Firebird Global Master Fund II Ltd v Republic of Nauru & Anor [2015] HCATrans 15 (13 February 2015)

Last Updated: 7 July 2015

[2015] HCATrans 015

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S274 of 2014

B e t w e e n -

FIREBIRD GLOBAL MASTER FUND II LTD

Applicant

and

REPUBLIC OF NAURU

First Respondent

WESTPAC BANKING CORPORATION

Second Respondent

Application for special leave to appeal

FRENCH CJ
GAGELER J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 13 FEBRUARY 2015, AT 11.00 AM

Copyright in the High Court of Australia

MR T.G.R. PARKER, SC: I appear with my learned friend, MR J.A.C. POTTS, for the applicant, your Honours. (instructed by Clayton Utz Lawyers)

MR R.A. DICK, SC: I appear with my learned friends, MR D.J. BARNETT and MS N.D. OREB, for the first respondent, your Honours. (instructed by Ashurst Australia)

FRENCH CJ: There is a submitting appearance for the second respondent. Yes, Mr Parker.

MR PARKER: The Court will have seen that our submissions address the issues which arise under three main headings. The first concerns what might be termed the question of proceedings immunity, or immunity from the registration proceedings themselves. Does the Court have the statutory materials?

FRENCH CJ: Yes, thank you.

MR PARKER: The way in which the issues arise is this. If the Court would go to the second Act that we have referred to which is the Registration of Judgments Act. The Court will be familiar in outline with section 5 which provides for judgments where there is relevant reciprocity to be the subject of the Act. The Japanese judgment in these proceedings was the subject of relevant reciprocity at the relevant time. The key provisions in section 6 are first, section 6(1), which provides for an application to be made to register the judgment and section 6(3) which says that:

Subject to this Act and to proof of the matters prescribed by the applicable Rules of Court, if an application is made –

the court is to order the judgment to be registered. There is no discretion there. It is a command to the court. The requirements for registration are set out in section 7 and relevantly they include section 7(2) – I am sorry, once registered, then the judgment can be set aside and the requirements for setting it aside, I should have said, are set out in section 7. Relevantly, section 7(2):

Where a judgment debtor duly applies to have the registration of the judgment set aside, the court:

(a) must set the registration of that judgment aside if –

amongst other things –

(iv) that the courts of the country of the original court had no jurisdiction in the circumstances of the case –

So that is the Japanese court had no jurisdiction then even though registered it must be set aside. Then subsection (4)(c) deals with the question of sovereign immunity because it says that the court of the original country, that is Japan, are not taken to have had jurisdiction:

(c) if the judgment debtor . . . was a person who under the rules of public international law was entitled to immunity from the jurisdiction of the courts of the country of the original court and did not submit to the jurisdiction of that court.

Now, in this case, in the Japanese proceedings the Republic asserted that it was free under Japanese law from being sued. It asserted an immunity and it did so unsuccessfully. The Japanese court considered that, considered under the rules of public international law as applicable in Japan that they had jurisdiction to grant a judgment and did so. So that that is the only criterion in this Act which refers to immunity and it is satisfied.

Can I also draw the Court’s attention to section 10 which provides, in effect, that if the judgment cannot be registered then no other proceedings can be brought. So if you cannot register the judgment under this Act, you cannot do anything else. Can I also refer to section 12(1) which gives the judgment whether registered or registrable an effect for the purpose of the law of this country. So, in effect, section 12 starts by saying even before registration there is an effect in the law of this country. It then provides for registration but then it says if you cannot register you cannot take any other enforcement action.

Now, what the Court of Appeal has held is that because of the provisions of the Immunity Act this judgment is not registrable. Not only have they held that registration should be set aside on grounds not provided for in this Act, they have held that the summons which sought registration should have been dismissed, that is, it should never have been registered in the first place. That is the first issue which we present to the Court as being an issue justifying the grant of special leave.

GAGELER J: So, in your submission section 7(4)(c) is exhaustive of the topic of sovereign immunity in respect of the registration of a foreign judgment?

MR PARKER: Yes, that is right. We point to the curiosity that the Parliament has fastened on sovereign immunity. The criterion it has chosen has been immunity in the foreign court and yet the court has held that although that is satisfied there is some other provision which requires the court in this country not to give effect to that judgment by registering it or not to allow the judgment to be registered.

GAGELER J: Part of the argument put against you is a purely textual one and that is the process for which section 6 provides is properly described as a proceeding. What do you say to that?

MR PARKER: What we say to that is that it may be properly described as a proceeding but the relevant question is the one posed by section 9 of the Immunities Act because section 9 uses a concept that is broader than a proceeding. It speaks of immunity from the jurisdiction of the courts of Australia in a proceeding. Now, we say this may be a proceeding but what is being exercised, the process involved in registering a judgment does not involve the exercise of jurisdiction against a foreign state in the relevant sense.

We appeal to the analogy – rather, we appeal to the dicta of this Court in the Queensland case that we have given reference to which explains that this procedure is a special statutory procedure quite different from the old common law idea of suing on a judgment. This is not suing on a judgment. It is a statutory procedure where you register. It is not like an action in personam and we say that where section 9 speaks of jurisdiction of the courts of Australia in a proceeding it is speaking of an action in personam exemplified perhaps by the old writ of summons procedure.

FRENCH CJ: What is the court doing when it entertains and determines an application to set aside?

MR PARKER: It is exercising a statutory power and it may be exercising additional power of the Commonwealth but it is not impleading the foreign sovereign - it is not telling the foreign sovereign - - -

FRENCH CJ: It must be exercising a jurisdiction if it is exercising a power?

MR PARKER: But it is not “impleading the sovereign” and that is the phrase that comes out of the Garuda Case. It is not saying to the sovereign, “We order you to come to our court to meet a claim against you”. The claim has already been determined. What it is doing is it is saying - and, of course, one remembers that the defendant is a necessary party to the registration process - what it is saying is we are going to exercise power to register this judgment so that then we can go on and use it as a peg for enforcement action. We say that that does not answer the statutory description in section 9. Now, that issue has not been determined in earlier proceedings. Indeed, the question of the relationship between the two provisions was noted in passing in the Garuda Case but not resolved.

That, of course, is only one of the arguments that we put under this head, the special leave head, because we have two alternative arguments. The second is – the alternative is, we say, if there really is a conflict between these two Acts, if one is saying you must register the judgment and the other is saying you must not register it, then we get into the area of whether there is a conflict between the two that can be resolved. We have put our submission on that. In our respectful submission, the Court of Appeal did not really address the strength of our argument on that, that is, a claim, a direct instruction under section 6 in the later Act to register the judgment and a direct instruction based on the analysis against us in section 38 that it not be registered in the earlier Act.

Then, thirdly, and most importantly, even if we are wrong about that and these are proceedings involving the exercise of jurisdiction and impleading the sovereign in the relevant sense, one still has to deal with the issue that under section 11(1), that is, if it is a proceeding, relevantly, involving the exercise of jurisdiction, does it relevantly concern a commercial transaction?

FRENCH CJ: Now, I think you are pointing to some tension in the approach taken and the international position, paragraph 89, I think, of the - - -

MR PARKER: Certainly this. The Canadians have looked – the issues are not completely the same because the wording is not identical.

FRENCH CJ: Yes.

MR PARKER: There is a similar issue which the Canadian court determined in a way that would support us, that is, they regarded the – one looked at the underlying transaction if I can put it that way, in this case, the bond transaction. They did not give reasoning for that. Then, when the House of Lords looked at it in their context – I am sorry, the UK Supreme Court looked at it in their context, they said, well, Canada has not really given any reasons. They analysed it and by a majority of 3 to 2, in their context, they concluded in the opposite sense that we would contend for. However, as we put in our written submissions, the statutory context in England is different and when one looks more closely at the legislation and some of the reasoning in that decision we would say it actually supports us.

The Court of Appeal acknowledged that this was a difficult question and even if we were wrong about the first part of our argument it would still be an important question for this Court to consider, bearing in mind, of course, the serious consequence that here we have a judgment given effect to under our law where there are reciprocal rights in relation to it or there is reciprocity in relation to it and yet we have a decision that it cannot be the subject of enforcement here. As the Court of Appeal noticed, that may be “not preferable”, I think, was their phrase, as a matter of international law, in other words, the current international law seems to be against that idea and that was the point that was made by one of the judges in the UK Supreme Court.

So that is the first issue in the case which we say is one which ought to attract the grant of special leave. I need to deal, secondly, with the service issue that was raised by the Court of Appeal. Can I go back to the statutory materials? If the Court could go to Part III of the Immunity Act, first section 24 provides for “Service through the diplomatic channel”. It is a facultative provision and allows for service through the equivalent of the Foreign Affairs Department. So you give the originating process to the Foreign Affairs Department and they serve it on the equivalent of the Foreign Affairs Department of a foreign state. As I have stated, it is a facultative provision. Section 25 then says that:

Purported service of an initiating process upon a foreign State in Australia otherwise than as allowed or provided by section 23 or 24 is ineffective.

That section did not apply here in terms because the service took place in Nauru. Then section 27 says:

A judgment in default of appearance shall not be entered against a foreign State –

Now, an argument against us was that this was a judgment in default of appearance. That was rejected by the Court of Appeal but our opponents have signalled a notice of contention in that regard. What the Court of
Appeal did, though, having rejected the argument based on section 27 is that they held that by implication there was an obligation to serve the summons as initiating process in accordance with, in some way, before registering – proceeding to register the judgment even ex parte.

Now, the Court will know that, of course, the rules provide and acknowledge that you can serve ex parte, then you give notice of registration and then the other party can come in, the judgment debtor can come in and seek to set it aside. According to the Court of Appeal’s implication that is not sufficient.

Now, we want to say three things about that point that succeeded against us. First, if we are right on our section 9 argument, which I have outlined to the Court, we never get there because we are not involved in the exercise of proceedings relevantly, so we are not dealing with an originating process. Second, we contest the implication, with great respect, that the Court of Appeal has made. We say that the effect of the Court of Appeal has been, in effect, to rewrite the statute and to require service where the statute has deliberately stopped short of requiring it in the way the Court of Appeal has said that it should be done in every case. Thirdly, we observe this - even if the point against us were right, it would be fixable. One could simply then serve, in accordance with the way the Court of Appeal said ought to be served.

GAGELER J: Is this in your draft notice of appeal?

FRENCH CJ: I think it is 1(b), is it?

GAGELER J: Yes, I see. Thank you.

MR PARKER: That brings me to the third heading - and this raises the second special leave question which is a question of execution immunity. Again, if I could take the Court to the relevant statutory provisions, they start in section 30 in Part IV.

FRENCH CJ: Sorry, so we know where we are just direct me to the ground of appeal under which this arises?

MR PARKER: It is the grounds which are set out in paragraph 3 of the notice of appeal.

FRENCH CJ: Right, thank you.

MR PARKER: Page 188 of the book. There are a number of arguments which I will seek to just sketch for the Court but the context is this.

FRENCH CJ: This is all to go to the commercial purposes point.

MR PARKER: That is the point which ultimately we have to deal with. There are some other points associated with it but the ultimate point if I could put it that way, that has to be addressed is this. The Court of Appeal, in effect, accepted that when the Minister came to the court and said we are retailing fuel because we think that that is the right thing for the government of Nauru to be doing that that meant that it – the money that was being used for the purpose of conducting, I will call it the operation of retailing the fuel was outside the concept of commercial property.

We say that, in effect, what the Court of Appeal did was to allow considerations of government policy, that is, the policy in the particular foreign state as it then is at that point, to dictate what is commercial property and we say there has to be a more objective test than that. One needs to look to the nature of the transaction or the nature - - -

FRENCH CJ: I would be a bit concerned that this might just reduce to a contested question of characterisation rather than really raising an issue of principle.

MR PARKER: Well, it certainly gives rise to a question of characterisation.

FRENCH CJ: Yes.

MR PARKER: But it is put against us that it is in some way factual and that there is no – it is going to drag the court into having to analyse the facts or make some sort of contested factual finding. We say not. In the court below the evidence came from only one side. The evidence started off in the form of a certificate which, as the Court will have probably seen, is not conclusive under this legislation. So there was a certificate and then that was supplemented by the Minister’s evidence.

The question in every case, each of the points we want to raise, is whether that evidence or those assertions that were made satisfy the various statutory tests that are in issue here, that is, whether the property is used, is being used, whether it is being set aside and, if so, whether it is being used for a commercial purpose.

GAGELER J: When you say “assertions”, do you contest the weight accorded to the evidence or some part of it?

MR PARKER: Well, it is not so much a question of weight, I do not think, your Honour, no. It is a question of saying the Minister may well have said that or the certificate may well say that but the question is, is that what the legislature requires, is that what the Act requires? What we are saying on this aspect of the case is that there is a very important underlying question of approach to the construction of these provisions.

Are they to be construed objectively in the sense that one simply looks to the nature of the transaction or the nature of the property and how it is employed and put out of one’s mind questions of motivation or policy or is one allowed to look at what the government – what justification the government offers for doing it and whether they intend to make a profit out of it, for instance, which seems to have been the feature which the Court of Appeal latched on to. They seem to have said, well, this fuel is being retailed. In the case of the fuel accounts – this fuel is being retailed but they are not aiming to make a profit. We say why the government does something does not alter the nature of what it is doing or ought not to for the purpose of this sort of analysis.

FRENCH CJ: Just understanding how the points stand together, the primary proposition is no immunity because of the interaction of the statutes.

MR PARKER: That is right.

FRENCH CJ: The second point is, if immunity then – the immunity is defeasible in relation to the commercial funds and this is a commercial - - -

MR PARKER: Section 11.

FRENCH CJ: Section 11, yes.

MR PARKER: Then we come to service and I have dealt with that and then we come to the second part of the case. Now, there are a number of arguments, subsidiary arguments which we have outlined which all arise as a matter of construction but one comes back ultimately to the ultimate proposition that I have put. Accepting that this property is being used in the case of the fuel for the carrying on of what one might term a “fair trading operation”, does the fact that the government does not intend to make money and is doing it because it says otherwise no one else will, that is, it is doing it as a matter of government policy, does that take it outside the statutory test – or the statutory criterion?

FRENCH CJ: Sorry, can I ask just what is the relationship between ground 2 and ground 3? Are they really all wrapped up in the same argument?

MR PARKER: Ground 2, I think, is the section 11 point, your Honour. I addressed ground 1(a) and 2 first. Those are the alternatives which we put in relation to what I call proceedings immunity and now I am addressing ground 3. Can I just finish that by making this observation? We have set this out as an example. Suppose the government decided to establish a factory to make widgets for the people of Nauru because it thought that those widgets were necessary or appropriate to be provided. The government did it also, let us say, because they wanted to create employment. They did not aim to make money.

We would say that the property, that is, the machinery and the factory would still be being used for an industrial purpose and that is because it is being used for the purpose of making the widgets and the government policy or motivation in doing so and whether the government intends to make a profit or not could not affect that characterisation.

GAGELER J: When you say “industrial purpose” you mean commercial purpose?

MR PARKER: No, I am referring to the fact that “commercial property” is defined to include industrial purpose, commercial purpose and the like and we would say if what I have given as an example is correct, that by the same token if you have money that is set aside for the purpose of paying suppliers of fuel then the purpose is to pay – is to discharge the government’s commercial obligations. The wider purpose is to conduct an operation of purchasing and selling fuel, retailing fuel and that is a commercial activity and why the government is doing it and whether it is profitable cannot be determinative.

Now, as I have said, there are other issues that we have raised in our written submission of a secondary nature which also need to be looked at there but that is the ultimate point one comes to. Even if those other points failed we would still have to face up to that particular argument which I have put. It has never been considered. Questions of execution immunity have only very rarely been considered by ultimate courts overseas and it seems never by this Court.

FRENCH CJ: Thank you. Yes.

MR DICK: Your Honours, can I deal with the service point first? In our submission, the failure by the applicants to serve the summons for registration of the foreign judgment is a very strong reason for the Court not to grant special leave because the Court of Appeal, in our submission, identified clearly that Part III of the Immunities Act does require initiating process such as the summons that preceded the registration application in the Supreme Court to be served on the foreign state.

Now, their Honours identified that that was an implicit requirement in Part III but, in our submission, it is plain that where there is a part in the Immunities Act that deals, almost exclusively, with service of initiating process which, in turn, is defined to include in section 3 instruments such as a summons that what the Act is requiring is that the summons must be served.

The reasons identified by the Court of Appeal for that requirement, in our submission, are strong, namely, that this Act, the Immunities Act does restrict the immunity of foreign states and it assumes that a foreign state, such as my client, will have an opportunity to assert its immunity. That is what section 9 provides for and section 30 provides for a related immunity where what is being sought to be done is to execute against property of the foreign state, which was what the garnishee order ultimately obtained by the applicants did with respect to the Westpac accounts.

Your Honours, as again was identified by the Court of Appeal, those immunities would be very substantially eroded as they were here if the foreign state were not given notice of the application because the time at which the section 9 immunity must be asserted is on the application for registration. The applicant’s proposition really is that the Foreign Judgments Act has impliedly repealed all of these service provisions in Part III of the Immunities Act.

The way the Court of Appeal dealt with that, your Honours, was to say, firstly, it was surprising - and we agree that that would be so - but secondly, and more importantly, the judgments demonstrate how the two Acts can be accommodated. The Foreign Judgments Act says nothing about service. It does not require service and it does not prohibit it, whereas the Immunities Act requires service where the judgment debtor is a foreign State.

The Court of Appeal found there was no inconsistency. They considered the Queensland case that my friend referred to, Hunt v BP Exploration, and distinguished it because it did not deal with a foreign debtor who was a – sorry, it did not deal with a foreign debtor who was a sovereign state as is the present case. Also, there was no interplay in that case between an Act such as the Immunities Act and the relevant Queensland Reciprocal Enforcement of Judgments Act.

Now, your Honours, if that analysis be correct then the failure by the applicant to serve the originating process would result in the dismissal of its appeal in this Court even if it had success on the other two grounds that it has identified, namely, jurisdiction immunity and enforcement immunity and its riposte that it can now cure the problem simply by serving the originating process, with respect, is wrong. There is no power to retrospectively order service and the time at which the immunity was to be asserted was on the application for registration and that has now all happened. So, new proceedings would need to be commenced.

GAGELER J: In which the same issues should arise presumably.

MR DICK: Well, they may or may not, your Honour. Life has moved on and your Honours will have seen that various of the accounts are no longer sought to be the subject of the application and it would not be appropriate in our submission for the matter to stay in this Court when all of that new activity would need to take place. That same point was recognised by the Court of Appeal by the Chief Justice at paragraph 57 and by his Honour Justice Basten at paragraph 270 where each of them said that the service point was – should lead to the dismissal of the appeal. Your Honours, can I next deal with the commercial - - -

FRENCH CJ: Your proposition really is that the implication drawn by the Court of Appeal was correct and it is not a proposition that it is an unimportant implication.

MR DICK: No, we accept that it is - - -

FRENCH CJ: So, you say, really, it is a – prospects of success on the appeal ultimately are insufficient because of this, as it were, threshold point.

MR DICK: Quite, that is what we say in relation to service. In relation to the commercial property exception in section 32 which, as your Honours know, is different to the commercial transaction exception in section 11 - - -

FRENCH CJ: That goes to immunities, this goes to execution.

MR DICK: Correct, but they are both obviously immunities, the immunity in relation to execution is the immunity in section 30.

FRENCH CJ: As distinct from proceedings.

MR DICK: In our submission, your Honours, the applicant’s appeal and
appeal ground do not confront - but they need to confront - the detailed factual findings that were made by the Chief Justice in relation to the use of the funds in the bank accounts. Now, my friend says that there was not much evidence or there was just assertion in the evidence below about the use that was being made of the funds in the Westpac accounts. But, in our submission, your Honours, the evidence went much further than that.

Firstly, there was the evidence of the Consul-General in the section 41 certificate. That is the form of evidence that the Immunities Act provides for. Secondly, there was affidavit and oral evidence, including cross-examination of Mr Adeang, the Finance Minister for Nauru. All of that evidence was carefully considered by the Chief Justice in the detailed findings that were made about the actual use being made of each of the 30 bank accounts.

Now, a criticism seems to be, at least in the written submission, that the Court of Appeal should not have assessed whether the accounts were in use by reference to the past use and the intended future use of the funds, but, in our submission, and indeed in the analysis of the Chief Justice, they were the objective indicators as to whether the funds were in use and what the purpose of each such use was.

Really what seems to be asserted against us on this ground is that any account that has a credit balance should be treated as being apparently not in use because there happens to be a credit balance and if interest is being earned on that bank account then that must be a commercial purpose. With respect to that argument it does not pay heed to the substance of what section 32 requires which is to determine whether a fund, in this case, funds in a bank account, are being used for commercial purposes. The Chief Justice, if I could just take your Honours to the judgment briefly at paragraph 171 did consider that argument and said in the middle of the paragraph that that suggestion:

was implicitly if not explicitly rejected by the content of the Certificate –

It was also contrary to the evidence of the Finance Minister, Mr Adeang, and observed that to the extent that there had been any inactivity in any of the bank statements that that was insufficient to detract from that evidence. So the starting point of the analysis was to say, no, what needs to be done is a careful review of the evidence and then over many paragraphs of the judgment of the Chief Justice that is precisely what his Honour did, paragraphs 94 through to 206.

FRENCH CJ: What is the consequence for the applicant if they were to fail on ground 3?

MR DICK: If they fail on ground 3 that has at least two consequences. Firstly, they cannot enforce against any of the bank accounts but secondly, and more fundamentally, it would render inutile, we say, the balance of the appeal because what they would then have, assuming they succeed on service and the jurisdiction ground, is a judgment that after all this time they have not identified any Australian assets against which enforcement could take place. They say it is of some benefit to them to have a judgment but, in our submission, it is really hypothetical and speculative as to whether that judgment would ever be of any use to them and that would tend against a grant of special leave if they were the only grounds that the Court were to permit to go ahead. That is what we say about that, your Honour.

Can I lastly deal with the immunity from jurisdiction? On the central question of whether the proceedings for registration of the foreign judgment are a proceeding, we say that the arguments being advanced are weak. It was clearly a proceeding and, again, the best statement we thought in the Court of Appeal about that matter was Justice Basten in paragraph 244 where his Honour identified - this is at page 147 of the application book, the second-last sentence there:

The term “proceeding” when referring to steps taken in a court involves no more than the invocation and carrying through of its function in the exercise of some part of its jurisdiction -

i.e., there does not need to be another party, although there was here because we were named on the summons. That statement about a proceeding clearly covers what section 9 is directed to and it is also consistent with a case that we have not referred to in our submissions, your Honours, Cheney v Spooner, a 1929 High Court case where the Court was considering whether or not the examination summons was a proceeding. The judgments in that case effectively said what Justice Basten was saying. What is needed is simply a process whereby the court’s processes are engaged and some judicial activity is taking place. That is clearly what was going on on the application to register the foreign judgment.

GAGELER J: I think it is put, at least, this morning orally that the focus should not be on the word “proceeding” in section 9 of the Foreign States Immunities Act but on the collocation of words “the jurisdiction of the courts of Australia in a proceeding”.

MR DICK: We accept that, your Honour, but our short response to that is that however you want to classify it or characterise it what the Judicial Registrar was doing on the relevant occasion was considering evidence, the evidence that the Foreign Judgments Act requires to be considered. Is there a foreign judgment? Are the matters in section 6 and section 7 satisfied and then exercising federal jurisdiction to determine that question.

If we need to go further and go to Garuda and the concepts of jurisdiction in paragraph 17 of that judgment, we also say that that was what was happening because a new set of rights were being created. A foreign judgment was being converted into an Australian judgment and, as Chief Justice Bathurst said, obligations were being created. In particular, in this case, it led to a garnishee order over my client’s accounts. New rights were being established in Mr Parker’s client and it well and truly establishes an exercise of jurisdiction of the Garuda type. So, that is our response to that matter and, in our submission, the analysis is so clearly correct that your Honours would pause to reconsider what the Court of Appeal has done.

Then, nextly, on the section 11 question, whether the commercial transaction exception applies, in our submission one does not really need to get into any interesting questions of comparative law about what the UK or Canada or even the International Court of Justice is doing because justice

was observed in the Garuda Case with respect to the provisions being considered there.

The provisions in all those jurisdictions are different. The wording in the UK Act uses the word “relating” to; it does not use the word “concerns”. There are other differences. Similarly, in the matter referred to in the Court of Appeal judgment, the Germany v Italy Case - that was a differently worded statute.

What the Court of Appeal has done in this case is focused on the text of section 11 - textually those words “in so far as” which indicate that sometimes there may be a commercial transaction to which the exception applies and sometimes there may not and then other sections of the Act such as the arbitration provision in section 17 which their Honours – which the Chief Justice, in particular, identified would not be necessary if the wider view which our friends advocate if the commercial transaction exception were a right.

So, in our submission, your Honours, even on the commercial transaction exception the analysis, the textual analysis which the Court of Appeal engaged in, was compelling and it would not be a matter that this Court should now need to consider. Those are our submissions, your Honour.

FRENCH CJ: Thank you, Mr Dick. Yes, Mr Parker.

MR PARKER: The question of service – it should not be forgotten that there has been an opportunity - the Republic has had the opportunity to contest and has successfully contested jurisdiction. The implication in the Court of Appeal, the significance of the implication in the Court of Appeal was that on the Court of Appeal’s implication the proceedings would not even have been commenced or the order could not even be made without first being served.

So, the Court of Appeal’s implication goes far beyond an implication simply requiring a party to be made aware of the procedure against it. That was done in accordance with the way the rules provide for it under the Foreign Judgments Act. There is no implied repeal point under this head. We would make the three points we have made, which I have referred to including, of course, that the implication goes too far in the circumstances.

Now, in terms of the property issues, can I just refer the Court as an example of the way the issue will arise, or may arise, in the Chief Justice’s judgment page 124 of the application book. His Honour sets out at paragraph 184 on page 124 the facts he finds about the account. This is the account used to support the leasing of the aircraft. It says they operate:

an airline which is funded, at least in part, through these accounts. The reason for the operation of the airline according to Mr Adeang –

the Minister –

is that private airlines do not provide services to Nauru.

Now, evidence showed that it was a commercial airline in the sense that it had fare-paying passengers and was also – the planes were used for freight but what his Honour says there about what Mr Adeang said is quite right. The conclusion then immediately follows in paragraph 185.

GAGELER J: Is there any finding of fact – any finding of primary fact made by the Chief Justice which you contest?

MR PARKER: We would say not. We accept what he says there in paragraph 184. We just say that it does not lead to the conclusion which he then states in paragraph 185 because he ought to have adopted a different approach from the one he evidently did to the way in which the question of commercial property should be characterised under the Act. Now, time does not permit me to deal with the other subordinate arguments but that, as I have indicated is one that will, on any view, need to be dealt with. As far as the other issues are concerned, the first topic that I addressed I consider they have been fully canvassed.

FRENCH CJ: Can I just ask - do you accept what Mr Dick said about the effect if you were to fail on ground 3?

MR PARKER: Well, I think as a common ground that we would then be left with a judgment. He says we have not sought to identify other property yet. We say, having a judgment in this country, particularly when one sees the proximity and the fact that there are close economic connections between this country and Nauru, having a judgment here which would allow us to attach commercial property in this country in the future would be a valuable thing to have and, therefore, the issue is not a moot issue at all. It is an important legal issue but more than that it has an important practical consequence even if we were not permitted to agitate the arguments about these particular accounts.

FRENCH CJ: Thank you. The Court will adjourn briefly to consider what course it should take.

AT 11.43 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.45 AM:

FRENCH CJ: There will be a grant of special leave in this matter. We anticipate the matter will be set down for the April sittings of the Court. There is a timetable of submissions available to you. Thank you.

AT 11.46 AM THE MATTER WAS CONCLUDED