Palmer & Anor v MacDonnell Shire Council [2011] HCATrans 273 (29 September 2011)

Last Updated: 6 October 2011

[2011] HCATrans 273

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Darwin No D3 of 2011

B e t w e e n -

TONY FRANCIS PALMER

First Applicant

MARIE ELANA ELLIS

Second Applicant

and

MACDONNELL SHIRE COUNCIL

Defendant

FRENCH CJ
BELL J

TRANSCRIPT OF PROCEEDINGS

FROM ADELAIDE BY VIDEO LINK TO DARWIN

ON THURSDAY, 29 SEPTEMBER 2011, AT 11.27 AM

Copyright in the High Court of Australia

MR D.M.J. BENNETT, QC: If the Court pleases, I appear with my learned friend, MR P.F. McINTYRE, for the applicant. (instructed by Midena Lawyers)

MR A. WYVILL, SC: If the Court pleases, I appear with my learned friend, MR T.W. ANDERSON, for the respondent. (instructed by Povey Stirk)

FRENCH CJ: Yes, Mr Bennett.

MR BENNETT: Your Honours, I have an outline of oral submissions of which I hand four copies to the Court.

FRENCH CJ: That is an unexpected luxury.

MR BENNETT: Your Honours see that we propound three propositions in this application. The first is the constitutional argument. The argument flows from the fact that this Court’s powers, pursuant to the Marbury v Madison doctrine to invalidate Commonwealth or State or Territory legislation cannot be stymied by the legislature whose legislation is impugned. There are a number of examples of that in different areas, none directly in this area. Antill Ranger is of course the best known where a road tax was held in this Court to be contrary to section 92 and the State passed a law saying, “Well, if you paid it in the past you can’t get it back” and the Court said that could not be permitted. That was a decision of this Court affirmed by the Privy Council.

A second example is from the Sportodds Case. That is Sportodds Systems Pty Ltd v New South Wales [2003] FCAFC 237; (2003) 133 FCR 63. I have copies of the relevant bits for your Honours. It is not in the volume. In this case the Full Federal Court applied a dictum of Justice Kirby in this Court where it was said that in a constitutional challenge where the purpose of Parliament is relevant, Parliament cannot either by parliamentary privilege legislation or reliance on the 17th century Bill of Rights prevent this Court looking at parliamentary materials which might indicate that purpose. If your Honours go to paragraph 39 of the Sportodds decision your Honours will see in that case in the last sentence:

in the Second Reading Speech . . . The relevant Minister referred to the perceived need to protect the racing industry in New South Wales from gambling by overseas interests and from “corporate bookmakers in the Northern Territory and the Australian Capital Territory.’

Now, it was argued, of course, that it was contrary to the parliamentary privilege legislation to use that, not for the purpose of construing the Act but for the purpose of invalidating it and saying this was a purpose prohibited by the Constitution. Their Honours cited the dictum of Justice Kirby in Egan v Willis in paragraph 40 which stressed the importance of this Court’s functions in relation to the invalidation of legislation and made the point that the Parliament cannot prevent that and they conclude:

On this basis we would accept that it is permissible to refer to the Parliamentary Debates if it is relevant to do so.

Your Honour, the principle we derive in its applicability to this case is this that when an Australian legislature, whether Commonwealth, State or Territory, enacts legislation which takes away all the property of a person or entity independently of any other ground of possible constitutional invalidity it is pro tanto invalid to the extent that it removes from that person or entity the wherewithal to bring a constitutional challenge to the legislation and it follows that in circumstances such as the present there is a constitutional imperative on the Court to allow the entity, all of whose assets are taken, to use those to challenge the constitutionality of that taking. It is not a matter of weighing or discretion. We submit it is an absolute right and a constitutional imperative.

BELL J: Can I just raise a couple of matters in the respondent’s submissions at this point, Mr Bennett, concerning the history of the proceedings and the suitability of them to ventilate the.....principle for which you contend. At application book 88, paragraph 6.1 and following there is recited the history of the proceedings when they first came before this Court before Justice Hayne and the circumstance that the – as I understand it, the point now taken was not taken when the proceedings were before the Court on that occasion and, indeed, the day after his Honour declined the relief sought the funds, or the bulk of them, were transferred into the litigation trust and then the large issue was that the respondent says the litigation trust gives rise to in terms of the position of the individual applicants to agitate the issues, if one accepts the creation of the trust. I do not see those things addressed in your submissions.

MR BENNETT: Your Honour, we submit this. First of all, Justice Mildren rejected any submission that we had unclean hands or had misled Justice Hayne. That is at paragraphs [62] to [63] of his Honour’s judgment at pages 32 to 33 of the application book and there has been no challenge to that part of his Honour’s decision. Secondly, we say that there was no misleading. The case before Justice Hayne was an application which one may think had little prospect of success for an interlocutory injunction preventing the legislation being applied pending the constitutional challenge.

This Court has said many times that except in extreme circumstances such as a case of a death penalty or I think in the Banking Case – Bank of New South Wales v Commonwealth – that apart from extreme cases where the subject matter of the litigation might be destroyed this Court does not grant injunctions against legislation on the basis that it might be unconstitutional. That was the application before Justice Hayne and it just did not involve this issue.

BELL J: It is really – if you go to application book 87, paragraph 3.3, what is said is that there are questions that one might have expected to be addressed below but in light of the way the litigation was conducted were not and, as I understand it, that is one of the bases on which it is suggested that this is not a suitable case to ventilate the large issue that you seek to put.

MR BENNETT: Your Honour, that issue arises. It was not, in our respectful submission appropriate to raise it at that early stage. There was not, apart from anything else, any threat at that stage to prevent us using the money in the litigation trust for the purpose for which it was established. There was no reason for us to assume, at that time, that we would have that problem. The most one gets is a throwaway line in argument about losing everything, but, in my respectful submission, we have taken the appropriate course. We waited until an injunction was sought and then we sought an exception - - -

BELL J: I understand that, Mr Bennett. At paragraph 3.3 on 87 another point is being made.

MR BENNETT: Your Honour, if the principles – any of the three principles for which we contend are accepted we do not need to rely on the existence of the litigation trust. That merely becomes one of the factors giving great strength to our application. This was the whole purpose of those funds. There are, of course, difficult questions about purpose trusts and perpetuities and so on which we prefer not to get into because we see the route we have taken as a more direct route, one of the three alternatives, to establishing our right to use the funds.

Your Honour, the first principle, the constitutional principle, we submit, follows. There are other ways in which legislatures might seek to stymie constitutional challenges and which we submit would be invalid. One example one can give would be this. Your Honours recall the facts of the APLA Case – the Australian Plaintiff Lawyers Association Case. If there had been a prohibition by the Commonwealth on a lawyer advertising for instructions in cases where there is a challenge to the constitutionality of Commonwealth legislation and the Commonwealth said, “You may not advertise that you are an expert in challenging legislation and seek instructions in such cases”, your Honour, that would clearly have been invalid under an implication from Chapter III.

The other examples, the examples of Sportodds and Antill Ranger and the dictum in the Banking Case about circuitous devices all come to the same thing. This Court has a vital role, indeed the whole judicial system has a vital role in determining the validity of legislation and Parliament cannot inhibit or stymie that. It is as simple as that. That is an important principle. It has not been discussed as a general principle except in the dictum of Justice Kirby which the Full Federal Court adopted and applied and in my respectful submission, this is an appropriate case to do so.

The second of the three bases arises from the judgment of Justice Pennycuick in the Carl-Zeiss-Stiftung Case. Your Honours recall this is described very fully in the judgments of the court below. That was a case where there was a claim by East German Carl-Zeiss-Stiftung to all the assets of West German Carl-Zeiss-Stiftung, Carl-Zeiss-Stiftung having originally been incorporated in Saxe-Coburg.....in the 19th century and there was the question of who was the successor and who had the assets and so on.

BELL J: I think only one member of the Court of Appeal addressed the issue of broad principle advanced by Justice Pennycuick.

MR BENNETT: Yes, that is so, your Honour.

BELL J: And, indeed, the broad principle related to final relief and there is the passage set out in the judgment of the Court of Appeal at paragraph [49] on application book 19 which would rather suggest that in the particular circumstances of this case that principle would not assist you.

MR BENNETT: Well, your Honour, Lord Justice Danckwerts seemed to be sympathetic to the point, Lord Justice Sachs was unsympathetic and Lord Justice Edmund Davies did not consider it so the Court of Appeal judgment does not help very much. Obviously, the decision of Justice Pennycuick is not a binding decision in Australia but it is - - -

BELL J: The principle that he was advancing was not one that took up the circumstances – indeed, he was quite to the opposite – respecting an injunction restraining the defendant from dealing with the subject matter of the proceeding ad idem.

MR BENNETT: Yes. I accept that, your Honour, but there is an analogy, in our respectful submission, in that one can achieve the result in two ways. One can achieve the result by saying if the solicitors receive the money they are accountable for it. One can achieve the result by saying the client is not allowed to pay the solicitor, but the effect is the same, and the principle of public policy, we would submit, is the same, that if all your assets are claimed as all your assets and leave aside cases where the claim happens to exceed the value of your assets they may be in a different category. But, in cases where all one’s assets are claimed, under some principle, whether it universal succession or statutory taking or anything else, as a matter of public policy one must be entitled if there is a challenge to such taking, to use part of what were one’s assets for the purpose of resisting. We put that as a simple rule of public policy. Justice Pennycuick’s decision was an application of that.

BELL J: In consequence there was on this argument simply no question of disclosure.

MR BENNETT: Yes, your Honour.

FRENCH CJ: That is what I wanted to ask you, just looking at paragraph [65] of Justice Mildren’s judgment at page 33, you are saying that the discretion that he was exercising there was constrained by really two absolute requirements: one that you characterise as a constitutional imperative in your first proposition; the second, that you characterise as a principle of public policy which requires the defendant be entitled.

MR BENNETT: Yes, your Honour.

FRENCH CJ: They are principles informing the discretion, or constraining the discretion, and not affected, you would say, by the primary judge’s conclusion that the claim does not appear to be very strong?

MR BENNETT: Yes, your Honour. We would make this submission in that regard that it – then the principles for which I contend may or may not apply if the constitutional claim is hopeless. There may well be an exception in such a case. This Court does not need to consider that. I do not want to address your Honours on this application on the strength of the underlying constitutional case except to remind your Honours of one passage in the pleadings which we would submit makes our case virtually indefensible by the other side.

If your Honours go to volume 1 of the filed documents, materials, and your Honours go to page 42 of that volume your Honours will see four paragraphs of the defence in which admissions are made which we submit make the case unanswerable under the Racial Discrimination Act. Your Honours see in paragraph 68:

The property of the 22 Organisations was compulsorily acquired pursuant to the Acquisition Schemes.

69. The 22 organisations ceased to exist pursuant to the Acquisition Schemes on 1 July 2008.

70. The membership of each of the 22 Organisations were people of the Aboriginal race.

71. No organisation incorporated pursuant to the Associations Incorporations Act (NT) the membership of which included people not of the Aboriginal race were affected by the Acquisition Schemes.

Those are admitted. In those circumstances to say that our case for repugnancy for the Racial Discrimination Act is weak simply cannot be right. It is almost unanswerable.

FRENCH CJ: What do you say to Justice Mildren’s statement that – again at [65] – that there is no remedy open to the applicants?

MR BENNETT: Your Honour, it is correct to say, as is said at the beginning of paragraph [57] that:

Assessment of the prospects of success of the various grounds of the proposed constitutional challenge was not straightforward, and it would have been inappropriate for Mildren J to reach or express any concluded view on those prospects.

Similarly for the Court of Appeal. We accept that, your Honour. That would be so in this Court. It is only relevant, I suppose, in relation to the exception – the possible exception that if the case is hopeless our principles may not apply but that is so clearly not this case that one does not need to worry about that.

The other parts of the constitutional argument, of course, involve acquisition of property and unjust terms and repugnancy to the Aboriginal Land Rights (Northern Territory) Act. There is also a provision limiting the powers of the Minister. There are various constitutional arguments. I will not take your Honours to them. Your Honours will not need to consider those except possibly for the purpose of saying that they are not hopeless.

BELL J: I think you have had that finding from the primary judge.

MR BENNETT: Yes, I think that is so, your Honour. My recollection is that he said they were not hopeless.

BELL J: I do not think he characterised the grounds as strong but he certainly did not approach the matter on the basis that the claim was hopeless.

MR BENNETT: No. The other parts of the argument - in relation to the acquisition on just terms the answer to it is said to be the historic shipwrecks clause which the trial judge at page 29 misunderstood and referred to it as – at the top of the page. Nothing turns on that. The importance of that is that the historic shipwrecks provision here has a discretion in the court and that rather detracts from its value as giving just terms but that is, again, not a matter which your Honours will be concerned with. It is part of the underlying constitutional debate. The third proposition is the - - -

BELL J: I think that aspect of it is one that Justice Hayne had some difficulty seeing the force of, the just terms complaint, did he not?

MR BENNETT: Yes.

BELL J: Yes.

MR BENNETT: As I say, this Court will not be concerned with the underlying..... The third of the propositions is a third way of reaching the same result although it – what it says is that if one rejects propositions 1 and 2 - so it is not absolute - the cases suggest that there is a stricter test in cases where there is proprietary claim that in cases where there is a Mareva-type claim simply that the defendant does not dispose of assets so as to prevent the plaintiff executing a judgment.

What we said – and this is an important principle – is that if there is a claim to all the assets of a defendant as such or a claims to property which was prior to the events giving rise to the claim, the property of the defendant, the Mareva test should be applied rather than the proprietary test. The Mareva test is simply more appropriate where it is a case of that type. If one has a case like Carl-Zeiss-Stiftung we would submit it is inappropriate to say, “Well, we apply the stricter proprietary test. It’s more like a Mareva case than a proprietary case.” That is the third argument and it involves an analysis of Metropolitan Petar and Cardile v LED Builders and some other cases we have referred to.

FRENCH CJ: You are well into the red, Mr Bennett.

MR BENNETT: Yes. Those are my submissions, if the Court please.

FRENCH CJ: Thank you. We will not need to hear from you, Mr Wyvill.

The applicant seeks special leave to appeal from a decision of the Court of Appeal of the Northern Territory dismissing an appeal from a discretionary judgment of a judge of the Supreme Court. The exercise of that discretion is said to have been constrained by constitutional and public policy principles. In our opinion, the prospects of success on the appeal are not such as to warrant the grant of special leave. Special leave will be refused with costs.

MR BENNETT: If the Court pleases.

AT 11.52 AM THE MATTER WAS CONCLUDED