lordships say this:

The “reference” point, in our judgment, gives rise to greater difficulties. Rules of court substantially corresponding with Ord. 24, r. 10 and the rules ancillary to it have been in force for over 100 years –

and refers to Lord Justice Lindley saying:

“These rules were evidently intended to give the opposite party the same advantage as if the documents referred to had been fully set out in the pleadings.”

While this statement explains the general purpose of the rules, it does not explain what test is to be applied in determining whether or not an assertion in a pleading or affidavit involves a “reference . . . to any document” –

He refers to the absence of authority. Then between C and D on page 738:

Mr. Purle, on behalf of the plaintiff, submitted that the words of Ord. 24, r. 10 should be construed with the purpose of the rule as explained by Lindley L.J. in mind and should be given their natural and ordinary meaning. From these propositions we would not dissent. The problem arises in applying them in a case where, though the assertion made in the affidavit or pleading does not specifically mention a document or class of documents, it gives the reader strong grounds, perhaps even sure grounds, for supposing that a document must exist. A simple example was canvassed in the course of argument. Let it be supposed that a deponent to an affidavit asserts that on a specified date “the property Blackacre was conveyed by A to B.” If the assertion is true, one can be more or less certain that a document effecting the conveyance exists. But would the affidavit contain a “reference to” a document within the meaning of the rule?

Mr. Purle submitted that it would. He accepted that the mere fact that a particular transaction, referred to in an affidavit or pleading, would be likely to be evidenced by a document would not ipso facto involve a “reference” to such a document. However, he made the broad submission that, if an affidavit refers to a transaction which on the balance of probabilities will have been effected by a document, that must involve a reference to such document for the purpose of the rule. Any other construction, he suggested, would be likely to lead to “canny” drafting of affidavits; the draftsman might simply state the effect of a document without specifically mentioning the document itself.

One can analogise this to the situation of legal professional privilege. If a litigant says, “I have the written advice of an opinion written by Mr X of counsel saying that I have a good case”, privilege has been waived. If he says, “I’ve been advised I’ve got a good case”, it could be verbal and it probably does not waive privilege in the opinion. It is the same sort of distinction. The court goes on:

We did not find the last point compelling. If a respondent to a pleading can infer that the allegation in question is based on a document, it is open to him to ask for further and better particulars. If a deponent has failed adequately to identify his sources of information, the other side may be able to object to the affidavit in question, or the relevant parts of it, being read. The contention does not, in our judgment, by itself justify giving an extended meaning to the phrase “referred to.”

We revert to the example of the assertion “Blackacre was conveyed by A to B.” We cannot accept the broad submission of Mr. Purle summarised above. It seems to us to involve reading the phrase “reference is made to any document” as including reference by inference. This we do not regard as the natural and ordinary meaning of the phrase. To our minds, the phrase imports the making of a direct allusion to a document or documents. If the plaintiff were correct in its broad submission, this would oblige the court to enter into a process of inference and conjecture –

and then he refers to a case called Marubeni Corporation v Alafouzos, an unreported decision in the Court of Appeal, where a deponent to an affidavit had said:

“The plaintiffs have obtained outside Japanese legal advice which categorically states that this agreement does not render performance of the sale contract illegal in any way whatsoever.”

The issues were whether the reference to “legal advice” constituted reference to a document and, if so, whether privilege had been waived.

KIRBY J: It seems a long way from the issue which we have before us, with all respect to you, I mean, which is construing a local piece of legislation which is itself a facultative provision.

MR BENNETT: It is a provision which exists in Australia in almost all courts, your Honour, and based in the same form, but it is a very useful example of the meaning of the word “reference”. If I can just show your Honours how it worked out in that case. At the bottom of page 739, the last line, your Honours see:

The tenth defendant . . . quite rightly accepted that items (l), (n), (o), (p) and (q) constituted references to documents.

Your Honours can see what those are on page 735:

(l) The all moneys legal charge –

that clearly is a document.

(n) The bank statements of Credit Suisse, Zurich –

clearly documents.

(o) The supporting credit and debit advices –

clearly a document.

(q) The certified copies of the bank statements –

clearly a document. They then say that the wrong test was applied to other items. I will not go through all of them, your Honours, but item (a) was the discretionary trust and they say that is a reference to the setting up of a trust, not the actual execution of a document, even though in all probability the production had been effected by a document and so on. If one goes through the others, it is interesting to compare. Almost all are cases where there was a lot more of a reference to a document which was held not to be one than the present case which is said to involve a reference to a statute.

What the section refers to is a state of the law, a state of the law which may be the result of a statute, of regulation, of judicial decision or of a combination of them. It might involve a combination of a rule and a case construing the rule. It is simply referring to a state of the law. On the basis of the decision in the Court of Appeal, there is no way that that is a reference. Now, of course it is a different context, but it is a context with a similar sort of purpose. It is dealing with a case where someone takes another document and refers to it in some relevant way and consequences flow. In my respectful submission, the case is useful authority in construing the Interpretation Act.

KIRBY J: It seems to me to be a debasement of the very large purpose of section 68(1).

MR BENNETT: No, your Honour, it is - - -

KIRBY J: You want to use the section for the purpose of winning this case, but we have to construe such a subsection as it is meant to operate in the generality of cases of legislation in all of its variety in the Parliament of New South Wales and, given that it is repeated in lots of other Interpretation Acts, you have to be very careful about cutting down its ambit.

MR BENNETT: Your Honour, as I have submitted, a good test is whether the legislature has (a) looked at the particular circumstance to which the other legislation refers and said those circumstances are appropriate mutatis mutandi here, in which case one would take a static interpretation, or whether they have said the circumstances in which that legislation applies are so similar to the ones before us now that it is desirable to have the same rule, in which case one would take an ambulatory construction. That is, we would submit, the most appropriate test for deciding whether any presumption is rebutted, whichever way the presumption goes, or whether as a matter of simple interpretation of a patent ambiguity one would go one way or the other.

The case of Dubai Bank was applied by the Full Federal Court in a case which I hand to your Honours. It is unreported. It is called King v GIO Australia Holdings Ltd, 24 October 2001, [2001] FCA 1487. It is a decision of Justice Moore. It was dealing with the same rule that the English Court of Appeal was dealing with and really all I need to say is that his Honour applied and followed Dubai Bank v Galadari (No 2). That appears in paragraph 14 and following, where he refers to that case and the earlier unreported Court of Appeal case and takes the same approach of giving “reference” a narrow meaning.

Your Honours, those are the submissions in relation to reference with the exception of returning briefly to Deacon [1957] HCA 35; 97 CLR 535. Your Honours will recall, in going through the paragraph on page 546, I referred to the three parts of it. If I could just very briefly refer your Honours to the middle part of that paragraph – this is page 546 at point 4. Your Honours see the words “even though modified” in the left-hand margin, it is adjacent to those words. This is the second point in the paragraph:

Moreover it is concerned with “references”. Here we have more than a reference: we have a referential adoption as law equivalent to a positive independent enactment.

He seems to be assuming that a referential adoption that amounts to a positive independent enactment is not something which is picked up by the section.

KIRBY J: Why not?

MR BENNETT: It is because, I suppose, if Parliament simply re-enacts a provision, picks it up and re-enacts it, in its application to some new referent - - -

KIRBY J: But surely that depends on how it does it. If it re-enacts it in terms, that is one thing, but if it re-enacts it by reference to another provision, as a sort of shorthand formula, then you are in the 68(1) territory.

MR BENNETT: Yes. Well, your Honour, it depends – one is obviously re-enacting it for a different purpose and suppose one has a Dog Act which has provisions about stray dogs and dogcatchers and pounds and then the Parliament enacts a Cat Act and has a section saying the provisions of the Dog Act in relation to the apprehension and detention of stray dogs shall apply mutatis mutandis to cats. Now, if someone amends the Dog Act, there is a real question whether those amendments would be intended to apply to the Cat Act and it may be that - - -

KIRBY J: Section 68(1) is designed to say, prima facie, it does, but you can, of course, rebut it.

MR BENNETT: Yes. That may be different from a referential adoption where the provisions are simply taken and applied somewhere else, almost by their own force, as it were. That was the example in Deacon itself where the ambulance fees were picked up, in a sense, to be applied to a new situation, one they did not apply to before, namely, government transport employees. That is described as a referential adoption which five Justices of this Court seemed to think was outside the Interpretation Act provision. Now, that seems to be the sort of adoption we have here but we have not been able to find any other useful discussion of that distinction. It is another reason why the section may be inapplicable.

The final part of my submissions concerns whether a penalty is a tax, fee, duty or other impost and - - -

KIRBY J: There was something in your written submissions – I did not quite understand where – I thought you were withdrawing or not advancing this part of your argument but then you went on to – do you know what I am referring to? There is somewhere where you say this is no longer part of the respondent’s arguments. I am sorry, I will try to find it for you.

MR BENNETT: Yes.

KIRBY J: It is not the Forge point. It was some point earlier that you said it was not part of the respondent’s arguments.

MR BENNETT: That may be paragraph 34 of our submissions, your Honour.

KIRBY J: Would you just explain that to me because that did not somehow seem to figure.

MR BENNETT: Yes. Paragraph 34 is dealing with a constitutional argument that is no longer put.

KIRBY J: It is not the Forge argument, is it, or the Kable argument?

MR BENNETT: No, it was another argument, your Honour. It was an argument to the effect that because there was a suggestion that this picked up something in the Supreme Court Rules there was some constitutional problem about federal law picking up something which the makers of the Supreme Court Rules could amend from time to time. It was an argument along those lines but it has been withdrawn. It is the argument that may have given my learned friend, Mr Sexton, his right to be here but, of course, his right continues even though the point is withdrawn.

KIRBY J: I thought his right to be here was the Kable/Forge point.

MR BENNETT: That would have the same effect, your Honour. The fact that the point has been raised justifies his intervention and the removal of it does not take it away.

GLEESON CJ: It has not been raised. There was an application to amend the notice of appeal that was then withdrawn.

MR BENNETT: Yes. It is something I may need in other cases - - -

GLEESON CJ: I am sure all Solicitors-General are agreed about your first proposition.

MR BENNETT: We are, your Honour.

GLEESON CJ: That is the end of it then.

MR BENNETT: One of the few things we are unanimous on, your Honour. Now, our primary submission is that a penalty is not within the words “tax, fee, duty or other impost”. A penalty is not a tax, a penalty is not a fee, a penalty is not a duty and it is not another impost, because those words must be read ejusdem generis with the words that go before. Now, my learned friend has submitted that one reason why the ejusdem generis rule does not apply is that the common genus of tax, fee and duty is something wider. It is an obligation owed to the Commonwealth and maybe having some relationship to tax.

GLEESON CJ: Bearing in mind that the penalty, if collected, goes in reduction of the tax and the tax, if paid, goes in reduction of the penalty, why is this not a provision for the collection of tax?

MR BENNETT: Because, your Honour, one way of describing what has occurred, if one looks behind the sections, is that the penalty imposed on the director is to make the director a guarantor. It is a penalty which instead of imposing a fixed fine, as most pecuniary penalties do, is a penalty which imposes an obligation as guarantor. That is, of course, a different sort of obligation to the primary obligation. Indeed, the section only operates where the company fails to deduct. It does not operate where the company - - -

HAYNE J: Fails to remit.

MR BENNETT: I am sorry, fails to remit. Where the company deducts but fails to remit, I am sorry. The section does not operate if the company fails to deduct. So if the employer company pays the employee in full without deduction of income tax, the company has, of course, committed various breaches for which there are various consequences, but the director is not subject to this liability. The reason for that is obvious. The reason is that it is obviously a much more serious matter to deduct from the employee’s salary and then, in a sense, appropriate the money by not remitting it, which is analogous in some ways to a breach of trust or a misappropriation. That is obviously very different to merely failing to comply with a statutory obligation which requires one to deduct and then remit.

So this is something worse than non-payment of tax, if I can put it that way. This is something one would expect to be accompanied by more serious consequences, and it is. The more serious consequence is it is one of the very few cases where the corporate veil is lifted and the director, as a penalty, becomes a guarantor of the company’s obligation to the Commissioner.

KIRBY J: But if we look at the “intention” of the legislation or its purpose, then is it not clear that both by the sanction that it imposes, the prevention that it encourages, the message that it sends forth, it is both to recover the tax and to send a signal by way of penalty that you are not going to get away with it and that by sending that signal and imposing the penalty to make sure that the tax is recovered. So both in the individual case and in the generality it is relevant to the collection of the tax.

MR BENNETT: That is part of the purpose, your Honour, but it is not the primary purpose. The primary purpose is - - -

HAYNE J: The Act tells us what the objects of the division are, Mr Solicitor. How does your argument accommodate what is stated explicitly in ANA? Section 222ANA prescribes the object of the division.

MR BENNETT: Yes, your Honour. The mere fact that something is an object does not necessarily change its character.

HAYNE J:

The purpose of this Division is to ensure that a company either meets its obligations . . . or goes promptly into voluntary administration . . . or into liquidation.

MR BENNETT: Yes. Well, in a sense this section achieves neither because it achieves making the director pay pursuant to the separate obligations imposed on the director. It does not necessarily lead to the company meeting its obligations except insofar as it puts moral pressure on directors to ensure that companies meet their obligations.

HAYNE J: It does more than that. Read AOB. It is no good departing from the words of the Act and casting them in terms different from what we see in the legislation itself. AOB says what the duty of directors comprises.

MR BENNETT: Your Honour, section 222AOE is ancillary to that objective. It indirectly works towards it by putting pressure on the directors to ensure that the company complies with its obligation to remit. In that sense, it achieves that objective, but that does not detract from its character as a penalty. A State or local council in imposing parking offences may have as its primary motives, certainly, the raising of revenue but that does not detract from the fact that what is created is an offence.

GLEESON CJ: Since it says if you do not as a director cause the company to remit the money, the tax, you are going to have to pay it yourself, why is it not an impost?

MR BENNETT: Your Honour, because the word “impost” has to be read ejusdem generis and the other three, none of them involve anything analogous to a penalty. The common feature of a tax, fee or duty is that it is something which is a direct means of raising revenue.

GLEESON CJ: But it is more than a penalty, is it not? It is a penalty, but that is not the whole of what it is. It is a penalty which when paid goes in reduction of the tax.

MR BENNETT: Yes, that is one of its characteristics, your Honour. That characteristic is a factor against the argument I am putting, but an insufficient one to weigh down the scales against the significance the law attaches to the concept of penalty. A penalty or fine, whatever one wishes to call it, is something which has a different character. Its purpose or at least one of its purposes is not to enrich the consolidated revenue but to mulct the director. It is a bit like the sort of argument in Clunies-Ross, where the purpose of the invalid acquisition was not to take the land for any purpose of the Commonwealth but to take it away from Mr Clunies-Ross; there is a little bit of an analogy floating around there.

KIRBY J: This is not an argument the State puts up, I think. That is correct, is it not? I do not think the State embraces this argument and, indeed, the poverty of this argument makes one doubt some of the other arguments you have been putting today. You can, however, win on either your argument 1 or your argument 3. You do not need both, is that correct?

MR BENNETT: I need argument - - -

GLEESON CJ: The fact that you do not need this argument is evidenced by the circumstance that it is an argument advanced pursuant to a notice of contention.

MR BENNETT: Yes. It is an additional reason for - - -

GLEESON CJ: This is not an argument that appealed to two of the three members of the Court of Appeal, but it was an additional problem that was seen by the third member of the court.

MR BENNETT: Yes, by Justice Gzell, yes, your Honour. I do not propose to say much more about it beyond adopting what Justice Gzell has said and saying that when one applies the ejusdem generis rule one looks for the narrowest common feature of the associated words. It is no answer, as my learned friend suggests, to say there is a broad feature of the list and therefore that is all you can get on ejusdem generis. We give the homely and classical example of a statute that talks about pigs, cows, goats, sheep and other animals, which clearly does not include a lion. Now, each of the animals in the list is an animal and if that is the relevant genus a lion would be included, but clearly it is not because for the purpose of the ejusdem generis rule you take the narrowest common element under which they are all farm animals and a lion is not.

Here, we say the relevant common feature of tax, fee and duty can be expressed in terms narrower than – or at least terms that exclude a penalty. A penalty is something which has a different primary purpose. It is part of a criminal process. I know the word “criminal” is often not used in relation to administrative offences or parking offences or matters of that sort but as a matter of strict legal analysis, that is, a parking offence is part of the criminal law as is this and that is, we submit in a different category to tax, fee or duty.

A fee, of course, as we know from the authorisation of Ramsey pricing in the Airservices Case, can have, as part of its purpose, the enrichment of consolidated revenue. One has certainly got that in many of the excise cases where licence fees were a form of taxation. A duty, of course, is simply a particular form of taxation. Those three, we submit, belong to a narrower genus which does not include the concept of a penalty, even if part of the purpose of the penalty is to enrich consolidated revenue and even if, as here, the amount corresponds to an amount that someone else would have been liable to pay.

Another way of putting it is the way I put it initially, which is that the true penalty imposed on the director is that the director is made a guarantor against his or her wishes, and that is the penalty that is imposed. That is something different to paying tax. If you ask the director, “Did you pay tax?”, the strict answer is as a matter of English meaning, leaving aside definitions for the moment – as a matter of English, the answer is “No”.

GUMMOW J: Have you any support out of the first paragraph of section 53 of the Constitution:

But a proposed law shall not be taken to appropriate revenue or moneys, or to impose taxation, by reason only of its containing provisions for the imposition or appropriation of fines or other pecuniary penalties - - -

MR BENNETT: Yes, I do, your Honour. I am indebted to your Honour for pointing that out. Of course many of the cases which say that this is not a tax – and I will give your Honours a list rather than take your Honours to them – are cases where it has been said that there is invalidity because this section is in the same Act, has taxing provisions, and therefore there is a breach of section 55 of the Constitution. That argument has been rejected in a number of cases. The cases which are in that category are Woodhams v Deputy Commissioner of Taxation [1998] 4 VR 309, then there is also Re Dymond [1959] HCA 22; 101 CLR 11, and I had thought we had one other case which referred to it.

GUMMOW J: We went through them all in the Permanent Trustee, did we not?

MR BENNETT: Yes, I think your Honour did.

GUMMOW J: About two years ago.

MR BENNETT: Yes. Well, if I may, rather than take up time trying to find them, may I simply add those to the document I will be giving - they are simply cases which say – and there are a number of single judge and lower court decisions which say it - this provision does not give rise to a breach of section 55 of the Constitution because it is not a tax, and that proposition, in my respectful submission, is quite clear.

We have put in our submissions some submissions about the word “impost” in its own right. I will not take your Honours through that. In a sense that is of less significance than the ejusdem generis argument. For all those reasons, it is our respectful submission that the appeal should be dismissed. May it please the Court.

GLEESON CJ: Thank you. Yes, Mr Solicitor for New South Wales.

MR SEXTON: If the Court pleases. On the construction question, we are generally content to adopt the submissions of my learned friend, the Solicitor-General for the Commonwealth, and to rely on our written submissions. If I could just make three short additional points. The first is that in relation to that construction question, we would not pretend that this is an issue on which one could be dogmatic, but we would say that on balance it is unlikely that the Parliament intended that the jurisdiction of the District Court initially fixed by a statute that it is enacting at that time could later be changed by internal rearrangements of business in the Supreme Court, and that - - -

GUMMOW J: What do you say about section 46 of the District Court Act, though? Section 46 said:

the Court –

that is the District Court –

shall, in any action, have power to grant any injunction (whether interlocutory or otherwise) which the Supreme Court might have granted if the action were proceedings in the Supreme Court.

MR SEXTON: I think we would have to say the same thing about it, your Honour.

KIRBY J: So that would be limited - - -

MR SEXTON: Although, in a sense, that is not an issue of internal rearrangement.

GUMMOW J: That is right.

MR SEXTON: It is an issue of the powers of the court.

GUMMOW J: Which might depend upon judicial decisions, the Solicitor for the Commonwealth said.

MR SEXTON: It may raise different questions, that provision, but in the case of 44 we would say - - -

GUMMOW J: I am thinking of asset preservation orders, for example.

MR SEXTON: Yes. In the case of 44 we would say there is a good policy reason why the construction for which we contend would be favoured. My learned friend has dealt with that issue in some detail.

GLEESON CJ: Can you go to the District Court of New South Wales and get a Mareva injunction?

MR SEXTON: Can you, your Honour?

GLEESON CJ: Yes.

MR SEXTON: I think not.

KIRBY J: I think we explored this in two cases that were in about 1999 – Pelechowski was one. I think it was a District Court contempt case. Then there was another case at about the same time which explored the very considerable, somewhat surprising, jurisdiction of the District Court in equitable matters.

MR SEXTON: I am not sure of the answer to the question. It certainly does not happen, I think, as a matter of practise, but it may be possible.

KIRBY J: It is a general impression, is it not, that the jurisdiction of the District Court has enlarged in recent years as work has been offloaded, in a sense, from the Supreme Court to the District Court?

MR SEXTON: There have been some shifts in jurisdictions, that is so, but I am not sure that that has not been larger volumes of matters that have always been within the powers of the District Court. There are monetary limits, of course, which have been increased.

Your Honours, the second point that we would add is simply to say that section 39(2) of the Judiciary Act is, we would say, a false issue in this case if it still an issue of any kind. Of course it is the basis for federal jurisdiction but what that provision does, we would say, is to accept the jurisdictional limits of the relevant State system. So the question in this case is simply what the limit is and that takes one back to the construction question again, which will answer that question.

The final, the third matter, is a question that was raised by the Chief Justice. If I could take your Honours to page 56 of the appeal book. I
am not sure that this is really an answer to the Chief Justice’s question but your Honours will see there in paragraph 9 a reference to the Courts Legislation Further Amendment Act 1997 which came into force on 2 February 1998. That is the provision that inserts the relevant amendment in the District Court Act. The Chief Justice says there that “At that time” and he sets out section 53(4) of the Supreme Court Act. I think the Chief Justice asked whether there were other Divisions - - -

GLEESON CJ: No, I asked whether there was an Administrative Law Division at that time.

MR SEXTON: Yes, well, 53(4) would certainly suggest that there were other Divisions apart from Common Law and Equity. I was about to say that if one looks then at paragraph 11, the 1998 legislation which it says abolished a number of Divisions, that legislation came into effect on 1 July 1999. The question is whether the Administrative Law Division was abolished at that time or earlier. Now, I do not think that anyone has the legislative materials here to answer that question today, but obviously that can be done, but the answer to your Honour’s question is that it either happened then or it happened shortly beforehand. It was still there, your Honour, at 2 April 1996, so the question is what happened between that date and 1 July 1999, whether it was abolished by that last piece of legislation or whether it happened before that in that proximate three-year period.

KIRBY J: So it does not exist now, the Administrative Law Division?

MR SEXTON: No, there are only the two Divisions, Equity and Common Law.

KIRBY J: The Criminal Law Division has gone and the Commercial Division has gone?

MR SEXTON: Yes. Unless there are any other matters, your Honours, those are our submissions.

GLEESON CJ: Thank you, Mr Solicitor. Yes, Mr Hamilton.

MR HAMILTON: Thank you, your Honours. Perhaps I could assist. On the last point that the Solicitor-General for New South Wales mentioned, the Courts Legislation Further Amendment Act 1998, which is in the large bundle of materials under the tab Supreme Court Act, and this is not internally tabbed I am afraid, but paragraph [4] of schedule 10 of that Act says:

Section 53

Omit the section. Insert instead - - -

KIRBY J: I am not sure where I should be looking, I am sorry. These are not very well paginated.

MR HAMILTON: No, I apologise, your Honour.

KIRBY J: We are in the large relevant legislation filed by the appellant?

MR HAMILTON: Yes.

KIRBY J: And we are behind the green tab which is Supreme Court Act 1970?

MR HAMILTON: Yes, 1970. It is about halfway through is the best I could do.

KIRBY J: What are we looking for? Which Act?

MR HAMILTON: The Courts Legislation Further Amendment Act 1998, No 172.

GLEESON CJ: This is what it used to be like before the Court of Criminal Appeal got a paginator. Counsel would say, “You look at that large bundle and about two-thirds of the way through you will find a photograph of the body”.

KIRBY J: I have it.

MR HAMILTON: Yes. That seems to be the answer to the abolition of the former divisional arrangements in the Supreme Court and the establishment of the two Divisions, the Common Law Division and the Equity Division.

KIRBY J: Where is the abolition actually found?

MR HAMILTON: It simply says “Omit section 53” and section 53 previously provided, if you go back, for example, to Reprint No 9 because it precedes it, section 53 then has provision relating to the assignment of business and deals with Family Law Division, Administrative Law Division, et cetera.

KIRBY J: I think we will need a note on this setting it out. I thought you were going to rise to your feet to explain how you gave us the wrong provision of section 44, which is an egregious mistake.

MR HAMILTON: Yes, that was indeed my first matter that I had on my list and it was to apologise for giving you that section. In our outline of submissions, that is section 44 as it stands today, not as it stood when it was introduced.

KIRBY J: Now, what is there in paragraph 20 of your written submissions? Do you say section 44 as it stands today?

MR HAMILTON: However, the relevant provision from our point of view is section 44(1)(a)(i).

KIRBY J: Yes, but you do not construe provisions of legislation in isolation. I thought we said this so many times. You have to look at least at the part – and probably the whole Act – and therefore it is relevant in this case to look at (ii) because, as it has been pointed out, if at the relevant time the amount is a fixed amount, then you have a fixed amount as at a certain time and that does give some support that (i) is also a fixed content at the same time. That is an argument against you and that is why it is relevant to have very clearly in your mind what is the relevant provision of 44(1)(a)(ii) at the relevant time for these proceedings.

MR HAMILTON: Well, I apologise again and I recognise - - -

KIRBY J: It is not apologies, but I just need to know what is exactly the provision that applies and where I find it and how I can go ahead and write whatever reasons are offered in this case.

MR HAMILTON: Well, the text of what is set out in paragraph 8 of the Chief Justice’s judgment is the text as at 2 February 1998 and it was not until some time later that the $750,000 amount was removed and the other verbal formula was applied.

GUMMOW J: But as it appears at page 56, is that section 44(1) as initially enacted?

MR HAMILTON: Yes.

GUMMOW J: And as it continued to be until the institution of this action in August 2001? That is all we have to know really. I am a little suspicious because the notes to Reprint No 8 as in force in August 1998 that I have of the District Court Act shows that as at 1998 that section had been amended six times, I think. So it had better be checked very carefully.

MR HAMILTON: That is Reprint No 8 that you were referring to, your Honour?

GUMMOW J: Yes.

MR HAMILTON: Yes.

GUMMOW J: Yes, Reprint No 8, that is right. Anyhow, do not detain us now any further.

MR HAMILTON: There were a couple of other questions that we may be able to assist the Court with. At one point a question was raised about the reason for amendment and assignment of additional business over to the District Court. At tab 4 of my learned friend’s legislation book there is a second reading speech about the District Court Amendment Bill 1997.

On page 1058 in the first column at about point 8 there is a discussion about the amount of time the Supreme Court takes to dispose of civil matters and the idea that:

To ensure that judicial and court resources are utilised more efficiently, it is proposed to increase the jurisdiction of the District Court in a number of ways.

Including raising the monetary jurisdictional limit from $250,000 to $750,000 and there is some other changes as well about motor accidents and other claims. That addresses that question.

KIRBY J: Is the relevant date for the application of section 44(1)(a) 29 August 2001 being the date upon which the statement of claim was filed making the Commissioner’s claim?

MR HAMILTON: That is what we say, yes.

KIRBY J: Do you understand that to be common ground?

MR HAMILTON: I do, yes.

KIRBY J: I, myself, would be helped, picking up Justice Gummow’s point, if you would have a schedule which sets out the amendments to that section from the time it was first introduced, it began with the claim at law, and setting an amount as they were at different times and indicating the relevant date so that we can understand it because at the moment, and I may be wrong about this, I understand the provision that is stated in your submissions paragraph 20 to be a provision that pre-existed the provision that is appearing in paragraph 8 of the Chief Justice’s reasons, but something you just said leads me to think that maybe it is a provision that came after the provision that the Chief Justice has stated.

MR HAMILTON: Yes, that is according to the legislation.

KIRBY J: When you set that out, I would be grateful if you would respond to the suggested argument that the provision as set out in the Chief Justice’s reasons is more consistent with a frozen interpretation because of the fact that (i) speaks of:

which, if brought in the Supreme Court, would be assigned to the Common Law Division –

that being the suggested interpretation put for the commissioner because:

(ii) in which the amount claimed does not –

now exceed $700,000. Therefore, that would be a consistent way to interpret it, whereas my first impression on reading the provision as stated in paragraph 20 of your submissions is that because (ii) appeared to be ambulatory, being the court’s jurisdiction limit from time to time, that suggested that (i) was ambulatory, that being the jurisdiction of the Common Law Division from time to time.

So it is not unimportant, I think, to get the section right and then see how it all fits together. You have to answer the suggestion if it is the provision on paragraph 8 of the Chief Justice’s reasons that that stands against the interpretation that you are advancing to the Court.

HAYNE J: The provision which appears at paragraph 8 appears to have been introduced into the District Court Act by the Courts Legislation Further Amendment Act 1997 Act No 141, by paragraph 2 of item 1.5 of Schedule 1 to that Act. That seems to be its genesis.

KIRBY J: Somehow I do not, say, see Sir Frank Kitto sitting through an ordeal such as this, but we have to get it right now that we have embarked upon this journey and I think the Court has to look to the parties to help us.

MR HAMILTON: Yes, your Honour. There were two questions the Chief Justice raised about the District Court Act as well. The first of those was whether or not the District Court had a power to order specific performance and section 134(1)(b) gives a limited power to order:

the specific performance, rectification, delivery up or cancellation of any agreement for:

(i) the sale or purchase of any property at a price not exceeding $20,000 –

and section 46 as well about the injunctions. I do not have the history of it in this Reprint No 11, but one approach to that may well be that if that were originally in the District Court Act as it was enacted in 1973, if you were to give a static interpretation to this Act generally, that perhaps it does not empower the District Court to grant injunctions in matters the way the law of injunctions has developed since that time.

GUMMOW J: We have all got before us now, or available to us immediately, the Courts Legislation Further Amendment Act 1997 No 141. If one goes to page 12 of that you will see at the top of the page “District Court”, then item [2] “Section 44”:

Omit section 44(1)(a) and (b). Insert instead –

and that is the text, so far as we can work out, as was still in force at the critical date in 2001. That is what we need to be sure of, right?

MR HAMILTON: Yes.

GLEESON CJ: The second reading speech that you referred us to makes it clear – and this accords with my own recollection – that this legislation was enacted in contemplation of a large scale transfer of pending proceedings in the Common Law Division of the Supreme Court of New South Wales to the District Court, because as the Minister points out, it had been found that something over half of the judgments given in all cases in the Common Law Division of the Supreme Court were for amounts that were within the existing jurisdictional limits of the District Court?

MR HAMILTON: Yes.

GLEESON CJ: The implication being that cases were being commenced in the Supreme Court because of some differences in cost scales.

MR HAMILTON: If the Court pleases.

GLEESON CJ: Thank you, Mr Hamilton. We will reserve our decision in this matter and we will adjourn until 10.15 tomorrow.

AT 3.51 PM THE MATTER WAS ADJOURNED