Plaintiff 195/2016 v Minister for Border Protection & Ors [2017] HCATrans 99 (9 May 2017)

Last Updated: 9 May 2017

[2017] HCATrans 099

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S195 of 2016

B e t w e e n -

PLAINTIFF S195/2016

Plaintiff

and

MINISTER FOR IMMIGRATION AND BORDER PROTECTION (CTH)

First Defendant

COMMONWEALTH OF AUSTRALIA

Second Defendant

BROADSPECTRUM (AUSTRALIA) PTY LTD

Third Defendant

KIEFEL CJ
BELL J
GAGELER J
KEANE J
NETTLE J
GORDON J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 9 MAY 2017, AT 10.14 AM

Copyright in the High Court of Australia

____________________

MR T. MOLOMBY, SC: If it please the Court, I appear for the plaintiff and MR J. WILLIAMS appears with me. (instructed by O’Brien Solicitors)

MR S.P. DONAGHUE, QC, Solicitor-General of the Commonwealth of Australia: If it please the Court, I appear with my learned friends, MR G.R. KENNETT, SC, MS A.M. MITCHELMORE and MR P.D. HERZFELD, for the first and second defendants. (instructed by Australian Government Solicitor)

MR S.B. LLOYD, SC: May it please the Court, I appear with MS H. YOUNAN for Broadspectrum Australia Pty Ltd. (instructed by Corrs Chambers Westgarth)

KIEFEL CJ: Yes, Mr Molomby. Mr Molomby, before you commence, as the Commonwealth points out in its written submissions, the plaintiff has somewhat strayed from the questions posed by the special case. The Court will expect the plaintiff in oral argument to keep within the questions posed.

MR MOLOMBY: If it please the Court. Perhaps I might ask for further clarification, your Honour. It appears there has been some misunderstanding and, might I say, if there is - - -

KIEFEL CJ: Well, I think, in summary, raising the question of whether Al-Kateb should or could be opened and the question of a large number of the remedies that are sought, I think those areas stray beyond the questions in the special case.

MR MOLOMBY: If it please the Court. I think that is what has been called in the submissions the “relief sought”, other than by answers to the questions.

KIEFEL CJ: That is right.

MR MOLOMBY: Yes. If it please the Court, I will proceed accordingly.

KIEFEL CJ: Thank you, Mr Molomby.

MR MOLOMBY: I do apologise, both to the Court and to the parties for any deviation of effort that might have been caused by any misunderstanding.

KIEFEL CJ: Thank you.

MR MOLOMBY: If it please the Court, this case has as its commencement – its origin - the judgment of the Supreme Court of Papua New Guinea in Namah and might I take the Court to that in relation to some aspects of that judgment? It is in the second volume of the two special case books and the supplementary book on which, if I omitted to say, I move formally for the purpose of this hearing.

Might I take the Court, please, to the beginning of the Namah judgment? It begins fully on page 834 of the second book – the text of the actual judgment begins on 837 and it is to that I am going for the moment. I do this, your Honours, in search for precision as to what was meant by the word “arrangements” in paragraph 39, which I will come to in sequence, where the court makes some findings about illegality and unconstitutionality. That word is used throughout the judgment otherwise than in that paragraph 39 and it is our case that it has the same effect there – only to describe what is identified first here in paragraph 5 of the judgment. At line 13 of page 837, the court says – I read into it a bit – it refers to asylum seekers:

transferred and held against their will on Papua New Guinea’s Manus Island Processing Centre . . . This was under an arrangement between the Australian and Papua New Guinean (PNG) governments in the form of Memorandum of Understandings (MOU) signed on 08th September 2012 (1st MOU) and a new one signed on 05th and 06th August 2013 (2nd MOU). Later the two governments sought to validate the arrangements by an amendment to s.42 of the PNG Constitution –

That is the first place in which the word “arrangement” or “arrangements”, the court used them both there apparently indistinguishably to describe the two memoranda of understanding. The word next occurs in paragraph 20 on page 842 where at line 45, reading in:

A number of people in PNG and more so the Applicant in this case, took serious issue with the two governments arrangements –

Those arrangements are plainly the “two MOUs referred to above” referred to just before that in line 42:

the PNG government entered into the two MOUs referred to above –

That reference is the first paragraph – paragraph 5 that I have already taken the Court to:

under which the asylum seekers who were seeking asylum in Australia were forcefully brought into PNG. A number of people in PNG . . . took serious issue with the two governments arrangements –

So they plainly are the two MOUs as well. Then over the page, page 843, paragraph 21, in the opening line:

For the purpose of the arrangement between the two governments –

which again in context is plainly a reference again to the two MOUs, and in the first line of the following paragraph 22, line 15 of the page:

In a bid to overcome the challenges or issues raised in opposition to the arrangements, the PNG government –

sought to make a constitutional amendment. Those are all preliminary to the key reference in paragraph 39, which begins on page 848. Those are the only occasions on which in the judgment up to this point the word “arrangement” or “arrangements” is used. I will read a bit more of paragraph 39:

In the present case, the undisputed facts clearly reveal that the asylum seekers had no intention of entering and remaining in PNG. Their destination was and continues to be Australia. They did not enter PNG and did not remain in PNG on their own accord. This is confirmed by the very fact of their forceful transfer and continued detention on MIPC by the PNG and Australian Governments. It was the joint efforts of the Australian and PNG governments that has seen the asylum seekers brought into PNG and kept at the MIPC against their will. This arrangements were outside the Constitutional and legal framework in PNG. The governments of PNG and Australia therefore took steps to regularise the forceful transfer and detention of the asylum seekers.

This is picking up the previous references to the memoranda of understanding and, indeed, the attempt to solve a perceived problem by constitutional amendments. There is only one other reference beyond this and I will be coming back to paragraph 39 because it has some other key findings in it. But to conclude the references to the word “arrangement” in paragraph 59, on page 855, at line 41, I will read from the start:

The only reason why the asylum seekers are detained at the MIPC is for the purposes of processing their asylum claims. There is no specific provision in the Migration Act covering this situation. However, the Minister has used s.15C of the Act to issue the following direction on 5th September 2012 in an attempt to make the arrangement legal -

The direction then reproduced refers to the first memorandum of understanding, at line 50. Then in the following paragraph, 60, the above direction was revoked at line 10 – I am sorry, was revoked and reissued following the second MOU in the same terms and that is a direction referring to the second MOU, both being attempts to make the arrangement legal.

Now, it is one of our prime submissions that the word “arrangements” in paragraph 39 has the same meaning as in all those other contexts, necessarily, in all those other paragraphs, they being the only ones in the judgment in which that word is used. Might I come back to paragraph 39, on page 848? I am sorry, going to the part on 849 – from the top of 849:

It was the joint efforts of the Australian and PNG governments that has seen the asylum seekers brought into PNG and kept at the MIPC against their will. This arrangements were outside the Constitutional and legal framework in PNG.

That, we say, is saying the MOUs by which this occurred were outside the constitutional and legal framework. There is then the reference to attempting to regularise the situation and at the end of the paragraph, the last two sentences:

That means, no situation has arisen for the purposes of s. 13 of the Act or s. 42(1)(g) of the Constitution to warrant, the asylum seekers’ detention. Naturally, it follows that, the forceful bringing into and detention of the asylum seekers on MIPC is unconstitutional and is therefore illegal.

Those findings in that paragraph are key to the case presented here on behalf of the plaintiff and the force of them, we say, is that under the law of Papua New Guinea the Supreme Court was saying that the detention of the asylum seekers on Papua New Guinea was contrary to the constitution of the country and, therefore, illegal and that the agreements by which that occurred, being the memoranda of understanding, were themselves unconstitutional and illegal. If that is accepted, it is then the foundation for further steps in our argument.

Might I just pick up one other aspect of the wording of this section? The Supreme Court referred both to the bringing into Papua New Guinea and the detention of the asylum seekers. In our submission, it is clear that the objection the court saw to the bringing in was the same as it saw to the detention, that is, that it involved detention. That is made clear by the use of the word “forceful” in line 50 on page 848:

They did not enter PNG and do not remain in PNG on their own accord. This is confirmed by the very fact of their forceful transfer and continued detention on MIPC –

The word “forceful” is again used in the last sentence of the paragraph:

it follows that, the forceful bringing into and detention of the asylum seekers –

In our submission, it is clear that the “bringing into” was vitiated by the fact that it was exercised by force – that is, a deprivation of liberty being equally a breach of the Constitution as the more long-term detention after they had arrived.

KIEFEL CJ: But the holding by the Supreme Court of Papua New Guinea that the detention of these persons was unlawful does not itself answer the questions of law posed in the special case, namely whether or not the Commonwealth had authority to undertake the regional processing arrangements and enter into the various understandings and arrangements? That necessarily must have as its starting point the provisions of the Migration Act read in light of the Australian Constitution, must it not?

MR MOLOMBY: Yes, your Honour, and might I say we are taking it as the starting point of this case and I think this is taken account of in the way the questions have been formulated, or at least the rider at the end has been formulated.

KIEFEL CJ: Certainly.

MR MOLOMBY: We are approaching this on the basis that the law is otherwise valid and we do not see ourselves as entitled to challenge it in any way except by reason of any consequence of the Namah decision.

KIEFEL CJ: But how can what the court has said in the Namah decision bear upon the law as it applies in the Migration Act and the question whether or not the arrangements entered into by the Commonwealth are within or without Australian law?

MR MOLOMBY: We tie that, your Honour, to the purpose for which the powers were exercised and we say that if the purpose includes an illegality, here being conduct which was found to be illegal – that is, the detention, if there is a purpose of that sort, that makes the exercise not only of these powers – we do not for the purpose of this case need to go anywhere else – but any other powers under the Constitution – well, that prevents the power being granted. We say there is necessarily an implication in the Constitution that the powers are granted for legal purposes.

KIEFEL CJ: How does the question of purpose in this context arise under the relevant provisions of the Migration Act? From the Minister’s perspective, how does it come to be that the Minister’s mind is turned to the question of illegality of purpose when considering the matters necessary to take into account under the Migration Act?

MR MOLOMBY: Your Honour is speaking of the designation decision there - - -

KIEFEL CJ: Yes.

MR MOLOMBY: - - - or the – because there are - - -

KIEFEL CJ: Well, both, and the arrangements.

MR MOLOMBY: Well, the arrangements, your Honour, have terms in them. Perhaps that is the easier one to deal with, at least in brief. The arrangements have terms in them that we say require detention. In other words, the arrangement was an agreement, among other things, among many other things, but one of its objectives was to achieve detention.

Now, in our written submissions we have put a number of extracts from the arrangements in support of that. A key one is the agreement that the relevant Minister in Papua New Guinea would direct the transferees to reside in the centre, that being under the Papua New Guinea law something – that is, the residence being enforceable by action of various officers including police authorised to use force to make the person stay in the centre and subject to criminal penalty of up to six months imprisonment if the person did not do so.

Now, we say, that being part of the agreement, in making an agreement, the purpose necessarily includes all of the things which are part of the agreement. Part of the purpose was, we say, this provision to require detention. I have mentioned one - there are other aspects too, but that is the scope of the argument, your Honour, if that is what you are seeking at this point.

KIEFEL CJ: What about the provision in the memorandum of understanding in clause 4 that all activities would be conducted in accordance with the PNG Constitution and all relevant domestic laws?

MR MOLOMBY: Yes, and there are similar provisions in some of the other documents too, your Honour. That is so, they are there. That is obviously a part of the document but it cannot stand in the path of whatever the reality turned out to be. If someone makes an agreement which has something as its clear objective, that stays the objective whatever they say about their intentions.

KIEFEL CJ: But the starting point is whether or not the Commonwealth has a particular power to enter into such arrangements.

MR MOLOMBY: Right.

KIEFEL CJ: What you are saying really suggests that there is some statutory condition or preclusion in relation to making such arrangements, by which the arrangements have to accord with valid laws, with the laws of another State.

MR MOLOMBY: That is so, your Honour. That is what we say.

KIEFEL CJ: How do you work that into the provisions of the Migration Act?

MR MOLOMBY: We do not say it is any one of the provisions of the Migration Act; we say it is a necessary implication of the Constitution that the powers are to be exercised for legal purposes. Therefore, if there is an illegal purpose at play in the agreement, the agreement is disqualified from being under a head of power.

KIEFEL CJ: Well, that is to say that it must be a statutory requirement in the Migration Act that any agreement be valid according to the laws of Papua New Guinea.

MR MOLOMBY: No, we do not say that at all, your Honour.

KIEFEL CJ: But is that not the effect of what you are saying?

MR MOLOMBY: It could be achieved that way. That would be one way of achieving it in the context of this particular legislation, but that is not the way we say it works. I am sorry - I think I said earlier dealing with the Migration Act here but the proposition we put on this point would apply to any legislation.

GORDON J: Can I just question - your proposition, as I understand, is implication in the Constitution that it must be exercised for legal purposes is what you said.

MR MOLOMBY: I did say that, your Honour.

GORDON J: Whose purposes? Do you mean Australia’s legal purposes?

MR MOLOMBY: Yes, I did mean that your Honour, I am sorry. Of course I meant that, yes.

GORDON J: So how is it that the Papua New Guinea law suddenly impacts upon either the exercise of the power or the implication that you seek to contend for?

MR MOLOMBY: I am sorry, your Honour, I do not quite grasp that. Would you - - -

GORDON J: As I understand it, you now accept that the implication that you say arises is the exercise, for legal purposes, being Australia’s legal purposes. One does not look at it by reference to Papua New Guinea law.

MR MOLOMBY: I am sorry, I might have misunderstood your Honour’s question and given too quick an answer. I did not mean to say “legal according to Australian law”, if that is the sense of your Honour’s question and my first answer.

GORDON J: Right.

MR MOLOMBY: I meant Australia’s purposes rather than somebody else’s purposes. I perhaps took the wrong emphasis from your Honour’s question.

GORDON J: Maybe I am at a loss then. So what is the implication you say arises? It is not that it should be exercised for legal purposes.

MR MOLOMBY: It should be exercised for purposes which accord with the law of wherever it is to be exercised. That might be in Australia. The same issue, of course, cannot arise in Australia because the Executive cannot authorise a breach of the law. The legislature makes the law, and the only way the legislature can depart from the law is by enacting something which breaches the Constitution, which creates an issue for this Court.

GAGELER J: Mr Molomby, is there somewhere in your written submissions where you crystallise this implication? Have you spelt it out somewhere?

MR MOLOMBY: In the primary submissions, your Honour.

GAGELER J: No, I am just asking for a clear statement of what the implication is. Do I understand it to be an implication that limits executive power or an implication that limits legislative power?

MR MOLOMBY: All power under the Constitution, your Honour; that is, both.

GAGELER J: Exactly what is the implication?

MR MOLOMBY: That the power is to be used for a legal purpose, meaning a purpose legal where it is exercised, where it has effect.

GAGELER J: Does this underpin - - -

MR MOLOMBY: With the effect that, if this assists to make it clear, for Australia to take part in – I use that as a fairly general word which would include “assist” or “be the primary actor in” – a foreign country activity which is illegal according to the law of that country, that triggers what I am talking about. That is exactly what falls within it. It is implied, we say necessarily, in the Constitution, for some fundamental reasons of principle I could go to, that the Constitution does not allow activity of that sort.

GAGELER J: Now, if that proposition were to be rejected, is there anything left of your case?

MR MOLOMBY: Yes, there is, but not nearly as extensive and that is the effect on section 198AHA, which requires to be triggered in subsection (1) an arrangement to exist with – I think the Act says “personal body”, but that has been found to include another nation. There needs to be an agreement for that section to come into play. We say that the effect of the Namah decision is necessarily to invalidate the several agreements that there were, with the effect that there is no appropriate agreement to trigger the entitlement to rely upon section 198AHA. The effect of that is a narrower impact on the activity that has occurred, but that is a separate way in which we put the case.

BELL J: As for your first point, this is the matter that I think Justice Murphy alone raised in Hayden 156 CLR at 562 without deciding that is the power of the Commonwealth legislature to enact a law authorising the commission of an act in a foreign country contrary to the law of that foreign country.

MR MOLOMBY: That is correct. He made a passing reference to it; that is right.

BELL J: No - - -

MR MOLOMBY: It is not a decision or even an expression of an attitude on the question.

BELL J: Yes.

MR MOLOMBY: Might I perhaps – it is the appropriate time –say something short about that implication which we necessarily say is in the Constitution, which I can say fairly shortly, and the serious considerations that actually support its existence. This is an issue that does not depend on a fine analysis. It is a question of fundamental values and assumptions behind our legal system. In the true sense, it is a radical question – that is, it goes to the root of the situation. There is not a lot to say about it, but what there is of some weight.

The Australian Constitution establishes a nation – a democratic nation – under a rule of law, not just on its own but in a community of other nations, a nation which is meant to proceed co-operatively and peacefully, one would assume, with those other nations.

In considering this sort of question, in my submission it is perhaps appropriate to bear in mind what Oliver Wendell Holmes Jnr once said in a well-known dictum, “The life of the law has not been logic; it has been experience”. Might I briefly refer to some things about experience which can be taken as conditioning factors on very fundamental principles and assumptions? We live in a rather unstable and unpredictable world where there is suspicion and distrust and shifting alliances between nations. If an Australian Prime Minister, of whatever day – I do not identify anyone – announced that there were to be a referendum next month on whether to include in the Australian Constitution - - -

KIEFEL CJ: Mr Molomby, I think we are straying a little from the questions that are necessary to be addressed here - - -

MR MOLOMBY: May it please the Court.

KIEFEL CJ: - - - which are about limitations which you say are derived from the Constitution on the exercise of executive power, the exercise of statutory power under the Migration Act.

MR MOLOMBY: Yes, with an eye, your Honour, I was hoping to say, to the implications of one way of looking at it or the other. Perhaps I could move to another step and ask your Honour to say if that is in accordance with what you have just said.

GAGELER J: Your proposition does not rely on international law, as I understand it.

MR MOLOMBY: No.

GAGELER J: You are not saying that the constitutional powers are limited by international law.

MR MOLOMBY: I am not saying that in those terms, your Honour, no.

GAGELER J: It is something else. It is a geographic limitation, is it?

MR MOLOMBY: No, I am saying it is a necessary limitation for reasons that have international implications because after all we are talking about the exercise of a power internationally – that is, in the first step of what I am putting what I am talking about, the exercise of power by Australia in a foreign nation in breach of the law of that nation, that there is a necessary international dimension to the topic.

GORDON J: One of the issues, though, is it not, as I understand the way you put the implication, it would vary about whether or not there had been a breach from moment to moment depending upon the views of the international country with which you are dealing? So one moment it could be a valid exercise of the power; the next minute it is not. What does Australia have to do? Monitor the laws of every other country in the world with which it has dealings?

MR MOLOMBY: That is a practical consideration, your Honour, which, to an extent, applies even domestically. When a scheme of laws is enacted, a lot of activity can take place following it. There have been many examples of decisions of this Court over the years which have engaged situations like this where people have proceeded on one pattern of expectations and then it has been found that the legislation was in breach of section 92 or Chapter III and a whole lot of history has elapsed and often remedial legislation has been very quickly passed by, say, the States – if it has been a State federal allocation of power issue to patch up behind. It is really – what your Honour raises with me, with respect, is, yes, it is a difficulty, yes, it is a difficulty that existed domestically as well and, yes, it is there.

Your Honour the Chief Justice, if I might come back to – I was trying to get on to something else perhaps in the same general area but not transgressing the limitation that you were indicating – if I may? In our submission, it is somewhat internally contradictory to regard the Australian Constitution as establishing a rule of law for our nation, yet capable of giving power to committing acts in other countries which are contrary to the law of that nation.

In the current case, in the current circumstances the position of the defendants is, necessarily, that Australia has power to do in Papua New Guinea what Papua New Guinea itself does not have power to do. That is a very paradoxical position. In our submission, the integrity of other sovereign states is threatened by such a power. Its exercise would be the very reversal of the restraint which courts normally show to other – well, the respect that is accorded to other states in sovereign state immunity, for example.

Applying the doctrine of sovereign state immunity, one cannot without agreement subject a sovereign other state to the fair and just processes of Australian law, but at the same time it is a very contradictory undermining of that very respect to allow a power which can in the territory of that other country nevertheless breach its laws. We say there is an inherent contradiction in the Constitution being true to its purpose establishing Australia as an independent nation in a community of independent nations if there is such a power.

KIEFEL CJ: To this point, I think, Mr Molomby, you have been focusing upon the regional processing arrangements which it was said in the Namah decision were made with Papua New Guinea.

MR MOLOMBY: Yes.

KIEFEL CJ: How does the decision in Namah affect the designation by the Minister of Papua New Guinea as a regional processing country?

MR MOLOMBY: Only if the Court accepts the proposition I have just made, your Honour, because in the documents tabled by the Minister laid before the Parliament there is a fairly clear reference – I think we have identified it in the submissions, I could go to it if necessary – to the transferees being detained in the centre – that is, there is a reference to detention as being part of the purpose.

But that all hooks in to the argument I have just outlined. That is the only basis on which we seek to challenge the designation decision. The other decisions are different because other agreements had been made with much more particularity at the time of them and we say those agreements – I am sorry, let me go back if I might.

The designation decision was, could I call it unilateral? It was made by the Minister alone with no other party to it. It was not, like the arrangements, something had happened between Australia and Papua New Guinea. We say all of the arrangements being between those two parties fall because of the necessary – well, because of the finding of the Papua New Guinea Supreme Court that those arrangements – and that is the reason I examined the use of that word that started these submissions – the Papua New Guinea Supreme Court found that those arrangements were unconstitutional and illegal.

We say that necessarily means they are void, therefore, from the Australian end, quite apart from any question of power, there were no arrangements. They were held to be void, invalid, at the other end. In the absence of the arrangements there is no triggering arrangement for section 198AHA, which goes back to Justice Gageler’s question to me earlier about that narrower basis I identified.

GAGELER J: Yes. For your wider basis, I understand why you attempt to articulate it at a level of principle. Is there any authority referred to in your submissions that we should take into account in evaluating the argument?

MR MOLOMBY: I am sorry, as to which aspect of the argument does your Honour ask that?

GAGELER J: The first one. You put the argument on two bases.

MR MOLOMBY: Yes, the broad principle.

GAGELER J: The broad principle and then no arrangement.

MR MOLOMBY: Yes.

GAGELER J: In relation to broad principle you have articulated it and you have sought to justify it at the level of principle. I am just asking is there any authority that we should take into account in attempting to evaluate it. Is there any authority that you can point to that gets anywhere near justifying it?

MR MOLOMBY: I have not been able to find, your Honour, authority for or against it. Plainly one factor conditioning that is that this sort of circumstance would occur pretty rarely and get to be litigated even more rarely, but I am not able to assist the Court with authorities either way. I think Broadspectrum, in its submissions, identified an authority which we say is actually about something else, but about the necessity – it is Horta v Commonwealth – of a treaty to comply with international law.

We say that is quite a different thing from the principles that would apply in taking part in activity in foreign territory, with or without the knowledge, of course, of the government of the foreign territory, and it could be surreptitious, but quite a different thing in principle from Horta. There is some legitimate use that Horta can be put to in the argument but that is as close a case as I know of that comes to it, if it please the Court on that.

GAGELER J: Yes, thank you.

MR MOLOMBY: Might I just have a moment, your Honours?

KIEFEL CJ: Yes, Mr Molomby.

MR MOLOMBY: I do not know if this is of assistance in relation to Justice Gageler’s question. I think I might have avoided giving you a direct answer on how we had articulated that proposition you were asking me about.

GAGELER J: Yes.

MR MOLOMBY: Just the references to it in our submissions - I am sorry, your Honours, I do not know that I have the right reference for the moment.

GORDON J: At a very broad, general level it might be paragraph 12, I think, where you say you have three fundamental arguments. Is that the first argument? Is that the one that you rely upon? Is that something different?

MR MOLOMBY: Your Honour, it is not spelled out – I think that principle I am arguing for is behind that but it is not actually spelled out at that point. I am sorry, I will find it in a moment.

GAGELER J: I was not really just asking to see it in writing. I was asking to see it stated most clearly and I think you have done that orally. So, I am assisted on that, thank you.

MR MOLOMBY: Thank you, your Honour. I just did not want to leave – if there was something I had said I would do – leave it out.

KIEFEL CJ: So, where are we now in the outline of your argument?

MR MOLOMBY: We have gone in a slightly different order which I am not complaining of at all, your Honour.

KIEFEL CJ: Yes, yes. What is your next point?

MR MOLOMBY: I have, in fact, sketched out - - -

KIEFEL CJ: The shape of the argument.

MR MOLOMBY: - - - the shape of our argument overall.

KIEFEL CJ: Yes.

MR MOLOMBY: It has those two separate bases, that is, the broad principle proposition and the proposition that arises from the agreements being declared void and the follow through of that to their being no triggering agreement to allow the reliance upon section 198 AHA.

KIEFEL CJ: Where are we heading now then, Mr Molomby?

MR MOLOMBY: Your Honour, I am sorry – if I just might now have a second because of having adjusted things in the light of confining it to the questions.

KIEFEL CJ: Yes.

MR MOLOMBY: Your Honour, that is the conclusion of the topics on which I think I am entitled to address, on those questions.

KIEFEL CJ: Do you wish to address directly the questions of law and propose an answer to them – that are stated in the special case?

MR MOLOMBY: Thank you, your Honour.

KIEFEL CJ: Or, we can take it inferentially, if you would prefer.

MR MOLOMBY: Your Honour, I will, just for the record, state those because – thank you, your Honour, I did realise that that was not recorded in writing and certainly should be recorded. We say that the answer that should be given to the first question is yes. We say the answer that should be given to the second sequence of four questions within 1 is yes to each of them. We say the answer to question 3 is yes, 4 is yes, 5 is yes and 6 is yes. The answer to question 7, we do not dispute, follows the result of the case.

KIEFEL CJ: Quite.

MR MOLOMBY: May it please the Court.

KIEFEL CJ: Thank you, Mr Molomby. Mr Solicitor.

MR DONAGHUE: Your Honours, I hope, have our outline of oral argument. I will be addressing topics 1 to 5 in that outline and Mr Kennett will be addressing topics 6 and 7, which are the issues relating specifically to section 198AHA of the Act.

The first of the matters identified in the oral outline concerns the scope of the matters that are actually before the Court for decision. My learned friend clarified this morning, in response to questions from your Honour the Chief Justice, that two of the matters about which the Commonwealth had taken issue are not pressed, being the relief question and the Al-Kateb question. So they are the first two points identified at 1.1 and 1.2.

But there do remain submissions that are made by our friends that, in our submission, go beyond the scope of the matters properly raised before the Court and they are the matters flagged at 1.3 and 1.4 in the outline, which I will just develop very briefly. Paragraph 1.3 relates to Australia’s role in relation to the Manus Island Regional Processing Centre, specifically the question of whether or not Australia is responsible for the detention of the residents at that centre. In relation to that topic we make the following points.

First, one finds nowhere in the Namah decision any finding by the Supreme court of Papua New Guinea in relation to who was responsible for running the RPC there or the specifics of the Commonwealth’s functions there. So when one looks at the questions that ask does illegality arise by reason of the Namah decision, the Namah decision just does not go to that topic and so that whole issue, we submit, is outside the questions as formulated in the special case.

Furthermore, the set of factual issues that go to the question of control of the centre are the very kinds of factual questions that bear on relief that caused the relief issues to be hived off in the first place. So were those matters properly to be before the Court the special case would look different than the special case does look because it would have been necessary to traverse all of those questions. Your Honours will recall that this was an issue that attracted lively debate in M68 in the equivalent context of Nauru.

The final point that I would make is that, even if your Honours were minded to look at the question, the submissions that our friends make, particularly in paragraphs 18 and 19 of their primary written submissions, are contrary to the facts that are recorded in the special case. So our friends put in the closing part of paragraph 18 and in the opening part of paragraph 19 that Australia’s:

activities constitute the major part of the RPC’s operation. They were undertaken by Australia alone, with no participation by PNG. Australia would have been doing very little more if it had been conducting alone a centre in Australia.

The RPC is in effect an Australian operation conducted in the territory of PNG.

The facts just go nowhere near establishing those propositions. Without taking them to you, I mention paragraphs 27 and 29 of the special case and particularly paragraph 43. Paragraph 43 is the fact that, if PNG had not sought to impose a restriction on the plaintiff’s liberty, none of the Commonwealth Minister or Broadspectrum would have sought to impose such a restriction.

That fact had an equivalent in 68 in relation to Nauru and it was an equivalent upon which a majority of this Court relied in concluding that the detention in Nauru was detention by the sovereign State of Nauru. We submit, on that basis alone, that your Honours should not proceed upon the factual basis that our friends invite.

The other matter, which is 1.4 of the written outline, really goes to a topic that my friend has developed in oral argument this morning. It might be best identified if your Honours take up my friend’s reply, the plaintiff’s reply, and go to paragraph 15 of the reply, although one finds the same or a similar argument in 44 to 46 of the primary submissions. Focusing on paragraph 15 of the reply, your Honours will see it is put there that:

The plaintiff’s case in relation to the designation decision is not about the construction of Section 198AB –

upon which we have focused:

It is based on a supervening proposition, that the constitution does not empower a decision, though otherwise validly made, if it is made with the intention of assisting, achieving or taking part in activity in a foreign country that is illegal -

That seems to be the articulation in writing that your Honour Justice Gageler was seeking, upon which our friends rely. The difficulty with it is that it is, as we read it, a constitutional submission to the effect that, irrespective of its construction, 198AB cannot validly operate to have the effect. There are two issues with that: one, there is no challenge to the validity of 198AB in the amended application that underpins the special case and consequently there is no 78B notice in relation to that issue because the 78B notice just says we raise the issues that are raised in the amended application.

So if our friends want to attack the validity of that section, they needed to plead the attack and they should have given proper notice in relation to it. Instead, the way they have cast their case is an attack on a series of administrative decisions without seeking to impugn the validity of the overarching statute.

So there is a not inconsiderable technical problem in that the point is not pleaded and notice had not been given. If leave were to be sought, there is the further problem that the argument is, in our submission, untenable and that your Honours for that reason should not give leave to be advanced in any event. It is untenable because – for a number of reasons. One, the suggested limit is of a very diffuse kind and would suggest that Commonwealth legislative and executive power fluctuate depending upon decisions made in all other countries to which those exercises of power might relate.

Two, there is no authority that would suggest that that is a remotely acceptable proposition. Three, your Honours held in M68 that section 198AHA was valid, supported by at least the aliens power and some of your Honours by the external affairs power in a context where one of the issues that the plaintiff sought to put in play was the proposition that what was happening was unlawful under the Constitution of Nauru and the court found it unnecessary to decide that question.

If the conclusion that the aliens power or the external affairs power depends upon the legality of the action taken in Nauru was correct, the court could not logically have proceeded on that footing because there was a question in the special case there specifically raising the legality of these actions under the Nauruan Constitution. So M68 rather points against our friends’ view.

In the context of the external affairs power, as has been mentioned, this Court in Horta held that there is not any limitation on the exercise of that power that legislation must be consistent with international law. We submit that that proposition should stand as a matter of principle even more strongly in connection with the domestic law of any other State.

It has a practical manifestation in a section of the Intelligence Services Act that we have included in our bundle of material, section 14, where the Commonwealth Parliament has expressly legislated on the footing that it can immunise Australian officers from the consequences of activities that are unlawful under the laws of another country which is, in our submission, not a surprising thing for the Commonwealth to have done in relation to intelligence activities that might be undertaken overseas.

So, at a very practical level, it would be a surprising proposition if it was beyond the legislative power of the Commonwealth Parliament to, in Australia’s national interests, decide to legislate in a way that authorised conduct that was contrary to foreign law.

Your Honours, can I turn from there to point 2 in the outline which relates to the Namah decision. In a very real sense, the submissions I am about to make are ultimately irrelevant because our submission is that the scope of the relevant Australian statutory powers in play in this case does not depend on anything said by the Supreme Court of Papua New Guinea. But because of the way the plaintiff has framed the case, the questions are all directed to whether particular consequences follow by reason of the Namah decision. It is, in our submission, important to identify what was actually decided in that case.

Can I structure their submissions by looking, first, at what the plaintiff says Namah decided; second, at the factual basis of that case; third, at what was decided; and, fourth, at what was not decided. In relation to the first of those points, if your Honours could go to volume 1 of the special case book, to the plaintiff’s amended application, which starts at page A2, at the commencement of the book, and turn to page A4, you will see in paragraph 8, under the heading “Ground 1: Contrary to Law” it is pleaded that:

The decisions by the PNG government to enter into agreements with the Commonwealth defendants, as particularized at ground one [13](a)-(h), were declared illegal and unconstitutional by the Supreme Court of PNG -

So the proposition is that Namah actually declared all of what are called agreements listed in 13(a) -(h) illegal and unconstitutional. When one then goes over the page, A6, to paragraph 13, 13a), b) and c) are fairly characterised as agreements, although, for reasons I will come to, none of them were declared to be illegal or unconstitutional in Namah, but d) to h) plainly are not agreements between PNG and Australia. They are exercises of administrative power by the Commonwealth Government under a Commonwealth Act, and Namah says nothing whatsoever about that, that being a proposition I will shortly develop.

If your Honours could then go to the Namah case, which is at volume 2 at 834 of the special case book - I am here briefly identifying the factual basis upon which the court proceeded in the case. If your Honours turn to paragraph 16 on page 8 of the judgment you will see that what had happened was that the court made orders somewhat akin to our special case procedure attempting to have the parties agree the relevant facts. About four lines down, in paragraph 16, it is recorded:

The Applicant came up with a draft statement of the agreed facts, which the Respondents failed to discussed and settle –

and that it failed to provide a reasonable explanation for that failure. At the end of 16:

the Respondents sought to raise objections -

which should have been raised at an earlier stage at the final hearing stage. So one then sees in paragraph 18:

The Respondents did not offer any justifiable reason to effectively, have the hearing of the substantive application vacated to allow for a trial -

all of which had the consequence you see recorded at the top of paragraph 20:

As a consequence of the above ruling, the relevant facts in this case became uncontested.

So, in effect, there was a draft set of facts provided by the applicant, default by the respondents and the court then said we will proceed to decide the case on the basis of the facts as advanced by the applicant. That statement of agreed facts document is a document that the Commonwealth does not have and has not seen. So we do not know precisely what the factual basis was upon which the court was proceeding and the special case records that fact at paragraph 25.

Of course, none of the respondents to this proceeding were parties to the Namah proceeding and so did not have any opportunity to have any input into that factual agreement process. So the consequence of that, we submit, was that any factual findings, such that they are in the Namah judgment, can have, at most, limited relevance to the basis upon which this Court should proceed.

In terms of the matters that are then decided, your Honours will have seen there are two judgments in this case, both of which were joined in by all of the members of the court. So the leading judgment is given by Justice Kandakasi and there is also a shorter judgment given by Justice Higgins and all of the members of the court agree with both.

In relation to what was actually decided, if your Honours turn to paragraph 5, you will see a summary there of the relief that was sought in the case. Three declaratory orders are identified:

That transferees brought to Papua New Guinea by the Australian Government and detained at the relocation centre on Manus Island is contrary to the constitutional rights of the transferees to personal liberty guaranteed by Section 42 of the Constitution.

That is the most relevant of the declarations. Then there is a declaration in relation to one of the exceptions to section 42 and a declaration sought that a constitutional amendment designed to add an extra exception was invalid.

So the critical issue in the case, and this is consistent with the summary at paragraph 7 and with Justice Higgins’ observation to the same effect at 78, was as to the effect of section 42 of the PNG Constitution which your Honours will see set out in paragraph 28 of the judgment on page 11. Section 42, as you can see, prior to the impugned amendment, headed “Liberty of the person”:

No person shall be deprived of his personal liberty except –

and there are then a list of exceptions where deprivations of liberty are permitted, including paragraph (g):

for the purpose of preventing the unlawful entry of a person into Papua New Guinea, or for the purpose of effecting the expulsion, extradition or other lawful removal of a person from Papua New Guinea –

Leaving aside for the moment the constitutional amendment question, the debate was had there been a deprivation of liberty, which was not seriously contested, and if so did it fall within that paragraph. Now, the essential steps in the reasoning that led to the court’s conclusion can be fairly shortly stated. They commence at paragraph 29 with the court saying:

the Constitution guaranteed a person’s liberty. In other words, no person within PNG’s territorial jurisdiction could be detained or held against his or her will, by anybody, not even the police or any other law enforcement agency, except only for the reasons or circumstances and in the manner set out –

The court then found at paragraph 33 that there needed to be an Act of Parliament giving effect to the relevant exception, so in order to fall within paragraph (g) you had to have an Act of Parliament that regulated the way in which that exception operated. At paragraph 34 the focus on paragraph (g) is identified. At 35 the court then turns to the legislative provision that does give effect to the exception which is section 13 of the PNG Migration Act and you can see it there set out. There is effectively a provision for the Minister to order the detention of:

a person against whom a removal order has been made –

Then at 36, there are provisions concerned with lawful entry or presence within PNG, and at 38 the important conclusion:

The power to detain and therefore deprive a person’s liberty pursuant to s. 42(1)(g) legally and constitutionally is only in accordance with that provision and the relevant provisions of the Migration Act.

So, in effect, you can detain someone, the court holds, when there is a removal order under section 12 and they have been ordered, therefore, to be detained under section 13 but not otherwise. That is the effect of what the court there held, and it says then because the people detained at the transfer centre were not detained in accordance with those provisions, their detention was unlawful pursuant to section 42.

The court then went on in the balance of its reasoning to deal with the amendment to introduce the new exception. You can see the terms of the new exception at paragraph 41 and it was plainly designed to deal specially with the operation of regional processing in PNG. So it would have, if valid, allowed for detention:

for the purposes of holding a foreign national under arrangements made by Papua New Guinea with another country . . . in his absolute discretion –

The court found that that amendment was invalid essentially because – and I will not take your Honours through it – there are manner and form provisions in the PNG Constitution and there is also a substantive requirement familiar in Bill of Rights countries that requires the amendment to be reasonably justifiable in a democratic society and the court found that the government had not discharged the burden of showing that it was reasonably necessary and it also had not followed some of but not all of the manner and form requirements, so the amendment was held invalid on that footing.

None of that says anything of any real relevance to the matters that are said to have been found by Namah to be invalid, upon which the plaintiffs rely, and there are four particular points that it is put against us are said to have been decided that, in our submission, were not.

First, one sees nowhere in the analysis even any mention of the designation of PNG as a regional processing country or of the “taking” direction that is challenged. They are just not mentioned anywhere within the case. The taking to PNG is mentioned really as a factual predicate for the detention that was then held to be invalid but, in our submission, it is clear that the case does not even purport to decide that those impugned designations and taking directions were invalid.

It is, in our submission, also reasonably clear that, even insofar as the court is talking about “taking”, it would have been no basis to say that taking people to PNG was unlawful but for the detention that followed because section 42, which is at the heart of the case, is a provision about the deprivation of liberty. So if PNG had chosen not to detain people brought to PNG under regional processing arrangements there could have been no issue.

The second point that was not decided, in our submission, was the validity of the MOUs and this really goes to our friend’s opening submissions about the word “arrangement” and the proposition that the court declared those “arrangements” to be invalid.

If your Honours turn to paragraph 74 of the judgment on page 27, you see the declaration and the orders that were made by the court and notably absent is any declaration or order directed to the MOUs. Again, the court said nothing about them. Nor does its reasoning suggest that, as a matter of power to enter into the MOUs, there was any difficulty. The difficulty was with the detention. That was what the court found to be unlawful.

But the question of power to enter into the MOU is quite a different question to the question of whether the conduct that subsequently follows is or is not consistent with the Constitution. One finds in both Justice Kandakasi and Justice Higgins’ judgments references to the MOU without any accompanying suggestion that they are invalid. So, for example, in paragraph 58, you see Justice Kandakasi say:

the Minister exempted the asylum seekers from ss.3 and 7 of the Migration Act and had them transferred to PNG by Australia pursuant to the 1st and 2nd MOUs with PNG. Hence, for all practical purpose and more so for the purposes of the Migration Act, the asylum seekers are lawfully in PNG –

Interestingly, the exemption instrument, which I will not take your Honours to but it is at pages 823 and 825 in the book – exempts people who are transferred under the MOUs. So the arrangement for the exemption refers to people who have been transferred under that arrangement and says you can enter lawfully. The court accepted that they entered lawfully but held that the detention that followed was impermissible. One sees – again, I will not take your Honours to it –at 101 and 108 the same kinds of references in Justice Higgins’ judgment.

It is not, we submit, at all surprising that the court would not have cast doubt on the validity of the MOUs when your Honours look at the MOU. Can I ask you to go to the 2013 MOU, which is in volume 1 special case book at 89. It is only this MOU that our friends challenge. This MOU replaced the 2012 MOU and there is no attack on that document.

There are two points that we note in relation to this document. The first is on page 89, the final bullet point on the page, where you will see that this MOU expressly contemplates that persons transferred to PNG pursuant to it might be hosted at the processing centre but might also be hosted under what are called “community-based arrangements”, to provide them with settlement opportunities.

So in its terms, not only did the MOU not expressly call for detention – and there is nothing in this document that says that people must be detained – it, on its face, contemplated that some people might be based in what are called community-based arrangements, which obviously would not give rise to a section 42 issue. The second point is the point your Honour the Chief Justice raised over on page 91 in clause 5. The agreement expressly recalls that:

The government of Papua New Guinea will conduct all activities in respect of this MOU in accordance with its Constitution and all relevant domestic laws.

So in our submission, there is nothing to suggest that entry into this arrangement was an arrangement by the government of Australia and PNG to engage in unlawful activity. On the contrary, the agreement was to engage in lawful activity and that the PNG Supreme Court, having held that detention was unlawful, it follows that, in implementing its commitments under this MOU, the PNG Government cannot continue to do something that would be unlawful under its own constitutional arrangements. So the detention or otherwise, in our submission, cannot go to the power to enter into an agreement because the agreement is not an agreement to do anything unlawful. Indeed, it is an agreement to comply with the law.

The third point that was not decided – and this, in our submission - by Namah is that Australia detained anyone at the RPC. This is directly contrary to our friends’ submissions including at paragraph 30 of their written outline. To make this good, your Honours, can I ask you to go back to paragraph 74, which is the relief, and to focus on the first of the orders made by the court:

The asylum seekers or transferees brought to Papua New Guinea by the Australian Government and detained at the relocation centre on Manus Island by the Respondents - - -

the respondents being the PNG Minister and PNG itself. In our submission, that order records a quite precise and distinct allocation of responsibility for taking to PNG by Australia and for detaining by the respondents. That delineation, in our submission, is completely consistent with the analysis that one finds in the body of judgment, particularly in relation to section 15C of the PNG Migration Act.

So, if your Honours go back to paragraph 59 in the judgment, you will see there set out a direction that the PNG Minister for Foreign Affairs and Immigration had given under the PNG Immigration Act which required people to reside at the relocation centres. So this was the purported source of legal authority in PNG to require people to be at the relocation centre. The Minister gave a direction. The effect of that direction, if your Honours go over to paragraph 60 you will see there section 15C quoted and if you look at subsection (2):

A direction under Subsection (1) is sufficient authority for a police officer to detain and take into custody the refugee or class of refugees or non-citizen claiming to be a refugee –

So there was direction by the Minister and then power in the police force of PNG to require people to stay at the processing centre. The court finds that that direction was invalid. But the fact that the court focused on it is, we submit, consistent with the recognition in paragraph 74 that it was treating the detention that was occurring as detention purportedly authorised by PNG officials under PNG statutory instruments. Against that context, when one then goes to paragraph 39 which is really the high point of our friends’ case, we submit that the proper way to read the fourth sentence on the last two lines of page 15:

This is confirmed by the very fact of their forceful transfer and continued detention on MIPC by the PNG and the Australian governments -

that one there sees again the focus on transfer and detention by two persons. That paragraph is not properly read as saying both PNG and Australia transferred and both PNG and Australia detained because PNG obviously did not transfer. It should be read distributively, in our submission, consistently with the express and careful way that it is framed in paragraph 74. So, one cannot start from the premise that the Supreme Court of PNG has found that Australia unlawfully did anything in PNG.

BELL J: I thought the way the argument was put this morning by Mr Molomby was that – I think it is the administrative arrangements contemplated the Minister’s direction so that the issue was not so much what was Australia’s role but what was understood by the arrangements.

MR DONAGHUE: Yes.

BELL J: I think that is the way the argument was put.

MR DONAGHUE: Well, that is in some respect akin to the shift that happened in M68 from the initial assertion of Commonwealth detention to an assertion of Commonwealth involvement in some way in the detention, and the position is, in our submission, much the same as it was there, in that one cannot deny that there is some Australian involvement in the detention that is occurring in PNG but the question is where that goes in terms of its legal consequences and, in our submission, we are focusing, as the special case questions do, on whether by reason of Namah anything done by the Australian Government is unlawful. We submit where it goes is not very far because the Supreme Court of PNG did not have occasion to find and did not find that the Australian Government had breached the PNG Constitution.

Now, against that background, I can deal very briefly with the specific impugned decisions that form part of my responsibilities before handing over to Mr Kennett. First the designation decision - as the plaintiff put it orally this morning, the focus of the argument appeared to be exclusively on the proposition that as a matter of constitutional power the Constitution cannot authorise unlawful conduct. That encounters the problems that I have already addressed.

If the argument goes further than the oral argument and picks up some of what our friends have said in writing, then there are additional obstacles to it which I will deal with just very briefly. Perhaps the main obstacle is that as a matter of statutory construction Parliament could not have been clearer that the domestic law of PNG, or of any regional processing country, is not relevant to the power to designate that country as a regional processing country. Your Honours see that in section 198AA, which is the first of the provisions in the regional processing subdivision of the Act. Section 198AA says:

This Subdivision is enacted because the Parliament considers that:

. . .

(d) the designation of a country to be a regional processing country need not be determined by reference to the international obligations or domestic law of that country.

The background to the insertion of that express statement of purpose, as many of your Honours will recall, was the Malaysia Declaration decision of this Court, which we have handed copies of to your Honours this morning. In that case, the Court expressly held that under the previous provision, repealed and replaced by the new subdivision, the domestic law of the designated country was critical to the existence of the Minister’s power to designate.

So, in the judgments of Chief Justice French and your Honour the Chief Justice, the domestic law was said to be critical. In the plurality judgment, it was said that the domestic law or international obligations of the country were critical. I will not take your Honours through the passages but in Chief Justice French’s judgment it is at 65 to 66; in the plurality it is 124 to 126 and in your Honour the Chief Justice’s judgment it is at 244.

So that this Court, having held under the old regime that the domestic law of the processing country was critical, Parliament repealed the provision, enacted a new provision and expressly said that the domestic law of the country is not critical. The case that the plaintiff is now running is a case that says that the validity of the designation turns upon the operation of the constitutional law of PNG.

It is directly inconsistent with the legislative history that led to where we are now which contains the provisions that your Honours are familiar with in 198AB(2) and (3) casting the relevant designation power in the widest terms and I will not take your Honours through it. Our friends do not seem to pitch a case based on statutory construction but your Honours held in S156 that this very designation is valid and there is no reason to depart from that decision.

Likewise, your Honours, there is nothing put by way of independent attack on either the taking direction under 198AD(5) or, for that matter, on the specific taking under 198AD. The taking direction was likewise upheld in S156 and the taking decision operates as a matter of domestic law as a duty imposed on an officer, if the designation is valid.

So, your Honours, in our submissions, there is nothing in Namah to point against the conclusion that the court reached in Plaintiff S156 that the designation is valid, the taking direction is valid, and the taking under 198AD in relevantly the same circumstances is valid. If the Court pleases, if I could ask Mr Kennett to address the remaining matters.

KIEFEL CJ: Yes, Mr Kennett.

MR KENNETT: If the Court pleases, point 6 in our oral outline deals with parts a) and b) of question 2 in the special case, which relate to two agreements: the Regional Assistance Agreement and the second of the MOUs. Equivalent agreements in M68 were treated without any great difficulty as having been entered into in the exercise of the Commonwealth’s non-statutory executive power. We have given your Honours the references to the relevant passages in paragraph 39 of our written submissions, at footnote 22.

An issue that arises here is whether the consequences of the Namah decision, as properly understood, take the agreements in the present case outside that power and we submit that they do not, essentially for two reasons. The first point is that if the detention of transferees in Papua New Guinea was or was destined to be unlawful in that country – unconstitutional, as the court held – it does not follow, as paragraph 34 of our friends’ written submissions seems to suggest, that the agreements had such unlawful conduct as part of their purpose.

Indeed, it is an agreed fact in paragraph 43 of the special case that detention of transferees was not something sought to be brought about by the Commonwealth parties. Neither of the agreements at issue here involved any promise or any stipulation that transferees would be detained in Papua New Guinea.

KIEFEL CJ: That is a similar fact to that stated in the special case in M68.

MR KENNETT: Yes, it is, your Honour. The first of the agreements in point of time is the regional resettlement agreement, which begins at page 85 in volume 1 of the special case book. I will just go to that for a moment. The agreement, as your Honours will see at the top of the page, was said to outline:

further practical measures Australia and Papua New Guinea will pursue together to combat people smuggling. It builds on the mutually agreed principles –

I wanted to draw your attention to in particular clause 3, which provided that:

Commencing on the day of the announcement, any unauthorized maritime arrival entering Australian waters will be liable for transfer . . . Papua New Guinea undertakes for an initial twelve month period to accept unauthorised maritime arrivals for processing and, if successful in their application for refugee status, resettlement.

Then clause 4 said that:

unauthorised maritime arrivals would be transferred to Papua New Guinea following . . . health, security and identity check in Australia. Transferees would be accommodated in regional processing centres. Papua New Guinea will undertake refugee status determination. The regional processing centre will be managed and administered by Papua New Guinea under Papua New Guinea law, with support from Australia.

Paragraph 5 noted that:

What is unique about this Arrangement is that persons found to be refugees will be resettled in Papua New Guinea –

So there is no, in those core provisions of this agreement – neither there nor elsewhere in fact is there any requirement that people be subjected to detention or a promise to do that by Papua New Guinea. The next document is the 2013 memorandum of understanding. It starts at page 89. The Solicitor-General has just taken your Honours to the important points in this, but could I add a reference to clauses 11 and 12 on page 92, where it was provided that:

Papua New Guinea will host a Processing Centre –

and then in clause 12 that it might:

also host Transferees under other arrangements, such as community-based arrangements –

So there was express advertence in the operative provisions as well as in the preamble to the capacity for Papua New Guinea to host people under arrangements other than detention. You will also see on the same page, paragraph 9, provided for administrative measures to be worked out between the participants and that is what occurs in the administrative arrangements which I will come to later in my submissions.

The consequence in particular of clause 5 on page 91, to which your Honours have been taken, was that if detention of transferees was unlawful as it turned out to be – declared so by the Supreme Court of PNG – then the effect of clause 5 was to require that people not be detained, which is the contrary of the vice that our friends seek to attribute to these agreements.

So we say that the unlawful purpose attributed to the international agreements in paragraph 34 of our friends’ submissions, just is not there on the face of them. So one does not reach any deeper or more complex point here about the justiciability of these matters or any point about whether there are limits to the Executive’s power to conduct foreign relations based on the purposes of particular agreements that might be entered into. We have not traversed that in our written submissions. We say the Court will not reach it in light of the content of the agreements that are impugned.

The second point that we make about these agreements is in answer to our friends’ argument that the agreements were beyond power or void in some sense because the PNG Government lacked power to make them. This is the narrower basis for the argument that our learned friend outlined this morning.

Our response is in paragraph 43 of our written submissions and the gist of it is that even if it be right that Papua New Guinea had no power to enter into these arrangements with Australia – a proposition which, as your Honours will understand from the submissions of the Solicitor-General, we do not accept. But, even if it be right, then the analogy with a contract that our friends seek to draw just does not work, we say.

That type of analogy could only be relevant to the effectiveness of the agreements in the international law plane where they do not purport to be binding treaties in any event. It cannot be relevant to the power of the Commonwealth Executive under Australian law to enter into those arrangements. The word “void” does a deal of work in our friends’ argument without, in our submission, really being explained. Usually “void” would describe something having a lack of legal effect.

But, as I have said, that kind of argument might work if one were approaching this in an international tribunal, but voidness as a matter of Australian law does not attach to the Commonwealth’s Executive Act in signing these agreement by virtue of anything happening in Papua New Guinea including PNG’s asserted lack of authority to enter into them.

We know from subsection (5) of section 198AHA an agreement for the purpose of triggering that section need not be legally binding. So if the agreement is void in some sense, in the sense of not being legally binding, that does not get our friends to where they need to go for the purpose of seeking to take the case outside section 198AHA(5), and voidness certainly does not mean that this never happened as a matter of fact. Clearly the agreements were entered into and clearly, as we submit, they were entered into by Australian ministers acting within Australian executive power.

That is what I wanted to say about proposition 6 in the outline. Proposition 7 deals with the effect of section 198AHA and consequently with a number of aspects of the questions in the special case. Parts c) and d) of question 2 are within this area – that is, the 2014 Administrative Arrangements and the Broadspectrum contract. Questions 5 and 6 are also within this part of the submissions. In each of these instances, our argument relies on the application of section 198AHA which we say is enlivened by the MOU which I was addressing earlier.

The effect of section 198AHA in this circumstance, and the sense in which it authorises conduct, needs, we say, to be carefully understood. If your Honours go to subsection (3) of that section, you will see a provision at subsection (2) which is the one that does the primary work:

is intended to ensure that the Commonwealth has capacity and authority to take action, without otherwise affecting the lawfulness of that action.

This means in short that subsection (2) operates for the purpose of ensuring that certain actions are within Commonwealth executive power but does not purport, for example, to deny liability in tort for things that an officer might do in undertaking those actions, unlike the security legislation to which the Solicitor referred.

That is an example of a law that does purport to do that sort of work. Section 198AHA in its terms does not, and nor would the section in itself be a defence, for example, to a claim of habeas corpus if someone were being detained in another country contrary to the law of that country. It operates for a very specific and limited purpose.

Further, subsection (3), in its reference to the “lawfulness” of action, expressly contemplates that subsection (2) may have the effect that I have outlined in relation to conduct whether or not it breaches an applicable rule of law in the place where it happens. Can I take you in connection with that to a couple of passages in the judgment in M68? Firstly, at paragraph 181 on page 110 of the report, in the judgment of your Honour Justice Gageler, it is noted that subsection (3):

is important in clarifying that s 198AHA(2) is directed to nothing other than ensuring that the Commonwealth has capacity and authority to take action and that it does not otherwise affect the lawfulness of that action.

Your Honour goes on to explain that in the next couple of sentences, and then at the end of the paragraph it is said that:

The section has no effect on the civil or criminal liability of the Executive Government . . . The lawfulness or unlawfulness of Executive Government action under Australian law or under the law of a foreign country conversely does not determine whether or not that action falls within the scope of the statutory capacity or authority conferred by the section.

That is, by section 198AHA, and that we would respectfully embrace. We also note what Justice Keane said at paragraph 249 on page 126 of the report. This was in your Honour’s discussion of whether the asserted lack of constitutionality under the law of Nauru was relevant and in the last part of paragraph 249, your Honour said:

Further, s 198AHA(3) is an indication that s 198AHA(2) is, in its operation, indifferent as to whether or not a restraint over the liberty of a person in the processing country is, for any reason, unlawful in that country.

This is part of a longer passage in your Honour’s judgment, all of which we say is relevant to this point, beginning at paragraph 248, with the conclusion, which is then explained in the later paragraphs, that:

the authority conferred on the Commonwealth by s 198AHA(2) is not conditional upon a judgment by the domestic courts of this country as to the validity of the laws of Nauru.

Of course, the issue that was potentially alive in that case was whether this Court ought to go into an issue about constitutionality in Nauru. So that was what your Honour was addressing and hence the references to the domestic courts of this country.

In paragraph 249, prior to the passage that I read earlier, your Honour noted that the definition of “regional processing functions” in subsection (5) included the “implementation of any law”. That was important in the context of M68 but also referred to the “implementation of any policy”, which was another factor suggesting that the particular state of the law in a regional processing country was not a relevant factor to whether 198AHA applied to authorise in the narrow sense that I indicated, conduct by the Executive government of the Commonwealth. Your Honour then referred in paragraph 250 to:

considerations of international comity –

and then referred to some of the well-known cases on that. I also want to note paragraph 253, on page 128 of the report, where your Honour said that:

s 198AHA(5) could be read as if it referred simply to “a valid law of another country”.

That is taking out the difficult question whether an Australian domestic court ought involve itself in these questions. But then your Honour said:

But, in truth, the second exegetical reading implicitly involves the proposition which is explicit in the first. That is because any question as to the validity of a law of another country for the purposes of the municipal law of the Commonwealth can be resolved only by a decision of an Australian court: under our system of the separation of powers at the federal level, “[i]t is emphatically the province and duty of the judicial department to say what the law is”.

A familiar principle, so that what we take from that is that to say here that lawfulness under 198AHA depends on lawfulness in PNG, as declared by the Supreme Court in Namah, ends up with the same problem as the submission sought to be made in M68 that lawfulness under 198AHA ought depend on constitutionality in Nauru as determined by this Court.

The relevant part of your Honour’s reasons goes through to the end of paragraph 258, but I will not take your Honours through all of that. Can I also give your Honours a reference to what the plurality judges said on this question at paragraph 52, with which Justice Bell agreed at paragraph 102. That understanding of the effect of subsection (3) and of the consequences of it as seen Plaintiff M68 is sufficient, we say, to answer the suggestion that the authority or capacity conferred by the section is limited by the declarations of right made in the Namah decision. Nor, we say, is there any substance in the argument suggested by our friends in writing – although not developed this morning – that the section on that construction is invalid. We have given relevant references to this in paragraphs 51 and 52 of the written submissions. I do not propose to add anything to that.

Thus, we say the conduct referred to in question 5 in the special case is not rendered beyond power or taken outside the scope of authority conferred by 198AHA by anything in – or anything following from – the Namah decision. The same is also true of the 2014 administrative
arrangements and the Broadspectrum contract which are referred to in question 2, parts (c) and (d). The administrative arrangements were part of giving effect to the MOU, even if an aspect of the arrangements could not be carried out consistently with local law, as does seem to be the case because the administrative arrangements do contain a provision for the PNG Minister to make a direction that people have to reside in the processing centre.

Even if that cannot be carried out consistently with the local law, that did not take Australia’s entry into the arrangements outside power for the reasons of statutory construction that we have identified. As to the contract, apart from the general propositions I have just been making, we note in paragraph 54 of the written submissions that the contract itself cannot be said to have a purpose of bringing about breaches of the law of PNG because the contract expressly required the service provider to comply with local laws.

Noting also that question 2 asks about the non-statutory executive power, we make the point in paragraph 55 of the submissions that, to the extent that the Broadspectrum contract would otherwise be within that power, it is not taken out of it by the Namah decision; that it all that needs to be said about that in order to answer the question, although there may be an underlying question more generally about the scope of the non-statutory executive power.

GAGELER J: Insofar as section 198AHA covers, say, the Broadspectrum contract, do we need to concern ourselves with non-statutory executive power?

MR KENNETT: We would say you do not, although it crept into the question.

GAGELER J: There is this awful drafting, “and/or”. You could read it distributively.

MR KENNETT: If our propositions on the section are accepted then we do not need to rely on the non-statutory executive power, and that is probably enough to justify your Honour’s declining to answer that aspect of the question. If our statutory submissions were not accepted, we would wish to maintain at some point, although it is not part of the issues here, that the non-statutory executive power authorised the end to the contract. The same can be said about the administrative arrangements.

Lastly, can I come to question 6 in the special case which refers to circumstances following the service of certain documents on the plaintiff earlier this year and asks whether the Commonwealth can lawfully assist Papua New Guinea in carrying those documents into effect. The points I have already made about section 198AHA apply, we say, to the conduct contemplated by question 6.

We say it is within the scope of subsection (2) because of the breadth of the definition of “regional processing functions” in subsection (5). That definition, we say, must be understood to include not only the process of accommodating somebody and assessing their claim as to international protection but also the consequences of a positive or negative decision.

Such efforts as PNG may take to remove the plaintiff from that country and efforts to detain him pending that occurring we say are within the concept of regional processing functions and thus the submissions that were made earlier about the scope of subsection (2) apply to those steps. Additionally, though, one does not really reach that argument because there is nothing in the Namah decision to suggest that it is unlawful for PNG authorities to detain the plaintiff now and remove him from the country with him having been determined not to be a refugee.

The reasoning in the case just does not deal with that circumstance. As your Honours may well have noted in looking at paragraph 39 of the decision on page 849 in volume 2, starting at about line 16 on page 849, this is in the judgment of Justice Kandakasi, his Honour said that the circumstances that he had outline meant that:

no situation has arisen for the purposes of s. 13 of the Act or s. 42(1)(g) of the Constitution to warrant, the asylum seekers’ detention.

The point I am now making is that exactly those circumstances arise now in the light of what has occurred recently in relation to the plaintiff. The removal order which is at page 870 of the special case book, if valid – and there is no reason to suppose it is not – makes the plaintiff subject to detention under section 13 of the Migration Act. There is a direction at page 871 directing him to be detained under that section of the Act, section 13 is at page 580 in volume 2. Subsection (1) expressly provides for:

The Minister or an authorised officer may order that a person against whom a removal order has been made be detained until arrangements can be made for his removal from the country.

So that is a form of detention, apparently at least, expressly authorised by the statute in the present circumstances and clearly within the contemplation of section 42(1)(g) of the PNG Constitution.

GAGELER J: We cannot decide that.

MR KENNETT: Of course not, your Honour. No, that is not a matter for this Court to decide but what I am seeking to suggest is that there is nothing

in Namah to indicate any reason to think that detention of the plaintiff in the present circumstances is unauthorised and hence, no question arises as to whether such unlawfulness has an effect on the capacity of Australia to participate in it. I did not seek to go further and suggest that your Honours ought to make some orders about - - -

NETTLE J: But the question would still arise whether detention for deportation is within processing, would it not?

MR KENNETT: Regional processing?

NETTLE J: Yes.

MR KENNETT: There is a question, your Honour, and I have made the submission that it is, yes.

NETTLE J: That does not go away.

MR KENNETT: Your Honour is right, it does not go away, yes. Those are the submissions, if the Court pleases.

KIEFEL CJ: Thank you. Yes, Mr Lloyd.

MR LLOYD: I think we have an oral outline which is being delivered but I can indicate that I propose to largely abandon the oral outline to have or at least only speak to very select aspects of it. We would rely upon our written submissions. We would embrace the submissions of the Commonwealth save for one thing, which I am sure was a slip. The learned Solicitor-General at one point spoke about the tension in the current tense or the present tense. We do not accept - there are no agreed facts about that and I am sure it was not meant to be suggested that there is any current detention occurring.

KIEFEL CJ: In relation to your written submissions, Mr Lloyd, at paragraphs 29 and 30, is it appropriate for your client to raise questions relating to Act of State doctrine when the Commonwealth has not raised it? Do you seek to rely upon that?

MR LLOYD: We do seek to rely upon it because we say it is an answer to the question – the main point or the first point put by my friend this morning was this implication drawn from the Constitution that exercises of power, including executive power, can be read so as to look at the purpose behind the entering into it, we say that the act of state doctrine, at least insofar as that is put to justify the invalidity of the MOUs under which my client’s contract is - or in support of which my client’s contracts have been made - - -

KIEFEL CJ: I understand its potential relevance but if the Commonwealth is not invoking it what do you do with it?

MR LLOYD: We rely upon it principally as an answer to the idea that the Court should draw a constitutional implication that would allow for the review of executive action by reference to this notion of legality. In relation to acts such as the entering into treaties, which would extend to MOUs, the principles which have led to the Crown Act of State doctrine, which is to say that a court should not enter upon that area because there are not judicially manageable standards in determining, for example, what are the lawful reasons for entering into a treaty or the like, that those reasons are reasons why the Court should reject the proposition put forward as being a constitutional application.

We do not put it higher than that but we say that the reasons for that doctrine are very reasons why the Court would not infer such an ability to enter upon the idea of whether the MOUs are invalid because the Minister had an illegal purpose or however it is put.

So, we only rely upon it for that purpose. We are not saying that the court has to determine that it cannot address the issue. We would accept that the court can address the question whether there is such a constitutional implication and the fact that there is the Act of State doctrine in this context goes back well into the 19th century as a reason why one would not construe the Constitution in the way which is being suggested. That is really all we wanted to say about that.

We have given references to the recent UK Supreme Court decision in Rahmatullah but I do not need to go to those. They are in our outline of oral submissions in any event. Apart from that there was a question asked this morning about whether there are any authorities in relation to the question of constitutional implications that the legislative power should be constrained by reference to this principle of legality.

We would refer the Court to three cases. The first is Polyukhovich [1991] HCA 32; 172 CLR 501 there was discussion in the middle of page 599 and it extends also in the paragraph at the bottom of 602 over to 603. The notion which Justice Deane was discussing on this point was that there should not be a lacuna in relation to Australia’s legislative power. As between the States and the Commonwealth, at least between the two sets of bodies politic, the legislative power should be completely comprehensive and we say that that again suggests that there is not this area where the legislative power can be shrunk by reference to the foreign law.

So, Australia’s executive legislative power should not be seen as constrained by what other countries do in relation to their domestic law. So, I accept that it is only by way of broad analogy, but we rely upon that and I say that Justice Dawson says something similar on page 638 of that decision.

The next case I would refer to is a case called Meyer Heine Pty Ltd v China Navigation Co Ltd [1966] HCA 11; (1996) 115 CLR 10. It dealt with whether a particular act had an extraterritorial operation and the majority of the Court found that it did not. Justice Menzies dissented on that question and so then his Honour had to consider the significance of that and on page 42, in the paragraph towards the bottom of the page beginning “The plaintiff’s demurrer does not”, at the end of that his Honour says:

It seems to me that if the Act does operate with respect to contracts made by the defendants in Hong Kong and Japan – as I think it does – it matters not with whom the contracts were made nor whether or not they were in breach of the law of the place where they were made -

which is to say Australia can make a law which is inconsistent with a foreign law. What is being done in Hong Kong or Japan may be lawful in Hong Kong or Japan but Australia can still have a law which is inconsistent and it matters not whether or not there is inconsistency.

Then, I will give a citation – it is not on the list of authorities but just for assistance to the Court, in Kirmani v Captain Cook Cruises Pty Ltd (No 1) [1985] HCA 8; (1985) 159 CLR 351. Justice Deane, on page 442, in about the middle of the page also says something similar in nature to Justice Menzies about the irrelevance of what foreign countries do in relation to the extent of our administrative power.

Apart from those matters, my friend Mr Molomby this morning raised the ante somewhat from his written submissions. We apprehended in the written submissions it was suggested that the MOUs – “envisage” was the word they use in paragraph 35 of their submissions – envisage detention or serve the purpose of detention. But it was put this morning that they require detention. We say it is just not possible to read them as requiring detention and so to that extent the Court should not accept that submission.

It was also put that they authorised use of force to make people stay. My friend did not elaborate on that. The MOUs themselves do not refer to that but there is reference to use of force, which may be what they had in mind. In the second volume at page 447, clause 4.16 of my client’s contract, it allows for “reasonable” force to be used in six instances, none of which are about making people stay. So to that extent it is not, we say, correct.

In relation to our contract, which we accept does not come within the Act of State principle - albeit that it is done in support of the MOUs, which do – we would submit that there is no case law that indicates that entry into a contract under Australian law between two Australian entities is affected by the content of foreign law. If the law of another country made unlawful conduct to be undertaken in that country under such a contract that may have consequences for the degree or circumstances in which the contract is enforceable but it does not make entry into the contract unlawful nor the contract void.

There is no authority to suggest that it is relevant to entry and they have posited none. In their written submissions, the Commonwealth refer to a number of cases which are all cases which go to the extent to which such contracts are enforceable. In any event, we say that the plaintiff’s argument is errant material because the contracts themselves do not require conduct that is unlawful and in fact the reverse is true. In the first volume, on page 149, clause 1.1.5, this is the first contract with my client:

The parameters within which Offshore Processing will operate include Australian and Host country legislation, Ministerial directions, Joint Agency Task Force –

et cetera. So we are meant to operate within, inter alia, host country legislation. This is made, if anything, clearer on pages 124 to 125, in clause 3.3.1:

The Service Provider must, in performing its obligations in this Contract, comply, and ensure compliance by all its Personnel, with:

1. all applicable laws, including those applicable in the Regional Processing Country where the Site is located –
   

So, even if there was an implication of the kind asserted, the contract with my client is not one which could be said to be done for the purpose of breaching a law, certainly not knowingly, and there is no suggestion that, after the decision in Namah, my clients have taken any action which is unlawful. So if the point is that the Commonwealth lacks executive or legislative power to do things for the purpose of unlawfulness, they just have failed to establish that any of these matters, the MOUs or the contracts, were done for that purpose.

GAGELER J: So, Mr Lloyd, if we go to question 2, as I understand your submissions, you would say the answer is that the entry into the

memorandum of understanding was within the power of the Commonwealth conferred by section 61 of the Constitution and that the entry into of the other instruments or arrangements referred to in b), c) and d) was within the power conferred by section198AHA? Is that - - -

MR LLOYD: I think we would have said a), b) and c) fall within section 61 and d) falls within section 198AHA(2).

GAGELER J: Yes.

MR LLOYD: Because the regional resettlement arrangement is an agreement between the then Prime Minister, or Prime Ministers, and the 2014 Administrative Arrangements is also an intergovernmental agreement. May it please the Court, they are our submissions.

KIEFEL CJ: Thank you, Mr Lloyd. Is there anything in reply, Mr Molomby?

MR MOLOMBY: Just a couple of matters, your Honour. Your Honours, insofar as reliance is placed on the agreed fact that Australia would not have sought detention if it had not been required by Papua New Guinea, in our submission that really is beside the point. The question is whoever was the source of it, Australia agreed to it and co-operated with it and knew that it was part of the scheme from early on when the requirements, in effect for it, were referred to quite explicitly.

Mr Lloyd said that I referred earlier this morning to detention being required by the MOU, “required” was the word he took issue with. I did not think I did that. I thought I was referring to the administrative arrangements which required the – which agreed that the appropriate Minister in Papua New Guinea would make that direction under the Act which then enabled the power of police to enforce it and subjected the person to the criminal penalty.

Certainly, I did not intend to say it was the MOU, it was the administrative arrangement which is, of course, part of the same scheme. Each of these documents refers to the others. It is recited at the start of the administrative arrangements that they are supported by the MOUs and the MOUs foreshadow the making of administrative arrangements and, indeed, when the second MOU came into effect, the first set of administrative arrangements was already in effect. So, it must be taken that the second MOU was made with keenly in mind that it was to serve the purposes already articulated in the first set of active administrative arrangements.

These documents were part of an integral scheme. They interrelated and it is artificial, in our submission, to divorce, say, the second MOU from the already existing and active set of administrative arrangements and what they provided. They were intended to operate together. They recite each other that way.

BELL J: Mr Molomby, if you do not succeed on your first broad point - - -

MR MOLOMBY: Yes, your Honour.

BELL J: - - - and one turns to your alternative narrower point, respecting the capacity to enter into an arrangement with PNG in light of the Namah decision, I do not know that I have picked up how you deal with section 198AHA(3).

MR MOLOMBY: That is the section that refers to unlawfulness, your Honour.

BELL J: Yes.

MR MOLOMBY: Yes, there was something in our written submissions about that, where we have actually put an argument which perhaps is not quite in accord with some of the things that have been referred to this morning, said in M68, but might I go to that.

Your Honour, the construction that is urged of this section – that is, that it confers authority without affecting tortious liability – is somewhat unusual and might appropriately be tested by seeing where it would go in other circumstances. The construction put on it by the Commonwealth, in our submission, is rather as though instead of lawfulness in subsection (3), it said liability. If it is lawfulness and taken to be an authority to commit unlawful acts, that applies within Australia as well as outside Australia, and the unlawful acts would be civil acts as well as criminal acts.

There is, we would suggest, no escape from that as the meaning of it if it is interpreted that way. That is, it is saying the Commonwealth has authority, however flagrantly, of course, confined to the purposes which it can be done, but however flagrantly, to engage in a tortious or a criminal act. That is a rather extreme authority to be giving, all hinged upon this section which, on a first reading at least, does not appear, in our submission, quite to convey that. Indeed, as I say, the construction being put on it would much more readily arise if that word “lawfulness” said criminal law, civil liability for, or conveyed that concept in some way.

BELL J: The next aspect, of course, is sub (5) which makes clear that the arrangement contemplated might not be legally binding.

MR MOLOMBY: Quite so, your Honour.

BELL J: Well, I understood your narrow point in part to be if PNG lacked capacity to enter the arrangement, it would follow there was not an arrangement as between the two countries because one party to it was without capacity or something along those lines.

MR MOLOMBY: That is exactly so, your Honour.

BELL J: Well, it is how you square that with sub (5) which contemplates that the arrangement might be one that is not legally binding.

MR MOLOMBY: In our submission, your Honour, what the Papua New Guinea Supreme Court was directing itself to included that. That is, it was saying that the arrangement that existed, not legally binding, that is the MOU, was unconstitutional and illegal. That is, it put it out of play. Might I just have a moment, your Honours, I just need to isolate one or two points I had noted rather more than that. If it please the Court, I have no further matters to raise.

KIEFEL CJ: Thank you. The Court reserves its decision in this matter and adjourns until 9.45 am tomorrow for pronouncement of orders and otherwise until 10.15.

AT 12.34 PM THE MATTER WAS ADJOURNED